First Citizens Bank: Life Insurance Offerings And Benefits

First Citizens Bank offers a wide range of life insurance products, including term, universal, and variable universal life insurance. The bank also provides long-term care and disability insurance. Life insurance is a crucial component of a comprehensive financial plan, and First Citizens Bank aims to help individuals and families find the right coverage to protect their financial future. With various options available, the bank assists customers in navigating the different types of life insurance to make informed choices that suit their unique needs and goals.

First Citizens Bank's life insurance options

First Citizens Bank offers a wide range of life insurance products, including term, universal, and variable universal life insurance. The bank's life insurance products are designed to provide financial security and peace of mind for individuals and their loved ones.

Term Life Insurance

First Citizens Bank offers term life insurance, which is considered temporary coverage for a specified amount of time, typically between 1 and 30 years. Term life insurance provides a lump-sum, tax-free benefit to beneficiaries after the insured's death. It is often a cost-effective choice for covering large but temporary expenses, such as a mortgage or education costs for children. Additionally, some term life policies offered by the bank are convertible, allowing policyholders to switch to a whole life insurance policy later on.

Permanent Life Insurance

First Citizens Bank also provides permanent life insurance options, including whole life insurance and universal life insurance. Whole life insurance offers lifelong coverage as long as the policy remains in force, and it includes a savings component that grows over time. Policyholders can access the cash value during their lifetime or leave a benefit for their loved ones. Universal life insurance, on the other hand, offers a conservative investment element, with interest rates set by the insurer.

Variable Universal Life Insurance

For those seeking a combination of life insurance and investment opportunities, First Citizens Bank offers variable universal life insurance. This type of policy includes a life insurance portion and an investment portion, allowing policyholders to invest in stocks, bonds, and other vehicles. However, it's important to note that the financial risk is transferred to the insured with this option.

Customized Insurance Plans

First Citizens Bank emphasizes the importance of tailoring insurance plans to meet individual needs. The bank's advisors work with customers to assess their unique situations and recommend appropriate coverages, including life insurance, to preserve financial stability and provide peace of mind.

Life insurance misconceptions

There are several misconceptions surrounding life insurance that may prevent people from getting the coverage they need. Here are some common myths about life insurance, along with the facts that debunk them:

Myth 1: Life Insurance is Only Useful After My Death

Fact: Life insurance is a risk management tool that helps protect against financial risks associated with dying but also with living too long. With advancements in medicine and science prolonging life expectancy, individuals may face financial challenges if they live beyond their income-generating years. Additionally, life insurance can help secure your financial future by offering options to build wealth, cover medical expenses, and plan for retirement.

Myth 2: My Company Covers Me, So I Don't Need Another Policy

Fact: Employer-provided life insurance typically covers you only during your employment and may not be sufficient for your future needs, such as family expenses or retirement. It is advisable to supplement this coverage with a personalized policy that meets your long-term financial goals and ensures your loved ones' financial security.

Myth 3: I Don't Need Insurance If I'm Young, Single, and Healthy

Fact: Life insurance is most affordable when purchased at a young age, as premiums are lower. It is important to consider future needs, such as family commitments, health expenses, and retirement. By securing a policy early, you can lock in lower rates and ensure coverage regardless of future health changes.

Myth 4: Life Insurance is Expensive

Fact: Life insurance premiums are versatile and can be adjusted to suit your budget. Term insurance, for example, provides a large sum of coverage for a relatively low premium. You can start with a small investment and gradually increase your coverage as your income and responsibilities grow.

Myth 5: My Life Insurance Policy Through My Employer is Enough

Fact: While employer-provided life insurance is beneficial, it typically covers only a fraction of your annual salary or has a low fixed cap. Depending on your financial situation and goals, experts often recommend a policy worth at least 10 times your annual salary. Therefore, it is important to assess your needs and consider additional coverage to ensure adequate protection.

Myth 6: I'm Not Eligible for Insurance Because of My Age or Pre-existing Condition

Fact: Life insurance policies are designed to meet a range of needs, and higher age can be advantageous for certain products like annuities. While pre-existing conditions may impact pricing, there are still options available. Some policies do not require medical exams, and guaranteed issue life insurance is designed for those who do not qualify for traditional policies due to serious medical conditions.

It is important to remember that life insurance is a highly personalized product, and the right coverage for you will depend on your unique circumstances. Consulting with a trusted financial advisor or insurance specialist can help you navigate the different options and choose the most suitable plan for your needs.

How much life insurance do I need?

When it comes to life insurance, it's important to assess your unique financial situation and goals to determine the appropriate coverage amount. Here are some detailed guidelines to help you decide how much life insurance you need:

Income-Based Rule of Thumb:

A common guideline is to aim for a life insurance policy worth approximately 10 times your annual salary before taxes and deductions. This can serve as a starting point, especially if you're single and early in your career, as your salary and financial liabilities are likely lower compared to later stages of your career. As your income and responsibilities grow, you can adjust your coverage by taking out multiple life insurance policies to ensure adequate protection.

