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
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
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.