Life Insurance

Life insurance is protection against financial loss resulting from death. It is an insurance company’s promise to pay your beneficiary a specific amount of money when you die in exchange for timely payment of premiums.

 If you and your family live in Dallas/Fort Worth, TX, get in touch with Costlow Insurance today!

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Life Insurance Information

Why do I need life insurance?

Your ability to earn income is a significant asset, and life insurance helps replace lost income in the event of your premature death. Here are some reasons people buy life insurance:

• To replace income the family would need to maintain their standard of living
• To pay off a mortgage loan & other personal/business debts, or to create a rent fund
•  To create a fund for children’s education
• To pay final expenses, such as funeral costs & taxes
• To create a family emergency fund or a fund for a family member with special needs

 Life Insurance can be the cornerstone of sound financial planning. You can also create a source of savings over time with Whole Life or Permanent Insurance.

What are the principal types of life insurance?

There are two major types of life insurance—term and whole life.

Whole life is sometimes called permanent life insurance. It encompasses several subcategories, including traditional whole life, universal life, variable life, and variable universal life. For more information, check out these life insurance tips! 

Types of Life Insurance

Term Life Insurance

Term Life Insurance is the simplest form of life insurance. It pays only if death occurs during the term of the policy, which is usually from one to 30 years. Most term policies have no other benefit provisions.

There are two basic types of term life insurance policies—level term and decreasing term.

• Level Term means that the death benefit stays the same throughout the duration of the policy.
• Decreasing Term means that the death benefit drops, usually in one-year increments, over the course of the policy’s term.

Whole Life/Permanent Insurance

Whole Life Insurance, or Permanent Insurance, pays a death benefit whenever you die—even if you live to 100!

There are three major types of whole life or permanent life insurance;

• Traditional Whole Life
• Universal Life
• Variable Universal Life

There are variations within each type of insurance.

In the case of traditional whole life, both the death benefit and the premium are designed to stay the same (level) throughout the life of the policy. The cost per $1,000 of benefit increases as the insured person ages, and it obviously gets very high when the insured lives to 80 and beyond.

The life insurance company could charge a premium that increases each year. This can make it very hard for most people to afford life insurance at advanced ages. Companies usually charge a premium that is higher than what’s needed in the early years. That way, the money is invested and used to supplement the level premium later in life.

By law, when these “overpayments” reach a certain amount, they must be available to the policy owner as a cash value if he or she decides not to continue with the original plan. The cash value is an alternative, not an additional, benefit under the policy.

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