One of the most important benefits that employers give their employees is the benefit of group insurance. For some, these group benefits are the only forms of insurance protection that an individual will ever have. But when possible, employees should enjoy these group benefits not as a sole source of protection from all the financial risks they face, but as a supplement their personal insurance policies.

If you aren’t sure why you should have both individual and group insurance coverage, consider these points on three different types of group insurance policies:

• Life insurance: Group life insurance benefits are very inexpensive and can be a great comfort to your family if they lose you while you are employed. But these plans are not portable—meaning you can’t take them with you when you leave. Having your own life insurance policy allows you the comfort of knowing you are insured whether you are employed or not. In addition, group life insurance benefits do not generally include accruing cash values which can be a source of tax-free loans in the future.
• Health insurance: Group health insurance coverage is especially helpful when you have a pre-existing condition that is hard to get covered with an individual health insurance policy. Group health costs can also be more affordable for those who have pre-existing conditions. However, group coverage can be less competitively priced for those who are young and healthy. It is also restrictive in options. You may not be able to see your existing doctors and have it covered in-network. And when you leave your employer, you can only carry the coverage for an additional 18 months in most instances.
• Disability: When you are employed and covered by a group disability insurance plan, you will have an affordable premium along with the protection of either short- or long-term disability benefits—and in some cases, both. This will be especially helpful if you suffer an injury that is not covered by workers compensation. But if you leave your job and go to another employer who doesn’t offer that benefit, you could be left without a disability benefit after a non work-related accident, illness or injury.

It is up to you to fully protect yourself and your family from financial risks. Insurance policies offer you an affordable, reliable means for doing so. And while employer-sponsored group policies do offer some attractive benefits, they may not be suitable as your only source of protection. Contact us to discuss your options for Group Health Insurance in South Carolina at (864) 269-6860.

If you have a whole life insurance policy then part of your annual premium payment is applied toward your policy’s accumulating cash values. Cash values create the surrender and loan value of your life insurance contract, which means that your policy has a value beyond its death benefit, and that value can be borrowed against. Before you decide to take a loan from your life insurance policy, there are some things that you should understand.

A loan is a loan: Cash value loans are just that—loans. They do need to be paid back. If you don’t pay back the loan before death, your death benefit can be reduced by the amount of the outstanding loan balance and interest. Depending on the amount you’ve borrowed, this could have a serious impact on your beneficiaries.

Interest charges: You will be charged interest on cash value loans, but that interest is paid back to you in your cash values.

Premium loans (APL): Your cash values can be applied to premiums due if you have this feature set up through your insurance company. It is called an applied (or automatic) premium loan (APL) and while it may prevent your policy from lapsing, it is still a loan and, if not paid back, can reduce your death benefit. Don’t take for granted that your insurance company has automatically set your policy up for this process, call your agent to make sure.

Surrender value: While this post is primarily about cash value loans, it is important to clarify surrender values since they represent a different portion of your cash value reserves. Your actual cash value may not be the amount of money that you are entitled to if you decide to surrender your policy. Your surrender value represents the policyholder equity, and the amount of money you would be paid by the insurance company if you decided to surrender your policy.

Taxes: Loans from cash values are not taxable. Because they are loans to be paid back, they are not considered gains. Cash received through a cash surrender may be all (or partially) taxable.

Cash value loans, while convenient and accessible, should not be taken lightly. The decision to borrow from your life insurance policy could have an impact on your heirs if you aren’t able to pay it back before death. Additionally, if you take enough, you may wipe out any remaining balance, leaving your policy without the option for an APL if you miss a premium, which puts you in danger of lapsing. Take some time to evaluate your need for the loan and the possible consequences of taking it before you move forward. Call us if you have any questions or concerns about South Carolina Life Insurance at (864) 269-6860.

When you apply for an auto insurance policy, before the insurance company can issue the policy they must try to foresee how much risk you will be worth if the policy is written. This helps them to manage the claims experience they have, determine whether or not to issue your policy and, if they do issue your policy, decide how much to charge you for it. The process during which they assess your risk is called underwriting.

While underwriting your auto insurance policy for coverage, underwriters will take into account various criteria including your previous driving record. They will obtain a motor vehicle report (MVR) to see how many tickets, accidents and other driving incidents you’ve had, what the tickets have been for, and decide how much influence those actions have on your current driving habits. Some of your past behavior—like speeding—will make you a riskier candidate to insure than others. This is because your past deeds and choices imply something about your personality and habits. Someone who has been cited with several speeding tickets in the past is more likely to have an accident and has also shown a propensity to ignore the legal speeding limit. This shows that the driver might be liable to disregard other driving laws and safe driving practices, therefore making him more likely to have an accident resulting in an insurance claim.

Other qualities underwriters consider include your age, gender and marital status. It may seem like these have no effect on whether you are a good driver, and in actuality, they don’t. No random fact about you determines whether you drive well, but based on many studies and anecdotal evidence, underwriters can create assumptions about probability of whether you drive safely and conscientiously based on these aspects. For example, a married man who is in his thirties will be considered less risky a driver than a single girl who is sixteen. Why? Well, a 30-year-old of any gender will generally have more driving experience than a 16-year-old, and a married person is usual viewed as being matured and more responsible because he has people who depend on him. And while none of these assumptions are guarantees about the integrity of the driver in question, the practice of underwriting relies on both gathering evidence of actual driving history and making suppositions based on this data.

It is through this careful balance of assumption, statistical data and historical driving information that underwriters decide whether or not to issue your policy and how much to charge you for it. The only data you really have any say over in this instance is your driving record, so be sure to keep your record clean and free of citations that are avoidable if you just follow the posted laws.  

Heritage Insurance Agency