James Flynn Defines Life Insurance in McKinney TX

Common Life Insurance PoliciesMany people have life insurance in McKinney, TX,  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, there are several subgroups.

The 4 Most Common Types of Policies for Life Insurance in McKinney TX 

Term Life Insurance

A term life insurance policy is what most people think of when they think about life insurance McKinney TX agents offer. The concept is simple: the insured buys the policy and names his beneficiaries, and if he dies during the term of the p0olicy (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 in amount as time passes.

Whole Life Insurance

Whole life insurance is a type of permanent life insurance that does not expire after a certain time period as long as the required payments are made. 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 or she is still alive; however, if he or she 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 benefits.

Universal Life Insurance

Universal life insurance is another type of permanent life insurance with the same benefits as whole life but with more flexibility. Universal policies allow the insured to reduce or increase the death benefit and also may allow the insured to choose when to pay premiums and how much to pay. If the insured cannot afford to pay the premiums, they can be paid from the cash value of the policy if it is high enough to cover until the insured can pay again.

Variable Life Insurance

Variable life insurance is also permanent insurance from which the majority of the premiums are invested in various stock funds, mutual funds, bonds or whatever the insured chooses. The returns from the investment accounts are used to fund both the cash value of the policy and the death benefit paid to beneficiaries. This is a high-risk type of policy, as the amount of the benefit and the cash value can drop significantly if the investments under perform.

Anyone seeking to purchase life insurance McKinney TX agencies offer can contact the insurance experts at the James Flynn Insurance Agency to learn which policies would best suit their needs. Call us today at (972) 521-3880 or visit our website at texasinsuranceexperts.com/life-insurance/ for more information.

Life Insurance in McKinney TX
Texas Insurance Expert
7850 Collin McKinney Parkway
McKinney, Texas
(972) 521-3880

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