Texas Life Insurance. Is your family protected?
If you’re like most Texans, you believe it’s important to protect your family-both now and in the future. The fact is, no one want to leave their loved ones unprepared. Responsible planning today can ensure that your family is taken care of in the future. While life insurance is a topic that many people prefer not to think about, it’s never too early to start thinking about your family’s financial protection in the unfortunate event something should happen to you.
Texas ranks 30th in the country for life expectancy, meaning that the average Texan lives until age 76. With that in mind, educate yourself on the different types of life insurance available and make an informed decision if and when you decide to purchase.
Why Life Insurance?
Life insurance is a necessary responsibility for anyone who has a family or other dependents who rely on you for financial support. Life insurance helps by replacing some or all of your income when you die. Some life insurance builds up a cash value that you can borrow from or use to pay for expenses while you are still living. Others offer no cash value, but are relatively inexpensive and excellent options for providing a cash benefit to your loved ones in the event you die.
Types of Life Insurance
Term Life Insurance
Term life insurance is typically the least expensive form of life insurance. Coverage is provided for a specific amount of time, or term. In Texas, term life insurance is sold for 5, 10, 15, 20, 25 and 30 year terms. When your policy ends, you have the option of renewing your policy or converting it to a permanent policy.
Term life insurance only pays a death benefit unlike a permanent policy that accrues cash value. As a result, in most cases, the premium is constant and doesn’t change for the duration of the term. Fixed premiums are an obvious benefit of term life insurance. Continue to make your premium every month to your insurance company and you are also guaranteed a fixed death benefit. If you die during the term of the policy, your beneficiary receives a lump sum cash benefit that can be used to pay for funeral costs, bills or other expenses.
Whole Life Insurance
Whole life insurance is permanent and therefore, there are no term limits. As long as you continue to make your premiums to the insurance company, your insurance policy is valid. A whole life insurance policy does not need to be renewed. In addition, whole life insurance gains cash value, which can be borrowed against. In this sense, a portion of your premium amount every month goes into a tax-deferred investment account that you can access at any time before your death. However, premium amounts for whole life insurance are not fixed as in term life insurance and because the policy accrues a cash value, premium amounts are generally higher.
Nevertheless, whole life insurance can give you financial security while you are living and is a useful tool for helping to pay for expenses. Need an emergency fund for unexpected situations? Whole life insurance can provide the cash necessary to create an emergency fund. If you need money for unexpected bills, repairs to your home or car or even emergency medical, it’s available. In addition, whole life insurance can provide cash to help pay for your children’s education. As a long time strategy, life insurance creates financial security.