Best Life Insurance in Texas 2021

Last modified: February 16, 2021

Many people wonder if life insurance is worth it. Well, truth be told, it definitely is, especially if there are other people financially relying on you.

It simply acts as a safety net in financial terms and provides coverage for a lot of things at affordable prices.

If you happen to be living in a state like Texas, you will find many options of Texas life insurance providers with different types of insurance plans and coverage.

Texas is among the largest states in the U.S area-wise, and if you were to compare it to other states in terms of living standards, you would find that it is much more affordable, especially when compared to a state like California.

Every Texas life insurance company offers different types of policies and plans for people in the state.

In this article, we will discuss everything about life insurance in Texas, including a review of the top insurance companies in the state to help you find the best life insurance in Texas.

Life Insurance Facts

When looking at Texas life insurance policy, it is best to know about life expectancy in Texas based on gender and how it compares to other states.

Overall life expectancy in Texas is 78.5 years, according to which, a child born on Jan. 1, 2019, in Texas can expect to live until 2097.

Take a look at some key life insurance facts in Texas:

  • Texas life expectancy (males): 76.1 years
  • Texas life expectancy (females): 80.9 years
  • Percentage of the adult population with life insurance in 2019: 57%
  • State rank for life expectancy: 30

Average Cost of Life Insurance

The average cost of life insurance depends on your individual profile and the type of policy you choose to get.

There are many other factors as well that influence the price you pay for life insurance, such as your age, gender, and insurance type.

On average, though, Texas life insurance cost rate is $26 a month. This number is based on an example of a 40-year-old buying a 20-year term life policy.

Important Factors to Consider When Looking for Insurance In Texas

When buying life insurance, it’s important for one to consider many factors, as it certainly isn’t an overnight decision.

From the insurance company or provider’s reputation to their financial standing, there are many life insurance factors that affect premiums and play an important role in your final decision.

Here are some factors that you need to consider when looking for insurance in Texas:

  • Texas life insurance company rating
  • Third-party ratings of the company
  • The company’s paying ability and its financial stability
  • The types of policies and coverage the company has to offer

Furthermore, you also need to know that there are several factors that can impact your policy, such as:

  • Your age
  • Your family history
  • Lifestyle
  • Overall health

These are a few Texas insurance requirements considered mandatory before a life insurance policy.

Returning Period for Insurance Policy In Texas

Before you buy life insurance, it is very important for you to know Texas insurance laws and regulations so that you are able to make a well-informed decision.

Here are a few things you ought to know about Texas life insurance.

If You Miss A Payment, You Don’t Lose Coverage

In Texas, an individual life insurance policy is required to have a grace period of 31 days, which applies after the due date of your premium. In case you miss a payment, you won’t be charged and will still receive coverage. And, if you happen to die during the grace period, your beneficiary will receive the death benefit minus the past due premium.

A Lapsed Policy Can be Reinstated

Your insurance policy is likely to lapse if you don’t pay your premium. But, if you wish to reinstate a lapsed policy, you will have to pay the past premium that is due, along with interest.

If, for instance, if you happened to take a loan against the value of your cash during the time when the policy lapsed, you will be required to pay the unpaid interest as well as return the loan.

Many insurance companies in Texas are likely to reinstate a policy within a period of 5 years.

Insurance Companies Aren’t Eligible to Contest Claim Payment After 2 Years

Most life insurance companies come with a two-year contestable period. What this means is that if you die within the contestable period, the company will first review your application as well as look into the cause of death.

On the other hand, if you buy the insurance policy and die after two years, the company has to pay the death benefit. They can only deny or refuse payment if you’ve made a false statement, haven’t paid your premium, or withheld any important information.

Insurance Companies Have to Pay Claims Promptly

Insurance companies are required to pay the beneficiary within two months of verifying their identity and receiving proof of death.

In the case of an individual life policy, the company has to pay interest on a death benefit, which applies from the time it receives the statement on proof of loss to the time that it accepts the claim.

What Happens In the Case of An Unclaimed Policy?

In Texas, proceeds from an unclaimed life insurance policy are generally considered to be “due and payable” when the insured reaches the “limiting age.” This is usually well above 100. But, if the policy is still unclaimed after three years, it’s eventually considered to be abandoned.

