Choosing the right life insurance policy is one of the most important financial decisions you will ever make for your family. Whether you are a young professional just starting out, a parent protecting your children's future, a homeowner with a mortgage, or a retiree thinking about legacy planning—understanding the difference between term life insurance and whole life insurance is essential.

At Mauldin Insurance Group, we help families and individuals across Lexington, Columbia, and the entire Midlands region of South Carolina navigate these decisions with confidence. We are an independent insurance agency, which means we are not tied to any single carrier. We shop multiple top-rated insurance companies on your behalf to find the right coverage at the right price.

This comprehensive guide will walk you through everything you need to know about term and whole life insurance—how they work, who each one is designed for, how costs compare, and how to decide which option is best for your specific situation. Let's get started.

 

What Is Life Insurance and Why Does It Matter?

Life insurance is a contract between you and an insurance company. You pay regular premiums (monthly or annual payments), and in exchange, the insurer agrees to pay a lump-sum death benefit to your chosen beneficiaries when you pass away. This money can be used by your loved ones to cover living expenses, pay off debts, fund college educations, or simply maintain their financial stability during a devastating time.

Life insurance is not about preparing for your own death—it is about protecting the people who depend on you. If something happened to you tomorrow, would your family be able to maintain their home? Pay off the car? Cover grocery bills and utilities? Life insurance fills that gap.

According to LIMRA's 2023 Insurance Barometer Study, 40% of American households say they would face financial hardship within six months if the primary wage earner died. Life insurance is one of the most direct ways to prevent that outcome.

The Two Primary Categories of Life Insurance

While there are many variations and riders available, virtually all life insurance falls into one of two categories:

• Term Life Insurance — Coverage for a defined period of time (typically 10, 15, 20, or 30 years)
• Permanent Life Insurance — Lifelong coverage that never expires as long as premiums are paid, with whole life being the most common form

Understanding how these two types differ—and more importantly, which one fits your life right now—is what we will cover in depth throughout this guide.

 

Term Life Insurance: Affordable Protection When You Need It Most

How Term Life Insurance Works

Term life insurance is the simplest and most straightforward form of life insurance. You choose a coverage amount (called the death benefit) and a term length—usually 10, 15, 20, or 30 years. If you die during that term, your beneficiaries receive the full death benefit, tax-free. If you outlive the term, the coverage simply ends.

That's really it. Term life has no investment component, no savings account, and no cash value. It is pure protection—and because of that simplicity, it is significantly more affordable than whole life insurance.

Who Is Term Life Insurance Designed For?

Term life insurance works exceptionally well for people in certain life stages and financial situations:

Young Families with Children

If you have young children at home, the years between now and the time they finish college represent your highest financial-risk window. A 20- or 30-year term policy can cover that entire period at a surprisingly affordable price. If the worst happened, your spouse would have the financial runway to raise the kids, pay the mortgage, and maintain their standard of living.

Homeowners with a Mortgage

A 30-year mortgage is one of the largest financial obligations most families take on. A matching 30-year term policy ensures that if you were to pass away, your family would be able to pay off the home—or at least continue making payments—without being forced to sell.

People with Significant Debt

Student loans, car loans, business loans, and other debts do not disappear when you die in most circumstances. Term life insurance ensures those burdens do not fall on your surviving family members.

Business Owners Protecting Key Employees or Partners

Small business owners in Lexington and the Columbia area often use term life insurance as part of buy-sell agreements or to protect against the loss of a key employee whose expertise and relationships are critical to the business.

Anyone on a Budget Who Needs Substantial Coverage

If you need $500,000 or $1,000,000 in coverage but have a tight monthly budget, term life insurance is almost always the most practical option. A healthy 35-year-old can often obtain a $500,000 20-year term policy for under $30 per month.

How Long Should Your Term Be?

Choosing the right term length depends on what financial obligations you are trying to protect against. Here are some common guidelines:

• 30-Year Term: Best for young parents, newlyweds, or new homeowners who want maximum coverage through child-rearing years and mortgage payoff
• 20-Year Term: Great for mid-career professionals with children in their early years and 15-20 years left on a mortgage
• 15-Year Term: Works well for people in their 40s or 50s who want to cover specific debts or income replacement for a defined period
• 10-Year Term: Useful for people nearing retirement who want bridge coverage or who have a specific short-term financial obligation to protect

Pro Tip from Mauldin Insurance Group: Many of our clients 'ladder' multiple term policies to optimize coverage. For example, a $500,000 30-year term plus a $250,000 10-year term gives you $750,000 in coverage during your highest-obligation years, with the smaller policy dropping off once kids finish school and debts are paid down. This approach can save thousands in premiums over time.

How Much Does Term Life Insurance Cost in South Carolina?

