Insurance and Finance

FAQs: Life Insurance

By Staci Parks 8.10.23

It can be hard to think about — much less talk about — but life insurance is a critical topic for every family. There are several reasons why people decide to purchase a life insurance policy. Most importantly, life insurance can provide your family with a financial safety net during a difficult, vulnerable time when they need it most.

Finding the right policy, wading through the jargon, and busting life insurance myths can be perplexing. But your Texas Farm Bureau Insurance Agent is there to help you cut through the noise and find the best life insurance policy for your unique needs.

Texas Farm Bureau Insurance Agents weigh in on six of policyholders’ most common life insurance FAQs.

Q: Do I need life insurance?

A: Life insurance can be a solid investment throughout any stage of life, whether you’re a newlywed or settling into the role of grandparent and nearing retirement age. If you’re on the fence, ask yourself this question: “Would my death financially impact my loved ones?” If the answer is “yes,” you might want to consider life insurance as a way to protect your family financially. People use the policy money for a variety of things, including:

  • Replacing income.
  • Paying off debt, including a mortgage.
  • Covering funeral costs.
  • Paying for childcare or education.

Q: What types of life insurance are there?

A: There are various types of life insurance. Learning the differences between the policies can help you make the right selection for your needs. Here’s an overall look at three of the most common types of life insurance:

  • Term life: Many people flock to this type of policy because it’s affordable and lasts as long as needed. This type of policy lasts for a specific “term,” ranging from 10- to 30-year plans and can be used to meet specific financial goals (e.g., paying off debt or giving your children extra protection once you’re gone).
  • Whole life: This type of permanent life insurance typically covers you until your 100th birthday. Some policyholders use this policy to diversify their investment portfolio or secure financial protection for dependents who may need long-term care.
  • Convertible life: This policy starts out as a term life policy. The exception is that you have the opportunity to convert it to a whole life policy toward the end of the policy’s term. This option is helpful should your needs change throughout the term.

Q: I have life insurance through my job. Isn’t that enough?

A: Not always. While some companies offer life insurance as part of their employee benefits package, it’s not always enough to cover your individual needs. In some cases, you must make sure you sign up for it. Keep in mind: You often lose that coverage once you stop working for the company. When you purchase your own life insurance policy, you have more control over the death benefit amount, and the policy follows you wherever you go — as long as you keep up with the premium.

Q: How much does life insurance cost?

A: Several factors determine the cost of your life insurance premium, and they vary among policy types and companies. Your Agent can help you get a life insurance quote. Some of the most common factors that determine your life insurance premium rate include your:

  • Age. Typically, the younger you are, the less you’ll pay for life insurance. This is why it can be a good idea to buy a policy when you’re younger.
  • Occupation and lifestyle. You could pay more if you have a high-risk job in industries such as law enforcement or construction. This also extends to people with “risky” hobbies, such as skydiving or motorcycle racing.
  • Smoking status. Smokers have a higher chance of developing health issues over time, making their life insurance rate more expensive than rates for nonsmokers.
  • Policy type. Whole life policies are more expensive than term life insurance policies. Weigh your options before making a selection.

Q: How much life insurance do I need?

A: There’s no universal magic number that fits every policyholder. A general rule of thumb is to cover your financial obligations, which can include your mortgage, medical debt, or education costs. When choosing a death benefit amount, you want to ensure your loved ones will have what they need for financial stability when you’re no longer here.

Q: How do I buy life insurance?

A: Your Texas Farm Bureau Agent can walk you through the pros and cons of the different types of life insurance. This way, you have security and solace knowing you’ve made the best choice for your family. Your Agent is there to answer your life insurance questions and help guide you in the right direction. Contact your Texas Farm Bureau Insurance Agent about life insurance today.

Wondering what other insurance policies you might want to consider? Insurance 101 has everything you need to know about getting the right insurance coverage that fits your circumstances.

Coverage and discounts are subject to qualifications and policy terms and may vary by situation. Life insurance products are offered through Southern Farm Bureau Life Insurance Company. © 2023 Texas Farm Bureau Insurance