Houston TX Decreasing Term Insurance

One of the types of term life policies is Houston TX decreasing term insurance. Overall, term life insurance is simple to understand. It gives you coverage for a limited amount of time and is one of the most affordable plans. On the other hand, it doesn’t have other benefits besides the guaranteed death benefit. 

If you’re leaning towards choosing term life insurance, you should understand the different types of term life policies. A few available options are level term, decreasing term, increasing term, convertible term, and renewable term. Some of these options can overlap; others will make the policy operate differently from other term policies.

Regardless of your choice, it would be best if you sat down with an insurance agent to make sure you’ve seen all your options. Contact the experts with Best Life Insurance Houston Agency if you have any questions.

Houston TX Decreasing Term Insurance

Considering they’re just different varieties of term insurance, all the various policies share specific characteristics. All term life policies provide protection for a limited amount of time, a term if you will. If you die during the term, your dependents will receive the payout tax-free. If you die after the term expires, no money is received.

However, the different variations are what can change these general guarantees a better fit for you. Level term, decreasing term, and increasing term provide various benefits throughout the policy’s lifespan. Renewable and convertible term policies give you options on what to do after the policy expires.

Each one has its quirks. You should assess which options are best for you and your family. 

Term Life Insurance More in Depth

Decreasing term insurance is a common type of term insurance. As stated before, decreasing term insurance is a type of policy that provides a different benefit level through the policy’s duration. Usually, these policies’ terms can range from between a year to 30 years.

At the start of the policy, the death benefits start at a higher level. It’ll decrease gradually over the policy’s lifespan, following a schedule made by the insurer. Some policies will reduce every month; others may do so every year. 

Usually, you’ll also have level premiums throughout the term. That is, your premium payments will remain the same. So, in the end, you’ll be paying more money for less coverage the closer you get to the end of the term.

That’s why this policy is one of the most expensive types of term insurance. Not to mention, it has no medical requirements. You can apply without worrying about answering a medical questionnaire or going through an examination. Of course, bypassing that is one of the reasons why it’s expensive, to begin with.

Here’s an example. You buy a 30-year decreasing term policy with an initial value of a hundred thousand or so. Throughout the term, your premium stays the same. The death benefit will usually match the policy’s initial value.

As the 30 years pass, the death benefit amount will gradually drop. By the end of the term, your death benefit will be significantly lower. Perhaps only a few thousand or so. If you died during those 30 years, your dependents would only receive whatever the policy is worth at the time of your death. 

What is decreasing term insurance used for?

Decreasing term insurance was created with the idea that your need for coverage will decrease over time. 

Often enough, people choose decreasing term insurance to cover credit debt or mortgage. The idea is that your dependents will use the death benefits to pay off the debt if you pass away before paying it off. Since, theoretically, the debt’s balance will decrease over time, and decreasing term’s death benefits are also lowering.

That’s why the most common form of decreasing term insurance is mortgage life insurance. It’s for people who want to protect their investments. Unfortunately, only a handful of life insurance companies offer decreasing term plans.

The Advantages And Disadvantages

Despite it being one of the pricier types of term insurance, it is still cheaper than other types of life insurance. Permanent life insurance plans may offer cash value with similar death benefits, but they also have higher premiums and costs.

You won’t need to go through the medical questions other insurance plans require most of the time. You’ll be able to apply even if you have severe health issues that bar you from most other types of insurance.

In most cases, you’ll be able to match the death benefits to your mortgage balance. That way, your death benefit can cover the amount you have left if you pass away before paying it off.

Unlike specific policies created for mortgage payments, decreasing life insurance doesn’t necessarily need to name the mortgage lender as a beneficiary. Your family may still receive the payout amount. Of course, there’s still a chance it’ll go to the bank, but at least your family will be able to allocate it themselves.

The most significant disadvantage of decreasing term insurance is the most obvious one. By the end of the term, you’ll be paying more than the benefits you’re receiving. Granted, the premium is usually less than standard term insurance policies with level death benefits. 

What is decreasing term insurance used for?

Houston TX Decreasing Term Insurance was created with the idea that your need for coverage will decrease over time. 

Often enough, people choose decreasing term insurance to cover credit debt or mortgage. The idea is that your dependents will use the death benefits to pay off the debt if you pass away before paying it off. Since, theoretically, the debt’s balance will decrease over time, and decreasing term’s death benefits are also lowering.

That’s why the most common form of decreasing term insurance is mortgage life insurance. It’s for people who want to protect their investments. Unfortunately, only a handful of life insurance companies offer decreasing term plans.

Is decreasing term insurance the right plan for you?

There are several reasons you could decide on decreasing term insurance. Of course, the most common cause is to cover your mortgage payments in case of your death. Perhaps you wanted a policy that lowered as you pay off your debts and your children grow up and move out. Or maybe you have serious medical issues and want a policy that doesn’t require a medical exam to purchase.

Any of these reasons could make decreasing term insurance a viable option for you. Before you settle on a decision, however, you should sit down with an insurance agent. Any of the experts with Best Life Insurance Houston Agency can show you all of your options. Contact us if you have questions about Houston TX decreasing term insurance plans that could work for you.

Houston, TX Fun Facts:

• Texas A&M buries its canine mascots in the Reveille Mascot Cemetery.
• Many Houstonians unwittingly drive over the Donnellan Crypt, which was once filled with dead members of the Donnellan family. Now empty, it sits underneath the Franklin Ave. bridge.
• The scale replicas of the Chinese tomb warriors that used to line the Forbidden Gardens were sold off for $100 each.
• For more fun facts, visit the official website!