If you need assistance with a quote for Term Life Insurance or have any questions, please feel free to contact one of our licensed term life insurance agents for service. Call 713-626-2838.
About Term Life Insurance
The main reason for life insurance is to provide income replacement to your beneficiaries when you die.
Simply, term life insurance provides death-benefit protection for a specified period of time (for instance, you might buy a policy that has to be renewed in two years). Generally speaking, if you’re looking for coverage for a short period of time, term life makes more sense.
Keep in mind that all life insurance policies require that you meet certain medical criteria.
Determine how much term life insurance you need
How much life insurance you need is a very personal decision. A general rule of thumb is that you should have at least six times your annual income in life insurance. But in determining what is best for you, you’ll also want to consider other obligations you may have and whether or not you want to have them completely or partially paid for upon your death. Such expenses include your mortgage, outstanding debts and future college expenses for your children.
Life insurance is a crucial part of many estate plans. It can:
- Provide much-needed income to your survivors that is immediately accessible
- Allow you to replace wealth lost due to estate shrinkage (i.e., the estate taxes and expenses associated with your death)
- Allow you to give money to your favorite charity
Protect your survivors financially with term life insurance
You can buy life insurance to help ensure that your survivors don’t suffer financially when you die. You can help protect their long-term financial needs by planning so that they will have enough money to pay their bills and live comfortably for years to come. You can also use life insurance to help protect your survivors’ short-term financial needs. Because life insurance proceeds normally don’t pass through probate, your loved ones will have enough money to pay their bills right away–they won’t have to wait until your estate is settled.
Replace wealth that is lost due to estate shrinkage with term life insurance
Life insurance may be the number one method of replacing wealth that is lost due to estate shrinkage. To ensure that the estate (money and assets) you leave to your survivors isn’t less than you intended, you can buy enough life insurance to cover the expenses associated with your death, such as taxes, fees, and other debts your survivors will have to pay.
Give to charity with term life insurance
If you want to leave money to charity when you die, consider using life insurance. Not only does life insurance allow you to make a substantial gift to charity at relatively little cost to you, but there are certain tax benefits as well. For instance, depending on how you structure your gift, you may be able to take an income tax deduction equal to your basis in the policy or its fair market value, or you may be able to deduct the premiums you pay for the policy. In addition, gifts to charity may reduce estate taxes owed when you die.
Plan carefully if you expect to leave behind a substantial estate
Your survivors generally won’t owe income tax on any life insurance proceeds you leave to them. However, they may owe estate taxes if you leave behind a large enough estate but don’t plan ahead. In general, if you’re leaving behind a taxable estate worth less than a certain amount, your survivors won’t owe estate taxes on a life insurance policy you leave them. But, if you intend to leave an estate larger than that amount, you may want to consider the estate tax consequences of owning life insurance.
Avoiding life insurance-related estate taxes
Make sure that you don’t:
- Own the policy or have any “incidents of ownership” in the policy
- Make the proceeds payable to your estate
- Make the proceeds payable to your personal representative (executor)
- Make the proceeds payable to a beneficiary to satisfy a debt or to pay alimony or support
- Transfer an existing policy to a new owner within three years of your death
How HCI Can Help You with Your Term Life Insurance Needs
- Help guide you through the planning process
- Help you determine how much coverage you need
- Prepare an analysis tailored to your family’s unique needs
- Find the right life insurance carrier that fits your needs