For many, insurance and the fine print that comes with it can make choosing the ideal plan an overwhelming experience. How much should you spend? How much can you afford to spend? What type of insurance is right for you and your goals? If you are considering buying life insurance, these questions are likely top of mind. And, depending on what state you live in, there are certain regulations you should also consider. If you are looking to purchase life insurance in Texas, there are some rights and regulations with which you should be familiar. In this article, we will explain the basics of choosing a life insurance policy and will also explain the laws in Texas that might help inform your decision.
What Are the Different Types of Life Insurance?
Term Life Insurance
Aptly named, term life insurance provides coverage for a specific time period. Also referred to as “pure life insurance,” term life insurance is intended only to insure your dependents in the event of your premature death. Should you pass away during this term, your beneficiaries will receive the payout outlined in the plan. There is no other value to a term life insurance policy.
The most common term life insurance policy terms are 10, 20 or 30 years. Typically, the payout (or death benefit) and the cost (or premium) remain the same throughout the term of the policy.
Permanent Life Insurance
Also known as whole life insurance, permanent life insurance provides coverage for the length of your life, and also includes an investment component, known as the cash value of the policy. This cash value appreciates slowly and is tax-deferred, meaning that you will not have to pay taxes on its gains as they accumulate.
With a permanent life insurance policy, you can borrow money against the account or surrender the policy for the money. However, if you fail to repay policy loans with interest, it will reduce your death benefit, and if you choose to surrender the policy, you will also surrender any further coverage.
Life Insurance Texas
Each state carries its own right and regulations when it comes to life insurance. In Texas, the insurance industry is regulated under Title 17 of the Texas Insurance Code. The purpose of these codes is to define the claims procedures and policy requirements for your benefit and protection.
One of these protective measures includes the 30-day grace period on late premium payments that is required by Texas law of all life insurance policies. During this period, the insurer cannot cancel your policy, and your coverage will continue as long as your account is brought current.
A Texas life insurance company is also required to begin the settlement process within 15 days of the reception of a written claim notification. The policy holder should be notified of the status of the claim within another 15 days.
Purchasing life insurance can be a daunting experience no matter what state you live in. Knowing the specific life insurance rules and regulations of the state you live in should be a critical component of your decision. At Schuler Insurance Services, we are committed to offering the simplest and most affordable method for Texas residents to choose the life insurance policy that best meets their unique needs and budget. We provide free life insurance quotes, and our team of experts is always available to answer any of your questions.
Whether you are considering a whole life insurance policy or a term life insurance policy, we can help you understand the ins and outs of both types of plans to help you find the right policy for you and your family. Contact us today to learn more!