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Among the various types of term policies available, a Houston TX decreasing term policy can be helpful in specific situations. It might not be the most versatile, but it may be an option for you if you have a particular scenario you want to protect.
As mentioned earlier, there are several types of term life insurance. From decreasing term policies to level term plans to convertible plans, they range over many benefits. Choosing which is the best for you depends on several factors. These factors can vary from your age, current situation, health and family medical history, what you want protection for, and how long you want coverage.
After assessing those factors, you may need to speak with an insurance agent to understand the best option for you. You can ask an expert with Best Life Insurance Houston Agency regarding the best insurance choices for you.
Houston TX Decreasing Term Policy
As stated earlier, decreasing term policies offer a different benefit than the usual term life plan. As it’s a term life policy, it’ll still only last for a certain period. This period could go for anywhere between 10 to 30 years.
The premium amounts will also remain level throughout the policy’s lifespan. The amount you pay will stay the same.
However, unlike other term life policies, decreasing term policies’ death benefit amounts will drop through the duration of the policy. The amount will start higher than average and gradually decreases at predetermined regular intervals. By the end of the policy, only a portion will remain or none at all.
You may ask, “what’s the point of that, then?” This type of plan is helpful if you want protection for specific investments or debts. If you have a mortgage or credit debt, you may want to get life insurance, so your dependents can settle it if you die before paying it off.
How would that work? You’ll usually have the option to match your mortgage or debt amounts to the decreases in your policy’s death benefits. That way, as your death benefits lower, so will the amount of your mortgage or debt.
If everything goes well, you’ll pay off your debts without any problems, and you can let the term policy expire. On the off chance, if you die before paying off everything, then your dependents can use the death benefits to pay off the remaining debt.
A Regular Term Life Insurance Policy
Before explaining what decreasing term policies are, you need to understand what term life insurance is. Term life insurance is the simplest to comprehend among the different types of life insurance. It is temporary life insurance that only lasts for a period, a term if you will. This period could be anywhere from a year to a few decades.
It is one of the most affordable types of insurance. It’s much cheaper than permanent life insurance since it only covers a portion of time and doesn’t last a lifetime. If you want sufficient coverage for a reasonable price and don’t mind that it won’t last, then term life insurance is a viable option.
However, despite its perks, there are downsides. Because it’s so cheap, it doesn’t offer any additional benefits that permanent life insurance usually has. Besides the guaranteed death benefit, you won’t get much else. Not to mention, if anything happens outside of the coverage period, your dependents won’t receive the payout.
But that description is the general gist of how typical term policies operate. There are specific term life policies that offer you several other options that may better fit what you’re looking for. Some of the various types include level, increasing, decreasing, convertible, and renewable term insurance.
Level, increasing, and decreasing term policies offer different benefit levels in addition to the usual term policy characteristics. On the other hand, convertible and renewable term insurance are options on what you can do before your term policy expires.
The Pros And Cons Of Decreasing Term Policies
There aren’t very many distinct advantages with a Houston TX decreasing term policy. Decreasing term policies are usually only practical if you’re in one of two or three situations. If you’re not in a situation that calls for it, you may be better off getting the regular type of term life policy.
Of course, the example used earlier was for paying off debts. There is specific insurance called mortgage life insurance. It works similarly to decreasing term policies, but you name your mortgage lender as your beneficiary instead of your family members. It isn’t the most fantastic feeling knowing your family won’t be left with anything.
So, although decreasing term policies work similarly, the money may still go to them instead. Granted, in the end, the bank may take the money anyway. But on the off chance that you are ahead on your mortgage payments, the rest of the money would go to your family.
Another reason to get decreasing term policies is that it doesn’t require a medical exam to apply. There’s no need for either the questionnaire or the exam. This policy is one way to get life insurance quickly if you’re in a tight situation, but other types won’t protect you fast enough.
Compared to other term life policies, it is one of the more expensive ones. Since it doesn’t require you to go through the medical exam, the insurance company has to consider that risk factor. Not to mention, you pay the same premium throughout the policy.
Usually, that would be great, but not in the case where your death benefits are decreasing. By the end of the term, you would be paying for more than what your protection is worth.
Would This Type Of Insurance Be Good For You?
As stated before, unless your situation falls into a few cases, you would probably be better off getting a regular type of term life insurance. If you think that this type of insurance is for you, you should first discuss it with an insurance agent. Contact us for more information!
Any of the experts with Best Life Insurance Houston Agency will be happy to answer any questions you have regarding a Houston TX decreasing term policy that suits you.
Houston, TX Fun Facts:
- Texas A&M buries its canine mascots in the Reveille Mascot Cemetery.
- Every night 250,000 Mexican free-tailed bats come out from under Waugh Drive Bridge to hunt for mosquitos.
- The Viet Hoa supermarket offers a massive collection of hard-to-find International foods, including…live frogs?
- For more fun facts, visit the official website.