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Ashford Insurance

Texas Life Insurance

Life Insurance Made Easy

Texas Life Insurance

Not everyone needs life insurance. In general, life insurance is a good idea if you have family or others who rely on you financially. To decide 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.

Your life insurance company 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 do other things. Some types of life insurance also build savings you can use during your lifetime.

Life insurance financially protects your family and other people 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 do other things. Some types of life insurance also build savings you can use during your lifetime.

A Texas life insurance policy is a contract with an insurance company. In exchange for premium payments, the insurance company provides a lump-sum payment, known as a death benefit, to beneficiaries upon the insured’s death. Typically, life insurance is chosen based on the needs and goals of the owner. 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. There are three basic types of life insurance that differ in their details.

How much does life insurance cost?

The cost depends on your age, health, and risk factors. They’re usually lower for younger people. A company can charge you more if you have health conditions, 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.

For group policies, the risk is based on the whole group, not on one person. The cost is usually cheaper than for a policy you buy directly from an insurance company.

Texas Term life insurance: 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 low premium reflecting this. Most term life insurance policies are renewable and convertible.

Term life insurance is the most basic of life insurance that can be purchased.

This is because term life offers just pure death benefit protection only, without any cash value built up within the policy.

Because of this, term life insurance is often very affordable – especially for those applicants who are younger and in good health at the time they apply for the coverage.

With term life insurance, coverage is purchased for a certain length of time, it could be as short as a 5-year policy if you purchase or a short-term life insurance plan or longer terms such as for ten years, 15 years, 20 years, 25 years, 30 years – and in some cases, even longer.

There is also a 1-year renewable term life insurance option that is offered by many of the best life insurance carriers.

Typically, when purchasing a level term life insurance policy, the amount of the premium will remain the same throughout the period that the policy is in force. Provided that the insured survives throughout the time period of the policy, and he or she wishes to remain covered by life insurance, they will need to re-qualify for a new policy at their then-current age and health status.

At that time, the premium on a new life insurance policy may be quite a bit higher. In some cases, a term life insurance policy may have an option to convert the coverage over into a permanent life insurance plan.

Texas Whole life insurance: 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 which the insured may withdraw or borrow against during their lifetime. Compared to other forms of investing, life insurance policies tend to offer a low rate of return. Consult with someone knowledgeable about financial planning before choosing a whole life insurance policy.

The simplest type of permanent life insurance coverage is whole life. With this type of coverage, the premium amount is locked in and will remain the same throughout the entire lifetime of the policy.

This can be helpful for those who need to stick to a budget. It also means that if a person purchases a whole life policy at an early age, they will still pay the same amount of premium when they get older – regardless of advancing age, or even an adverse health issue.

In some cases, where a person’s pre-existing conditions require the individual to buy high-risk life insurance, some graded whole life policies are the only option.

The cash that is in the cash value component of a whole life insurance policy is allowed to grow on a tax-deferred basis. This means that the gain on these funds will not be taxed until or unless they are withdrawn – allowing them to compound exponentially over time.

First, the cash in a whole life insurance policy will grow slowly. This is because most of the early premium dollars will go towards paying the agent’s commission and the insurance costs. However, over the years, the cash in a whole life policy can steadily grow, often with a minimum guaranteed rate of return.

Some whole life insurance policies will even provide dividends to their policyholders. Because these are a return of premium to the policyholder, they are also not taxed. Dividends can also help the cash value in a policy grow significantly – although they are never guaranteed.

Texas Universal life insurance: Another form of permanent coverage is universal life insurance. 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 more than 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.

This type of life insurance also provides a death benefit and a cash value component where the funds are allowed to grow tax deferred.

Universal life insurance is more flexible than whole life coverage, though. This is because the policyholder is allowed – within certain guidelines – to choose how much of his or her premium dollars will go towards the policy’s death benefit, and how much will go towards the policy’s cash value.

Because universal life is a permanent life insurance policy, the policyholder will have access to their cash-value account. So, just as with a whole life plan, the cash can be borrowed or withdrawn for any reason – including paying off debt, supplementing retirement income, or even going on a vacation.

There is also an Indexed Universal life insurance policy available that will aggressively grow your cash value in the policy over time, but you must be aware of the disadvantages of this type as well.

Sonia, “The Medicare Insurance Lady”,  has been helping Medicare eligibles in Texas with their Medicare Insurance now since 2005. She has been married to John Ashford since 1982 and they reside in Bedford, Texas. They have six adult children and nine adorable grandchildren that they love to spoil. In Sonia’s limited spare time she enjoys quilting and crafting.

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