As per state laws on Texas life insurance claim time, all abandoned funds should be reported to the state as unclaimed property.

When it comes to the subject of beneficiaries, many life insurance cases involve disputes regarding who should receive the benefits.

According to Texas life insurance beneficiary law, the beneficiary isn’t determined by an individual’s will.

The person buying the policy is the one who names who will benefit from the policy, and this is usually mentioned in the insurance contract. Minors aside, insurers don’t have any set rules or regulations with regards to who you name as a beneficiary

However, the designated beneficiary may be challenged for various reasons, such as:

  • Failure to provide a satisfactory designation
  • Unclear designation
  • A designation in favor of an ex-spouse may be deemed invalid
  • The beneficiary may have led to the death of the insured
  • The designation may be in violation of a court order or a court decree
  • The designation’s attempt to transfer community property assets

Leading Causes of Death In Texas

When you talk about life insurance, it is important to consider the common causes of death in Texas.

Ranked by frequency, here are the leading causes of death in Texas:

  • Heart disease
  • Cancer
  • Stroke
  • Accidents
  • Chronic lower respiratory disease
  • Alzheimer’s disease
  • Diabetes
  • Septicemia
  • Kidney disease
  • Chronic liver disease/cirrhosis

What If Life Insurance Company Goes Bankrupt?

When buying life insurance, many people often wonder, what if the life insurance company goes bankrupt?

Texas department of insurance says that if an insurance company goes bankrupt, all current policy claims will be covered, the insurance coverage will continue, and the state will pay it.

In the case that an insurance company finds itself in a situation where it is declared insolvent, the state guaranty fund swing and guaranty association effectively take action. The association will either continue providing coverage itself for policyholders or it might transfer the individual’s policies to another insurance company.

Best Insurance Companies In Texas

AAA Life Insurance

AAA life insurance Texas takes great pride in the fact it offers competitive premium rates, the number of claims it has paid as well as its extensive customer base.

It has more than 1,300,000 active policies and an AM Best rating of A (Excellent) as of August 2020. This goes to show its financial strength and the overall positive outlook the company enjoys. 

It offers the following policies:

  • Term Life Insurance
  • Whole Life Insurance
  • Universal Life Insurance

Term Life Insurance

This policy covers a 10 to 30-year period, in which your monthly and annual premiums tend to remain the same.

Whole Life Insurance

This is also known as ‘permanent insurance’ that offers death benefit coverage for the policy owner throughout their life.

Universal Life Insurance

This is also a permanent insurance option, except that it offers a few flexible features.

In a nutshell, AAA insurance company in Texas is extremely renowned for their exceptional customer service as well as their policies and discounts for seniors and families.

AARP

AARP whole life insurance Texas is notably one of the best insurance providers for seniors with three types of policies that include:

  • Level benefits term life insurance
  • Permanent life insurance
  • Easy acceptance life insurance

Level Benefits Term Life Insurance

  • Protection Amount: $10,000 to $100,000 in protection
  • Coverage Period: can last to age 80
  • Rates: Affordable initial premiums that can possibly increase over time
  • No Medical Exam: you can get accepted based on your answers to health questions plus other relevant information you provide.

Permanent Life Insurance

  • Protection Amount: Up to $50,000 in protection
  • Coverage Period: can last your entire life
  • Rates: fixed rates that don’t increase
  • No Medical Exam: depends on your answers to health questions as well as other information

Easy Acceptance Life Insurance

  • Protection Amount: Up to $25,000 in protection; first 2 years provide limited benefit
  • Coverage Period: can last your entire life
  •  Rates: fixed rates that aren’t likely to increase
  •  No Medical Exam: includes a simple health question

Bestow Life Insurance

Bestow insurance Texas is an A+ rated insurer and is surely one of the most trusted names when it comes to life insurance.

It only offers term life insurance, which makes things a lot easier and simpler for people.

At the time of writing this article, Bestow offers quotes for 2, 10, and 20-year term life insurance policies. The coverage available on the company’s life insurance policies ranges from as little as $50 and goes up to $1,000,000.

The cost of Bestow’s insurance policies varies according to different factors. While there are obviously more factors such as:

  • Gender
  • Age
  • Height
  • Weight
  • Health history
  • Term length selected
  • Coverage amount selected

Some of its plus sides include easy application, no medical exam, and zero commission.