The DIME Formula:

The DIME formula is a more comprehensive approach, considering various financial factors:

• Debts: Calculate all your existing loan balances, excluding mortgages.
• Income: Estimate your annual income and multiply it by the number of years your dependents will require financial support.
• Mortgage: Determine the total amount owed on your home, including any second mortgages or lines of credit.
• Education: Estimate the costs of higher education for your children or dependents.

The DIME formula provides a more accurate estimate of essential costs but may not include all future expenses, such as healthcare and daily living expenses.

Financial Obligations Minus Liquid Assets:

This method involves calculating your financial obligations and then subtracting your liquid assets:

• Financial Obligations: Consider your annual salary multiplied by the desired number of years of income replacement, mortgage balance, future needs like college fees, and costs associated with a stay-at-home parent's contributions.
• Liquid Assets: Include savings, existing college funds, and current life insurance policies.

The difference between your financial obligations and liquid assets is the recommended amount of life insurance coverage.

Additional Considerations:

• Life Stage and Family Dynamics: Your life insurance needs will vary depending on your life stage, marital status, and whether you have children or other dependents. Life events such as getting married, buying a house, or having children may increase the necessity for more comprehensive coverage.
• Future Expenses and Goals: Consider future expenses like college tuition and potential growth in your income or assets when calculating your insurance needs.
• Review and Adjust: Regularly review and update your life insurance policies to align with changes in your net worth, lifestyle, and insurance requirements.
• Multiple Policies: You can opt for multiple, smaller life insurance policies to cater to varying needs over time. For instance, you could have a long-term policy to cover your spouse's needs until retirement and a shorter-term policy to cover children's expenses until they complete their education.
• Term vs. Whole Life Insurance: Term life insurance covers a specific period, usually 10 to 30 years, and is suitable for those with limited budgets. In contrast, whole life insurance provides coverage until death and accumulates cash value that can be used as a loan or cash but reduces the policy's death benefit.

It's important to remember that these are guidelines, and your specific situation may require a more tailored approach. Consulting with a financial professional can help you make an informed decision about the right amount of life insurance coverage for your needs.

Types of life insurance

First Citizens Bank offers life insurance as part of its personal insurance plans. The bank's website provides a detailed description of life insurance and its benefits, but it does not specify the types of life insurance it offers.

Term Life Insurance

Term life insurance is a simple and low-cost policy that is typically sold in lengths of one, five, 10, 15, 20, 25, or 30 years. It is meant to replace your income when you die and is usually sufficient for most people. Term life insurance is often the cheapest option available. However, if you outlive your policy, your beneficiaries will not receive a payout.

Whole Life Insurance

Whole life insurance is a permanent policy that lasts your entire life, as long as you keep up with the premiums. It has a guaranteed rate of return on the policy's cash value, and the death benefit amount does not change. Whole life insurance is usually more expensive than term life insurance but offers a straightforward and secure option.

Universal Life Insurance

Universal life insurance is a flexible permanent policy that allows you to adjust your premiums and death benefit over time. It has a cash value component that grows based on market interest rates. Universal life insurance is typically less expensive than whole life insurance but does not guarantee the death benefit or cash value growth.

Variable Life Insurance

Variable life insurance is a type of permanent life insurance tied to investment accounts such as bonds and mutual funds. The cash value can rise or fall based on the performance of these investments. Variable life insurance offers the potential for considerable gains but requires hands-on management due to the daily changes in the cash value.

Burial or Final Expense Insurance

Burial or final expense insurance is a small whole life insurance policy meant to cover funeral, burial, and other end-of-life expenses. It typically has a guaranteed death benefit ranging from $5,000 to $25,000. A medical exam is usually not required, making it more accessible to seniors with pre-existing health conditions.

There are also other types of life insurance, such as group life insurance offered by employers, mortgage life insurance, credit life insurance, accidental death and dismemberment insurance, and joint life insurance. The best type of life insurance depends on your individual needs and budget.

Benefits of life insurance

First Citizens Bank does offer life insurance as part of its personal insurance plans.

Peace of Mind and Financial Security

Life insurance provides peace of mind and financial security for you and your loved ones. It ensures that your family will be taken care of financially in the event of your death, helping to cover living expenses, pay off debts, and maintain their quality of life.

Lump-Sum Payment

Your beneficiaries will receive a lump-sum payment, known as the death benefit, which is generally not subject to federal income taxes. This money can be used to cover final expenses, such as funeral costs, medical bills, and estate settlement costs.

Income Replacement

Life insurance can help replace lost income if you pass away. It provides financial support for your dependents, enabling them to cover daily expenses like rent, mortgage payments, utilities, and groceries.

Coverage for Chronic and Terminal Illnesses

Some life insurance policies offer coverage for chronic and terminal illnesses. This means that you can access your death benefit while you're still alive to pay for medical care and other expenses if you become seriously ill.

Supplement Retirement Savings

Certain types of life insurance policies, such as whole, universal, or variable life insurance, can accumulate cash value over time. This cash value can supplement your retirement savings and be used to cover expenses or as a source of loans.

Additional Benefits

Life insurance can also provide other benefits, such as protecting your assets, preserving a family business, and covering education expenses for your children. It can be customized to meet your specific needs and circumstances, ensuring that you have the right level of coverage.

Frequently asked questions