Term life insurance premiums are determined by several key factors: your age, your health, the amount of coverage you need, the length of the term, and the insurance company you choose.

Here are some approximate monthly premium ranges for healthy non-smokers in South Carolina as a general reference:

Age 30 | $500,000 | 20-Year Term: Approximately $20–$30/month

Age 40 | $500,000 | 20-Year Term: Approximately $40–$60/month

Age 50 | $500,000 | 20-Year Term: Approximately $110–$160/month

Age 60 | $250,000 | 10-Year Term: Approximately $120–$200/month

These are estimates—your actual rate will depend on your health history, lifestyle, tobacco use, family medical history, and the specific carrier. At Mauldin Insurance Group, we shop your application across multiple carriers to find the most competitive rate for your profile. Call us at 843-509-2462 or visit MauldinInsuranceGroup.com for a personalized quote.

Limitations and Considerations for Term Life Insurance

Term life is a powerful tool, but it does have limitations worth understanding:

• No cash value — Unlike whole life, term policies do not accumulate any savings or investment component. If you outlive your term, you get nothing back.
• Coverage can expire when you still need it — If you develop a serious health condition later in life and your term ends, obtaining new coverage may be difficult or very expensive.
• Premiums increase with age — If you need to renew or purchase a new policy later, premiums will be much higher than they were when you were young and healthy.
• Not designed for estate planning — Term insurance is not typically structured for wealth transfer or legacy planning the way permanent life insurance can be.

For many people, term life insurance is the perfect solution for their primary financial protection needs. For others—especially those with more complex financial pictures—whole life insurance may fill an important role alongside or instead of term coverage.

 

Whole Life Insurance: Permanent Protection with a Financial Foundation

How Whole Life Insurance Works

Whole life insurance is a type of permanent life insurance, meaning it does not expire. As long as you continue paying your premiums, your policy stays in force for the rest of your life—guaranteeing that your beneficiaries will receive the death benefit no matter when you pass away.

But whole life goes beyond simple death benefit protection. A portion of every premium you pay flows into a cash value account that grows over time at a guaranteed minimum interest rate. This cash value is a real financial asset that belongs to you. You can borrow against it, withdraw from it, or use it to pay future premiums. It is tax-deferred, meaning you do not pay taxes on the growth until you access it.

Who Is Whole Life Insurance Best Suited For?

Whole life insurance is not the right fit for everyone—but for certain people and situations, it is an outstanding tool:

People Who Want Guaranteed Lifelong Coverage

If your primary goal is to ensure your beneficiaries receive a death benefit no matter when you die—whether you live to 75 or 95—whole life delivers that certainty. There is no expiration date, no policy renewal, and no risk of being uninsurable later in life.

Seniors and Final Expense Planning

Many of our senior clients in the Lexington and Columbia area use whole life insurance specifically to cover final expenses—funeral costs, burial expenses, and any remaining medical bills. Final expense whole life policies are typically smaller in coverage ($10,000–$25,000) but are designed to be affordable and easy to qualify for even with health conditions.

High-Net-Worth Individuals and Estate Planning

For individuals with larger estates, whole life insurance can play a strategic role in minimizing estate taxes and transferring wealth efficiently to heirs. The death benefit passes to beneficiaries income-tax-free, making it a powerful legacy planning tool.

Business Owners Using Life Insurance as a Business Tool

Whole life insurance is commonly used in business contexts for key person insurance, funding buy-sell agreements, and even as a supplemental retirement savings vehicle for business owners who have already maxed out traditional retirement accounts.

Parents of Special Needs Children

When a child has a disability that will require lifetime care and support, parents need the guarantee that life insurance coverage will still be in place decades from now. Whole life provides that guarantee that term insurance cannot.

The Cash Value Component Explained

The cash value is one of the most unique and misunderstood features of whole life insurance. Here is how it works in practical terms:

• As you pay premiums each year, a portion is allocated to your policy's cash value account
• The cash value grows at a guaranteed minimum rate set by the insurer (often 2–4%)—it will never decrease due to market performance
• Some whole life policies issued by mutual insurance companies also pay dividends, which can increase cash value growth beyond the guaranteed rate
• The cash value grows tax-deferred—you do not owe taxes on the gains as long as they remain inside the policy
• You can borrow against your cash value at low interest rates without credit checks or approval processes
• Policy loans do not trigger income tax—borrowed funds are tax-free as long as the policy remains in force

Over 20–30 years, the cash value of a well-structured whole life policy can become a meaningful asset—one that many financial planners incorporate into strategies for retirement income, college funding, or emergency reserves.

Important Note: Withdrawals and loans from your whole life policy that exceed the basis of the policy (what you paid in) can have tax consequences. Always consult with a financial advisor or tax professional before accessing your policy's cash value in large amounts.

