Life Insurance in Texas
Clients who are thinking of buying a home here in Willis, TX typically want to know how much home insurance they will need. Many, especially if they are young, are taken back when we tell them that most likely, depending on their mortgage lender, they will need some life insurance as well. Some borrowers require purchasing mortgage life insurance, also known as mortgage protection life insurance. In contrast, others will waive this requirement if you have either whole life insurance or term life insurance. This, in turn, opens up a full basket of questions starting with:
Which is Better for Me, Life Insurance or Mortgage Life Insurance?
If you're only interested in making sure your mortgage will be paid off, should you die before its end date, mortgage life insurance is what you're looking for. However, if you want to make sure your family will be taken care of financially, you want life insurance.
Mortgage life insurance is designed to cover the balance remaining on your mortgage should you die. And when you have paid off the mortgage, your coverage ends. Unlike life insurance, where your beneficiaries will receive a lump sum of money in the event of your death, mortgage life insurances benefits will be sent directly to your lender.
Should you live, and we hope you will, you may receive premiums back beyond your mortgage, but they will be reduced in value due to inflation. And on top of that, you will have missed the opportunity to invest any money you might have saved had you purchased a term life insurance policy that matched the length of your mortgage.
What's the Difference Between Whole Life Insurance and Term Life Insurance?
Both have what can be viewed as excellent and not-so-good points. Term life covers you for a defined amount of time, like 10 or 20 years. Should you die within that time, your beneficiaries will receive a set amount of money. But if you live, neither you nor they will not receive anything at all. Term life is less expensive than whole life.
Whole life is a permanent policy. That is, it will cover you for your whole life and will pay your beneficiaries without regard to when you pass away. Whole life insurance comes with a cash value account into which a part of your premiums will be invested. When it reaches a specific value, you can borrow against it. As mentioned above, whole life insurance costs more than term life.
Since the needs of Texas homeowners are diverse, we encourage you to come in and discuss your circumstances with one of our knowledgeable agents at Melvin Guesser Insurance Agency in Willis, TX.
