If you are searching for League City TX Term Insurance, you are in the right place. Texas Insurance Agency takes pride in providing all of our clients with the best possible coverage no matter what policy you need. Our agents are on standby ready to give you the best advice for your home, business, life, and much more. Contact us today to get a free quote!
What is Term Life Insurance?
Term life insurance is a type of policy that guarantees payment of a stated death benefit if the covered person were to die during a specific period of time. Once the term reaches its expiration, the policyholder can do either one of the following:
- Convert the policy to permanent coverage
- Renew it for another term
- Allow the term life insurance plan to terminate itself
Upon purchasing term life insurance, the company will determine the premiums based on the value of the policy. Your age, gender, and health are also considered. In some cases, a medical exam may be a requirement. The insurance company may also consider your driving record, smoking status, occupation, hobbies, family history, and much more.
Therefore, if you were to die during the term of the policy, the insurer will pay the face value of the policy to your beneficiaries. This cash benefit can help cover funeral costs, consumer debt, or mortgage debt amongst many other things. However, if the policy were to expire before you die, the premiums will be recalculated for your age at the time of renewal. Therefore, term policies have no value other than the guaranteed death benefit. With that said, there are no savings components associated with term life insurance like whole life insurance policies.
Understanding Term Life Insurance
Because the policy provides benefit for a limited time and provides only a death benefit, it cost much less than your typical insurance policy. As a result of most term life insurance policies expiring before paying a death benefit, the overall risk to the insurer is much lower than permanent life insurance.
Therefore, this reduced risk enables the insurers to pass cost savings to the customers in the form of lowering premiums. Additionally, the interest rates, the financials of the insurance company are all important factors when it comes to premiums.
Types of Term Life Insurance
There are many types of term life insurance. Therefore, the best option for you depends heavily on your personal situation. Let’s take a look at some popular types of term life insurance.
Level Term or Level Premium Policies
This type of coverage is provided for a specific range of time between 10-30 years. Both the death benefit and premium payments are a fixed rate. Because actuaries must account for the rise in costs, the premium is higher than yearly renewable term life insurance policies.
Yearly Renewable Term Policies
This type of policy has no specified term. However, it can be renewed each year without providing evidence of insurance. Typically, the premiums change from year to year. Therefore, as the insured ages, the premiums increase. Even though there is no specific term, premiums can become very expensive as individuals age.
Decreasing Term Policies
These particular policies have a death benefit that decreases every year. This is following a predetermined schedule. Therefore, the policyholder pays a fixed, level premium for the remainder of the policy. Decreasing term policies are typically used with a mortgage in order to match the coverage with the reduced principal of the home loan.
Why Term Life Insurance is Beneficial
Term life insurance is a good choice for younger individuals with children. Parents may have large amounts of coverage for a considerably low cost. Therefore, upon the death of a parent, the beneficiaries can replace lost income.
These policies are also best for people who are temporarily in need of specific amounts of life insurance. For instance, the policyholder may calculate that by the time the policy expires. Their survivors will no longer need additional financial protection or will have collected enough liquid assets to self-insure.
The Difference Between Term Life Insurance and Permanent Life Insurance
The most obvious difference between term life insurance and permanent life insurance is the duration of the policy. Another clear difference depends on your needs. Here are a few factors to consider:
The Cost of Premiums
Term life policies are standard for people who want substantial coverage for a low price. Whole life customers pay more in premiums for the least amount of coverage but rest assured they are protected for life.
Although many buyers fancy the affordability of term life, paying premiums for an extended period and having no benefit after its expiration is not the best coverage. Upon renewal, term life insurance premiums can increase as you age and may become extremely expensive as time progresses. In reality, renewal term life premiums may be more costly than typical permanent life insurance.
Coverage that is Available
Unless a term policy is a guaranteed renewable policy, the company can refuse to renew coverage at the end of a term. With permanent insurance policies, you are provided with protection for life as long as premiums are paid.
Are You Searching for League City TX Term Life Insurance?
Texas Insurance Agency takes pride in providing our clients with the best coverage on the market. We collaborate with major insurance companies like Progressive and Liberty Mutual to provide you with the best protection for you, your family, your home, and so much more. Stop searching for League City TX Term Life Insurance, and contact us today to learn more!
League City, TX Fun Facts
One of the top 10 smartest cities in Texas and 99 among the smartest cities in the United States with a population between 50,000 and
99,000 by The Business Journals’ On Numbers in 2009Best Small Cities in America by Money Magazine in 2006
- Three golf courses, 14 baseball fields, 16 soccer fields, and 11.5 miles of trails with a plan to grow to a network of 212 miles of trails when complete
- For more information or fun facts, search League City, TX.