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Who Buys Texas Life Insurance?

You should buy term insurance now, or at least 80% of the Texan individuals who read this article should.  This statement can be made because only 20% of individuals do not need any type of term insurance.   

Before determining who needs Texas term life insurance and who does not, the first thing to understand is the definition of term insurance.  Term life insurance is a temporary insurance product that is usually purchased for 5, 10, 20, and 30 year coverage periods.  Though some term offers the option of being converted to permanent insurance, most term policies do not offer this option.  Term life insurance builds no cash value and the premium is typically lower than permanent life insurance (whole, universal or life insurance).  The key feature of term life insurance is that the policy holder can secure a large policy face value and pay pennies on the dollar when comparing premium paid to benefit received.  In fact, term insurance costs on average about 5% of the death benefit of the insurance over the coverage period of the policy.  The rule of thumb on term is that the younger you are and the lower the face amount the lower the premium will be.

So who should not buy Texas term insurance?  An Individual who is extremely wealthy, who feels their estate is of such magnitude that their heirs will be financially taken care of and that actions have been taken to minimize the tax consequences from passing assets to the next generation then term insurance is not right a good option.  Another example would be an individual with no heirs and wants to support a worth charity, then term insurance is not a reasonable option.

So who buys term health insurance?  First of all, anybody who wants to protect their heirs or ensure the longevity of a business purchases term life insurance because it provides a significant benefit with a reasonably low premium cost. 

For example, take a newly married couple that has their first baby and a significant amount lot of debt.  If it take the best efforts of one or both of the parents to maintain the household which would include the mortgage, credit card debt, students loans, medical insurance and other necessities, what would the surviving spouse do if the other spouse passes away?  The answer is often term insurance.

Letís take a couple that is debt free and wants to travel.  What would happen if the husband passed away and left his spouse with ongoing living expenses?  The answer to provide for future financial needs is of course to buy life insurance.

Letís say you a middle age person or older and you do not want to burden your family with the cost of your death.  Well getting a low face amount (under $50,000) term life insurance product would pay the final expenses upon your death.

Letís say a business owner is faced with the death of a key employee who is responsible for a significant amount of revenue.  Would the loss of a key employee strain your ability to operate profitably?  Texas term life insurance can provide a financial bridge while a new manager is being recruited.

There are hundreds of other scenarios that can be outlined but the key aspect to remember is that if there is any debt, term life insurance is an excellent means of protecting your family or business.

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