Prudential Life Insurance

Prudential insurance Texas is yet another name that deserves a mention when you talk about Texas Life Insurance. This company aims to give you peace of mind and the ability to plan today for the uncertainties of tomorrow.

The policies offered by this company include:

  • Term Life insurance
  • Universal life insurance
  • Indexed universal life insurance
  • Variable universal life insurance

The company is best known for offering multiple universal policies, having robust online tools and resources, whereas some downsides are that it requires medical history and doesn’t provide online quotes for some of its policies.

AIG Life Insurance

American International Group or AIG insurance Texas has unique coverage options with customizable policies that cater to almost every financial situation.

It offers the following policies:

  • Term Life Insurance
  • Universal Life Insurance
  • Guaranteed Issue Whole Life Insurance

Term Life Insurance

The policies at AIG have a minimum face value of $50,000, but if your coverage gets approved, you can purchase up to $10 million in coverage.

It offers the following benefits:

  • Buy only what you need – this comprises of 18 term durations that give you an option to change the amount of coverage according to the duration that you need it for.
  • Convert your policy – If you need to change your policy, you can get them converted to permanent insurance.
  • Protection for multiple needs – this provides solutions for single parents and many options for business owners.

Universal Life Insurance

You will find a variety of factors here, including:

  • Index universal life
  • Variable universal life
  • Guaranteed universal life

Guaranteed Issue Whole Life Insurance

This includes the following benefits:

  • Affordable life insurance
  • Guaranteed acceptance
  • Permanent protection

State Farm Texas Life Insurance

When looking at life insurance options, State Farm Insurance Texas surely deserves a mention.

It offers an extensive range of life insurance products and a no-exam option, which is of great help for those looking for quick policy issuance.

It offers the following policies:

  • Term Life Insurance
  • Whole Life Insurance
  • Universal Life Insurance

Term Life Insurance

This policy gives death protection for a fixed period of time and has proven to be an affordable option for many families. It further offers three different products:

  • Select Term: You can choose a 10-year, 20-year, or 30-year term, with the coverage starting at $100,000. Your premium is level in Select Term, which means that the overall costs can increase.
  • Return of Premium Term: You can choose an initial term of 20 or 30 years in this product. Also, the premiums are returned to you in the end, given that you outlive the initial insurance term and pay all your premiums.
  • Instant Answer Term: This is open to people aged 16 to 45, and it offers coverage until age 50. It offers $50,000 in death benefits without requiring a medical exam.

Whole Life Insurance

This offers the following:

  • Whole Life:  guaranteed lifetime coverage with same premiums 
  • Limited Pay Whole Life:  you only pay premiums for 10, 15, or 20 years. After that, you will have coverage without having to pay premiums. 
  • Single Premium Whole Life: you only make one premium payment, without any additional payments. 
  • Final Expense: here, you are entitled to receive $10,000 in coverage for your burial expenses. Premiums are level and can be paid beyond age 100. 

Universal Life Insurance

State Farm Insurance Texas has three universal life insurance options: 

  • Universal Life: this is available to people between the ages of 0 and 85. The coverage starts at $25,000. The coverage and premiums are adjustable. It allows you to choose a death benefit equal to your basic amount of life insurance, or if you want, you can opt to receive a death benefit that equals your account value. 
  • Survivorship Universal Life: this covers two people with coverage starting at $250,000. It pays benefits only after both individuals have passed away.

Joint Universal Life

This offers coverage to two people at a lower cost as compared to purchasing two separate policies. Coverage starts at $100,000.  In this option, the death benefit is paid to the beneficiaries after the death of the first insured.

Pros & Cons

The Pros

The Cons

Final Verdict

FAQs

What kind of insurance companies are in Texas?

There are many different insurance companies in Texas, each with its own unique policies and coverage options.

What is the best age for life insurance?

Your 20s and 30s are the best ages for life insurance because that’s when you are likely to get the best rates.

Who has the cheapest insurance in Texas?

There are many cheap life insurance options in Texas, but the final cost eventually depends on your unique profile and the type of policy you choose.

Do you have to have full coverage in Texas?

No, you don’t, since there are different types of options, some of which don’t offer full coverage.