Life Insurance in Texas

Is Life Insurance a Life or Death Matter?

You are not planning to have a heart attack tomorrow, or get a cancer diagnosis, or accidentally step out in front of a bus. For that reason, and especially if you are young and healthy and have no dependents, life insurance probably isn’t for you. Or is it?

Let’s look at what life insurance is, what it covers, and why people buy it. Then you can decide if now is the time to contact an independent agent in the Trusted Choice network who specializes in life insurance. Because these agents work with multiple life insurance carriers, they can compare policies and options on your behalf and help you make the best choice.

Life Insurance Statistics

• 40% of American adults have no life insurance
• Over 50% of U.S. households lack adequate life insurance coverage
• About 40% of people surveyed say they would have immediate financial trouble if the primary wage earner in their household died

Why Buy Life Insurance?

As with all insurance, life insurance plans are about preparing for the unexpected. We don’t plan to have a heart attack or meet an untimely end. We may fret about the unforeseen, but there are few ways to prepare for it. Life insurance provides a way to be prepared and get peace of mind.

The main reason to buy life insurance is for financial protection for your family and dependents. If you are the sole income earner or the major provider in your family, then life insurance definitely makes sense. If you should die unexpectedly, your policy will help your loved ones pay your final expenses and potentially receive ongoing support. The amount they receive will depend upon the size of policy you buy.

How Much Life Insurance Do You Need?

Choosing a life insurance plan requires a bit of math. You want to figure out how much your family needs for daily spending and major upcoming expenses in the event that you pass away too soon and cannot provide for them. Or, if you are young, single and healthy, you can look at the cost of paying off any debt you have accumulated, or the cost of care for an aging parent.

For the following simple example, we will pretend there is no interest or tax. But in reality those factors will affect the amount of benefit your beneficiaries receive.

Example:

• You purchase a $500,000 life insurance policy.
• Upon your passing, your family spends $10,000 for your final expenses, leaving $490,000 to be divided up over the payout period for your designated beneficiaries.
• If the payout period is 20 years, the payments would be about $24,500 per year, or about $2,040 per month.

Again, interest and tax are not figured into this simplified example. What makes life insurance so confusing is that there are several different types of coverage, including term life and whole life or permanent life insurance. Additionally, the details of the policy you choose will be unique to your personal situation.