A contract between an individual or an insurance company to pay a specified amount of money to the beneficiary upon the policyholder’s passing. Life insurance’s purpose is to financially support loved ones in the case of the policyholder’s passing. It can help cover funeral costs and daily living expenses.

There are two types of life insurance. They are term life insurance and full life insurance. Term life insurance covers a set period, usually 10, 20, or 30, and pays out a death benefit if the policyholder is not alive within that time. Whole life insurance (also known as permanent insurance) provides coverage for the entire policyholder’s lifetime and pays out a benefit no matter when they die.

The death benefit is a lump sum that the policyholder receives when he or she dies. You can use this money to pay for a variety of expenses. The most common expenses beneficiaries use the death benefit to cover are:

• Funeral costs: A death benefit can be used for funeral, cremation or burial costs.
• Outstanding debts: All outstanding loans or debts that the policyholder owed can be paid using the death benefit. This provides financial relief for the beneficiaries.
• Daily living expenses: Death benefits can be used to pay for beneficiaries’ daily living expenses such as rent, mortgage payments, utility bills, or grocery costs.
• Education in college: The policyholder’s death benefit can be used to help pay the tuition of his or her children and grandchildren.
• Business continuation: The death benefit is available to policyholders who owned businesses. This allows beneficiaries to continue earning a living.

Life insurance is not only a financial tool that provides financial support for loved ones in the case of the policyholder’s passing but it can also be used to save and invest. For example, whole life insurance policies can build cash value over time that the policyholder can borrow against, withdraw, or use to pay off debts or provide additional retirement income.

Important to remember that beneficiaries can receive the death benefit from a life insurance policy without paying taxes.

Life insurance can be a useful tool to provide financial support for loved ones in the case of the policyholder’s passing. It can cover expenses such as funeral expenses, outstanding debts, and daily living expenses. Life insurance offers the additional benefit of saving money and investing opportunities. This is a great option for those who want to ensure the financial security of their loved ones.

If you are in need of life insurance in Texas, contact us today. We can help you whether you are located in Houston, Dallas, Fort Worth, Austin, San Antonio or El Paso.