Life insurance is available today in several different forms. The three most common are term life, whole life and universal life.

Term Life
Term life insurance provides coverage for a specified term of years. If you are the policyholder and you die during the term, the insurance company will typically pay the face amount of the policy to the person you named as the beneficiary. The term of the insurance can vary from one year up to 15 or more. The insurance premiums for term life generally increase with age. Term insurance is the most economical form of life insurance.

Whole Life
Whole life insurance generally provides for a death benefit in return for a fixed premium that remains constant for your whole life. In addition, a whole life insurance policy typically contains a savings type provision that allows you to surrender, or "cash in" the policy. The drawback, of course, is that whole life is much more expensive than term insurance.

Universal Life
Universal life insurance is the newest form of insurance. While similar to whole life, universal life typically provides more flexibility than whole life. Universal life provides you with an annual statement of the amount of the premium credited to your cash value account. Unlike whole life, the cash value money is available almost anytime. You can borrow or withdraw from your fund without jeopardizing coverage. Generally there is a guaranteed minimum interest rate at which you repay the money borrowed. Finally, the amount of the premium and death benefit can vary at the discretion of the policyholder.

Life insurance proceeds are payable to whomever you named as the beneficiary. If an individual is named as beneficiary, the insurance benefits would by-pass your estate and would be paid directly to the individual. Of course, if you designate your estate as the beneficiary, your will would dispose of the proceeds or the proceeds would be disposed of as provided by law if you die without a will.

If you are trying to collect on a life insurance policy, it is usually fairly simple. First, contact the insurance company or the insurance company's local agent to obtain a claim form. Fill out the form and return it to the company along with a death certificate and the original policy. Keep copies of everything for your records.

When the insurance company responds, be sure you understand the benefits to be paid. If you run into a problem in collecting insurance benefits, an attorney should be consulted.

This information was prepared to give you some general information on the law. It is not intended as legal advice about any particular problem. If you have questions about the law you should consult a lawyer. If you do not know a lawyer, you can call the South Carolina Bar Lawyer Referral Service weekdays between 9 a.m. and 5 p.m. The number is 803-799-7100.