Life Insurance in Texas: Questions to Answer Before Choosing a Policy
Life insurance should start with the financial problem you are trying to solve. Coverage amount, policy duration, beneficiaries, underwriting, premium structure, and whether a policy builds cash value can all change the fit.
Who may need life insurance?
The Texas Department of Insurance says life insurance is generally worth considering when family members or others rely on you financially. Common planning questions include debts, income replacement, dependents, education costs, final expenses, and other obligations.
Term life vs. permanent life
| Feature | Term life | Permanent life |
|---|---|---|
| Coverage period | A selected term, such as a set number of years. | Designed for longer-duration or lifetime coverage when policy requirements are met. |
| Cash value | Generally no cash-value component. | Some permanent policies build cash value. |
| Premiums | Often lower initially, but renewal pricing can change after the term. | Usually higher because of longer-duration coverage and, for some policies, cash-value features. |
| Complexity | Usually simpler. | Can involve more moving parts, including cash value, policy charges, guarantees, and surrender rules. |
Questions to work through
- Who depends on your income?
- How long would financial protection be needed?
- What debts or ongoing obligations should be considered?
- Who should be named as beneficiary?
- What underwriting or medical information may be required?
- Are premiums guaranteed for the period you expect?
- If cash value is involved, what are the guarantees, charges, loans, withdrawals, and surrender rules?
- What happens if premiums are reduced or missed?
Do not buy from an illustration alone
Projected cash values, dividends, or policy performance can differ from guarantees. Read the current policy illustration and contract carefully, and distinguish guaranteed values from non-guaranteed assumptions.
Official Texas source
Scope note
This page provides general education. It does not establish specific life insurance product availability, rates, underwriting outcome, policy performance, or suitability for a particular person. Verify current policy materials and eligibility before deciding.