Common Riders and Customization Options

Whole life policies can be customized with riders—optional provisions that expand or modify your coverage. Common riders include:

• Accelerated Death Benefit Rider: Allows you to access a portion of your death benefit while still living if you are diagnosed with a terminal illness. This helps cover medical costs and end-of-life expenses without depleting your savings.
• Waiver of Premium Rider: If you become totally disabled and cannot work, this rider keeps your policy active without requiring premium payments—ensuring your coverage and cash value continue to grow.
• Guaranteed Insurability Rider: Allows you to purchase additional coverage at certain intervals without new medical underwriting—ideal if you anticipate your coverage needs increasing over time.
• Child Term Rider: Adds term coverage for your children under a single policy—an affordable way to protect the whole family under one plan.
• Long-Term Care Rider: Some whole life policies allow you to use your death benefit to pay for long-term care costs, providing flexibility if nursing home or in-home care becomes necessary.

What Does Whole Life Insurance Cost?

Whole life insurance premiums are significantly higher than term life premiums for the same amount of coverage. This is because you are paying not just for the death benefit, but also for the cash value component and the guarantee of lifelong coverage.

For example, a healthy 40-year-old might pay $70–$90 per month for a $500,000 20-year term policy, but $400–$600 per month or more for a comparable whole life policy. The difference is substantial—and whether that difference is 'worth it' depends entirely on your financial goals and situation.

Smaller whole life policies—particularly final expense policies—can be much more affordable. A $15,000 final expense whole life policy for a 65-year-old in good health might cost $80–$130 per month.

At Mauldin Insurance Group, we help you understand exactly what you are paying for and why—so you can make a decision based on real information rather than a sales pitch.

 

Term vs. Whole Life: A Side-by-Side Comparison

Here is a clear comparison of the key features of each policy type:

Coverage Duration

Term: Fixed period (10–30 years). Coverage ends when the term expires.  |  Whole Life: Lifetime coverage. Never expires as long as premiums are paid.

Premium Cost

Term: Lower, fixed premiums during the term.  |  Whole Life: Higher premiums, but they are fixed for life—they will never increase.

Cash Value

Term: None. No savings component.  |  Whole Life: Builds cash value over time that you can borrow against or withdraw.

Best For

Term: Income replacement, mortgage protection, budget-conscious families.  |  Whole Life: Final expense planning, estate planning, business uses, permanent needs.

 

How to Determine How Much Life Insurance You Need

One of the most common questions we hear at Mauldin Insurance Group is: 'How much coverage do I actually need?' The answer depends on your individual circumstances, but here are the most widely used methods for calculating a coverage amount:

The Income Replacement Method

A widely used rule of thumb is to carry life insurance equal to 10 to 12 times your annual income. If you earn $75,000 per year, you would aim for $750,000 to $900,000 in coverage. This provides your family with enough of a financial cushion to invest the death benefit and live off the interest for many years.

The DIME Method

DIME stands for Debt, Income, Mortgage, and Education—the four main financial obligations life insurance should cover:

• Debt: Add up all outstanding debts excluding your mortgage (car loans, student loans, credit cards, medical bills)
• Income: Multiply your annual income by the number of years your family will need support (often 10–15 years)
• Mortgage: Include the remaining balance on your home loan
• Education: Estimate the cost of college education for each child

Add these four numbers together, and you have a solid baseline for how much coverage to carry.

Don't Forget to Account For:

• Inflation — The purchasing power of your death benefit will erode over time. Consider building in additional coverage to account for this.
• Existing assets — Life insurance supplements your savings, investments, and other assets. If you have significant retirement savings or other assets, your coverage needs may be lower.
• Spouse's income — If both spouses work, the formula changes. Consider what would happen if either spouse passed away and adjust accordingly.
• Future obligations — Plan for obligations that don't exist yet, such as caring for aging parents or a future child.

At Mauldin Insurance Group, we sit down with every client and walk through a personalized needs analysis—completely free, with no pressure or obligation. We want you to make the right decision for your family, not the most profitable decision for us. Call 843-509-2462 to schedule your consultation.

 

Frequently Asked Questions About Life Insurance in South Carolina

Can I have both term and whole life insurance at the same time?

Absolutely. Many of our clients carry both types simultaneously. A common strategy is to use a large term policy to cover peak financial obligations (mortgage, child-rearing) while maintaining a smaller whole life policy for lifelong needs like final expenses or estate planning. This layered approach provides maximum protection during your highest-need years while ensuring some permanent coverage is always in place.

What happens if I can no longer afford my premiums?

