Life Insurance
Life insurance provides a cash benefit in the event of the premature death of the insured person. This benefit protects the financial livelihood of those left behind. Life insurance also provides a living benefit that funds life events such as obtaining a college education, purchasing a home, or paying to retire comfortably.
Understanding what life insurance is and the types of products available is the foundational knowledge needed in order to determine how much life insurance you need. Your Texas independent life insurance agent can provide you with more detailed information and work with you to determine the appropriate amount of life insurance needed by you to protect those you leave behind.
What does Life Insurance Cover?
Life insurance is a contract entered into between several parties. These include the policy owner and insurance company. The insurer promises to pay a stated amount, known as the policy benefit or face amount insurance, upon the death of the insured.
Affording to LIMRA, an industry-wide research and data collection association, 57% of Americans in 2014 were covered by a life insurance policy of some form. Further, based on LIMRA's 2015 Insurance Barometer Study:
- One-third of all Americans stated a need for more life insurance.
- Millennials were more likely than any other generation to overestimate the cost of life insurance by more than 200%.
- Those born in Generation X overestimated life insurance cost by 119%.
The Ownership and Types of Life Insurance
Life insurance can be broken down into categories based on ownership (group vs. individual) and type (term v. permanent). Group insurance is insurance bought by your employer, trade or membership organization. Life insurance provide in a group plan is typically provided at little or no cost to the employee. Individual insurance is purchased by a person based upon the life of a related insured. An example of an insured includes the policy owner, their spouse or a dependent to whom support is provided.
Term insurance is known as temporary insurance. It provides protection for a term of years or until a vetting age is attained, such as 65 or 70. Policy benefits are only payable during the policy period. Once the term period is reached and no death has occurred, no benefits are paid. Permanent insurance provides a benefit that's both long term (policy value payable at death) and immediate (cash value, accessible anytime).
Learn More About Life Insurance
There is much more information to learn about life insurance. Discuss these topics and others with your Texas independent insurance agents, who can provide you with solutions that meet your life insurance need.