Millions of Americans have life insurance, either privately purchased or through their employers; however, many are not aware of what type of life insurance policies they hold. There are two main types of life insurance - term and whole - and within those types, several subgroups. Texas insurance expert James Flynn and his team provide individuals and families with all types of life insurance in McKinney TX and surrounding areas.
Life Insurance in McKinney TX - the 3 Most Common Types of Policies
Term Life Insurance
A term life insurance policy is what most people think of when they think about life insurance. The concept is simple - the insured buys the policy and names his beneficiaries, and if he dies during the term of the policy (typically 30 years), his beneficiaries receive the life insurance benefits. Term life insurance policies have no cash value; they are worth nothing on their own and only produce cash when the insured dies and the benefits are generated. There are two types of term life insurance policies - level term, for which the benefit remains the same throughout the policy term, and decreasing term, for which the benefit decreases …show more content…
Whole life policies also differ from term policies in that they have a cash value, accumulated from the premiums paid and saved tax-deferred. This means the insured can borrow money from the policy while he is still alive - however, if he dies with an outstanding loan, the loan balance is deducted from the total amount paid to beneficiaries. The insurance company will also charge interest on the loan until it is paid in full, and that interest also reduces the death benefit. Whole life policies can also be expensive, particularly if you purchase one when you are older. A young person considering a whole life policy should buy as soon as possible to maximize the
Life Insurance in McKinney TX - the 3 Most Common Types of Policies
Term Life Insurance
A term life insurance policy is what most people think of when they think about life insurance. The concept is simple - the insured buys the policy and names his beneficiaries, and if he dies during the term of the policy (typically 30 years), his beneficiaries receive the life insurance benefits. Term life insurance policies have no cash value; they are worth nothing on their own and only produce cash when the insured dies and the benefits are generated. There are two types of term life insurance policies - level term, for which the benefit remains the same throughout the policy term, and decreasing term, for which the benefit decreases …show more content…
Whole life policies also differ from term policies in that they have a cash value, accumulated from the premiums paid and saved tax-deferred. This means the insured can borrow money from the policy while he is still alive - however, if he dies with an outstanding loan, the loan balance is deducted from the total amount paid to beneficiaries. The insurance company will also charge interest on the loan until it is paid in full, and that interest also reduces the death benefit. Whole life policies can also be expensive, particularly if you purchase one when you are older. A young person considering a whole life policy should buy as soon as possible to maximize the