For term life, missing payments can cause your policy to lapse after a grace period (usually 30–60 days). For whole life, you typically have options: you can use your policy's cash value to pay premiums, convert to a paid-up policy with a reduced death benefit, or take a policy loan to cover the payment. It is always best to contact your insurer or your agent at Mauldin Insurance Group before you miss a payment so we can help you find the best solution.

Can I convert my term policy to whole life?

Many term life policies include a conversion option that allows you to convert all or part of your coverage to a permanent policy without undergoing new medical underwriting. This is an incredibly valuable feature if your health declines during your term—it guarantees you can maintain coverage even if you would no longer qualify for a new policy. Conversion typically must happen before a specified age or before the term ends. Check your policy's terms carefully, and ask your Mauldin Insurance Group advisor about conversion options when shopping for term coverage.

Are life insurance death benefits taxable in South Carolina?

In most cases, life insurance death benefits are paid income-tax-free to beneficiaries. This applies to both term and whole life policies. However, there are some important nuances: if the policy is owned by your estate rather than directly by your beneficiaries, the death benefit may be subject to estate taxes if the estate exceeds federal exemption limits. Cash value withdrawals from whole life policies above your basis (the total premiums paid) may also be subject to income tax. We always recommend consulting with a CPA or estate attorney for advice specific to your tax situation.

How does my health affect my life insurance premiums?

Your health is one of the most significant factors in determining your premium rates. Insurers evaluate your medical history, current health conditions, prescription medications, height and weight, family history, and lifestyle factors such as tobacco use and dangerous hobbies. Based on this evaluation, you are placed in a health rating category—typically ranging from Preferred Plus (best rates) down through Standard and then Substandard or rated categories.

The good news is that even with certain health conditions, coverage is often still available. At Mauldin Insurance Group, we work with multiple carriers and know which ones are most favorable for specific health histories. We can often find you a better rate than you would find applying on your own.

What is a no-exam life insurance policy?

No-exam life insurance policies allow you to obtain coverage without a traditional medical exam. Instead, the insurer uses data from medical databases, prescription history, motor vehicle records, and a health questionnaire to make a coverage decision. These policies are faster to issue—often within days—but typically come with higher premiums than fully underwritten policies. They are an excellent option for people who want fast coverage, have a fear of needles, or have certain health conditions that make traditional underwriting difficult.

How long does the application process take?

The timeline varies depending on the type of policy and the underwriting method. No-exam policies can sometimes be approved within 24–72 hours. Fully underwritten policies with a medical exam typically take 4–8 weeks. Your Mauldin Insurance Group agent will guide you through every step of the process and keep you informed along the way.

 

Why Choose Mauldin Insurance Group for Your Life Insurance Needs?

There is no shortage of options when it comes to life insurance—you can apply online, call an 800 number, or work with a captive agent who only represents one company. So why choose Mauldin Insurance Group?

We Are Independent and Unbiased

As an independent insurance agency, Mauldin Insurance Group is not obligated to sell you any particular company's product. We represent multiple top-rated life insurance carriers, which means we can compare options objectively and find the policy that truly fits your needs—not the one that pays us the highest commission.

We Are Local and We Know South Carolina

We are your neighbors. We live and work in Lexington, and we serve families throughout the Columbia metro area and the entire Midlands region. We understand the unique needs of South Carolina families and the local community context in a way that out-of-state call centers simply cannot. When you call us, you talk to a real person who knows your community.

We Offer Personalized, Pressure-Free Consultations

We believe that informed clients make the best decisions. Our consultations are never high-pressure sales pitches. We ask questions about your life, your family, your goals, and your budget—and then we explain your options clearly so you can decide what makes sense for you. If life insurance is not the right move for you right now, we will tell you that too.

We Are Here for the Long Haul

Life changes—you get married, have children, buy a house, start a business, retire. Your insurance should evolve with your life. At Mauldin Insurance Group, we are not just here to write a policy and disappear. We conduct regular reviews with our clients to make sure their coverage still fits their needs and budget as their lives change.

Our Services at a Glance

• Term Life Insurance — Short and long-term coverage for families, homeowners, and businesses
• Whole Life Insurance — Permanent protection with cash value accumulation
• Final Expense Insurance — Affordable coverage for seniors to cover end-of-life costs
• Medicare Supplement & Medicare Advantage — Helping seniors navigate their Medicare options
• ACA Health Insurance — Marketplace plans for individuals and families
• Group Benefits — Employee benefit plans for small and mid-sized businesses
• Annuities — Retirement income solutions for individuals approaching or in retirement

Ready to get started? We would love to hear from you.

📞  803-920-8827

🌐  MauldinInsuranceGroup.com

📍  Lexington, SC — Proudly Serving the Entire Midlands Region

No pressure. No obligation. Just honest, helpful guidance from people who care about your family.