Life Insurance Basics for Texas Families

Life insurance is one of those things most people know they should have and few people enjoy thinking about. The good news: the basics are simpler than they seem. This guide covers what you need to know to make a confident decision for your family.

What life insurance does

Life insurance pays a sum of money, called the death benefit, to the people you choose (your beneficiaries) when you die. That money can:

• Replace your income so your family can keep paying bills
• Pay off a mortgage or other debts
• Fund college for your kids
• Cover funeral and final expenses
• Keep a family business running

If anyone depends on your income or the work you do at home, life insurance is worth a look.

The two main types

Term life insurance

Term life covers you for a set period, such as 10, 20 or 30 years. If you die during the term, your beneficiaries get the death benefit. If you outlive the term, coverage ends (some policies let you renew or convert).

Why families choose it: It's usually the most affordable way to get a large amount of coverage during the years your family needs it most, like while kids are at home and the mortgage is big.

Permanent life insurance

Permanent policies, including whole life and universal life, are designed to last your entire life as long as premiums are paid. Many build cash value over time that you may be able to borrow against.

Why people choose it: Lifelong coverage, estate planning, final expenses or leaving a guaranteed inheritance. It costs more than term for the same death benefit.

The Texas Department of Insurance's Life Insurance Guide explains each type in more depth.

How much coverage do you need?

There's no perfect formula, but here's a practical way to think about it. Add up:

1. Income replacement. How many years of your income would your family need?
2. Debts. Your mortgage, car loans, credit cards.
3. Future goals. College costs, childcare.
4. Final expenses. Funeral and medical bills.

Then subtract what you already have: savings, existing life insurance (including coverage through work), and investments.

Many families are surprised to find they need more than the life insurance offered through an employer. Workplace coverage is often a set amount or a small multiple of salary, and it may end if you leave that job.

What affects your price

Life insurance prices are based mainly on:

• Age. The younger you are when you buy, the lower your rate usually is.
• Health. Medical history, current conditions, height and weight.
• Tobacco use. Smokers pay significantly more.
• Lifestyle. Some hobbies and driving records can matter.
• Policy type, amount and term length.

Many policies require a medical exam, while some offer simplified underwriting with health questions only. We can help you find the path that fits.

Choosing beneficiaries

Name a primary beneficiary and a contingent (backup) beneficiary. Keep them up to date after marriage, divorce, the birth of a child or a death in the family.

A note for parents: life insurance companies generally won't pay a large death benefit directly to a minor child. Talk with an estate-planning attorney about setting up a trust or naming a custodian. Texas is a community property state, which can affect ownership and beneficiary decisions for married couples, so it's worth getting advice.

Your rights as a Texas buyer

• Free-look period. Texas gives you a period after you receive your policy (at least 10 days for most life policies) to review it and cancel for a full refund. Read it carefully during that time.
• Check the company and agent. You can verify that an agent is licensed and look up a company's complaint history through the Texas Department of Insurance.
• Replacement rules. If someone suggests replacing an existing policy, compare carefully. A new policy may come with new waiting periods and higher costs.

Lost track of a policy?

If you think a deceased relative had a policy but can't find it, the NAIC's free Life Insurance Policy Locator can help.

Common mistakes to avoid

• Waiting until health changes make coverage harder to get
• Relying only on group life from work
• Forgetting a stay-at-home parent, whose work would be expensive to replace
• Never updating beneficiaries
• Letting a policy lapse by missing payments

Let's make it simple

We're one local agent with access to many carriers, including Farmers and other life insurers, and we've helped Texas families for 25+ years. We'll walk through your needs, compare term and permanent options, and help you pick an amount that fits your budget.

Get a life insurance quote, or call or text (281) 379-5400.

This article is general information, not legal or coverage advice. Your policy wording, carrier and situation decide what's covered. Updated October 2026.

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