Texas Life insurance pays out when the insured person dies.  The idea is to protect loved ones from a sudden loss of financial support. You could also use it to support your local charity. Three basic types of life insurance differ in their details.

Texas Life insurance financially protects your family and those who rely on your income. If you have life insurance, it will make payments after your death to the person you name in your policy. This person is called your beneficiary. You can name more than one beneficiary. Your beneficiaries can use the money to pay bills and living expenses, pay off debts, pay for college, and other things. Some types of life insurance also build savings you can use during your lifetime.

Texas Term life insurance is known as “pure” life insurance, because it pays out the death benefit if the insured person dies within the defined term, anywhere from one to thirty years. If the named person does not die, no portion of the premiums will be returned to the policyholder.  It simply insures against loss of life and has a relatively low premium reflecting this.  Most term life insurance policies are renewable and convertible.

Texas Whole life insurance has no predefined term; it provides death benefit protection over the “whole” life of the insured, as long as the premiums are paid.  A whole life policy also combines an investment component with the insurance component: it accumulates a cash value that the insured may withdraw or borrow during their lifetime.  Compared to other forms of investing, life insurance policies tend to offer a relatively low rate of return.  Consult with someone knowledgeable about financial planning before choosing a whole life insurance policy.

Texas Universal life insurance has a cash value determined by short-term interest rates versus the stated long-term rate of a whole life policy.  Premium payments over the cost of insurance are added to the policyholder’s interest-bearing account.  Although interest rates will fluctuate, they cannot fall below the policy’s stated guaranteed interest rate.  Consult with someone knowledgeable about financial planning before choosing a universal life insurance policy.

Not everyone needs life insurance. In general, life insurance is a good idea if you have family or others who rely on you financially. There’s no formula to decide how much life insurance you need. To determine the amount that’s right for you, consider your debts, the amount of income your family must replace, and whether they’ll have bills or other expenses.

You can buy life insurance directly from insurance companies and agents. Insurance companies use a process called underwriting to decide whether to sell you a policy. This often includes passing a medical exam and answering questions about your health, job, and habits. A company can refuse to sell you a policy if it considers you a high risk because of your health or other reasons.

The cost depends on your circumstances. Life insurance premiums are based on your age when you buy the policy. They’re usually lower for younger people. They can be high if you’re older or have risk factors. A company can charge you more if you smoke or have risky hobbies like skydiving or rock climbing. Your premium will also depend on other things, including the amount of coverage and policy features you choose.

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