Features & Benefits

Term Life Insurance

Term life insurance can be an affordable choice to meet your financial protection needs. A benefit of term life insurance is that it can provide you with the ability to replace lost income upon your death.

 The proceeds from a Term life insurance policy can also be used to replace the income of a deceased primary income earner, fund your child’s projected college tuition, pay off a mortgage, or fund one of your many life priorities in the event of your demise.

 The design of term life insurance is to provide a financial benefit and protection for a specified time period, which can serve as a safety net for your loved ones. 

Life Happens

Lump Sum Benefit

A lump-sum benefit is paid upon your death


Protection for a Fixed Term

Coverage is available from 1  year up to 30 years or more


Replace Lost Income

Avoid family financial distress with a term life policy


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Do I need life insurance?

Use of life insurance should be determined based on your unique individual needs. Life insurance is a good choice if you have family, dependents, or others who rely on you financially. There is no one size fits all formula to determine how much life insurance you need. Your circumstances will dictate what’s right for you. As such, consider your debts, assets, and the amount of income your family must replace, and whether they’ll have bills or other expenses.

How do I get life insurance?

As an independent life insurance agency, Esperson has a convenient process to help you purchase life insurance. This process begins with an initial life insurance quote and continues with an application to your selected insurance company. The decision of which carrier to apply with is yours. Insurance companies use a process called underwriting to decide whether to sell you a policy. Underwriting includes passing a medical exam and answering questions about your health, job, and habits. A life insuance company can refuse to sell you a policy if it considers you a high risk because of your health or other reasons.

How much does life insurance cost?

The cost depends on your specific circumstances. Premiums for Life insurance are based on your age at the purchase of the policy. Premiums can be higher if you’re older or have risk factors. An insurance company can charge you more if you smoke or have risky hobbies like skydiving or rock climbing. The premium associated with the policy you select also depend on the amount of coverage and policy features you choose.

What is term life insurance?

Term life insurance offers protection for a set period of time. This period is called a term. The term can be for one year, or anywhere from five to 30 years or longer. You choose the length of the term. Term life policies pay a lump sum, called a death benefit, to your beneficiaries if you die during the policy’s term. The policy ends at the end of the term, unless you pay to extend it.

Term policies aren’t meant to provide coverage for your entire life. Most people who buy term life policies want coverage for only a time, such as while they’re raising a family or have children in college. 

Premiums will stay the same for the entire term. They’ll go up if you renew at the end of the term. This is because your new premium will be based on your age when you renew, not when you originally bought the policy. To help avoid higher premiums later, consider buying a policy with a longer term.

Most companies offer term life insurance only up to a certain age, usually 70 or 80.

Key features of term life policies

The two most common features of term life policies are convertibility and renewability. They make it easier to get a different type of policy or keep the one you have.

Convertibility lets you exchange your term policy for a permanent life policy without having to take a medical exam or answer questions about your health. This can be helpful if your health gets worse after you buy a term policy.

Converting a policy will raise your premiums. Companies usually allow you to convert term life policies only for a time, typically until you turn 65.

Renewability lets you extend your policy for additional terms, regardless of your health and without having to take a medical exam.

Source: Texas Department of Insurance (2020). Understanding Life Insurance. Retrieved September 03, 2020, from https://www.tdi.texas.gov/pubs/consumer/cb018.html

What is permanent life insurance?

Permanent life insurance lets you build savings over time. You can withdraw from, invest, or borrow against this savings. You can also use it to pay premiums.

A portion of each of your premiums is put into an account, known as the cash value. The cash value grows at either a fixed or variable interest rate. Some policies tie the growth to indexes, such as the S&P 500, or to sub-accounts you choose. The sub-accounts are invested in stocks, bonds, or both. Your cash value could go up or down, depending on the performance of your sub-accounts.

It takes a policy several years to build a cash value. You might have to pay a surrender fee if you withdraw the money early. And if you withdraw more money than you paid in premiums, you’ll probably have to pay taxes on it. If you withdraw the entire cash value, the company might cancel your policy. If that happens, the coverage will end, and it could affect your taxes.

Premiums for permanent life insurance are higher than for term life. That’s because of the savings feature and because you’re buying coverage for a longer period. But if you buy a permanent life policy when you’re young and keep it, your premiums will likely be lower than for a term life policy you buy when you’re middle-aged or older. That’s because premiums are based on your age when you buy the policy.

Types of permanent life insurance

The two most common types of permanent life insurance are whole-life insurance and universal life insurance.

Whole-life insurance stays in effect for your entire life unless you cash the policy in or stop paying premiums.

Some whole-life policies might pay a dividend each year. You can get the dividend in cash, add it to your policy’s cash value, or use it to pay premiums. Dividends aren’t guaranteed. Your dividend could be lower than the company’s projection. Before you buy a policy, ask the company for a history of its projected dividends versus paid dividends.

Universal life insurance stays in effect until the maturity date, which is usually age 95 or 100, as long as you have $1 or more in cash value. At the maturity date, coverage ends and you get the cash value.

Universal life insurance is more flexible than whole life. You can change the amount of your premiums and death benefit. But any changes you make could affect how long your coverage lasts. If your premiums are lower than the cost of insurance, the difference is taken from the cash value. If the cash value reaches zero, your policy could lapse.

The company will send you a report each year showing your cash value and how long the policy might last. The estimate is based on the cash value amount, the cost of insurance, and other factors. Review it carefully. You might need to pay more in premiums to keep the policy in effect until the maturity date.

Most universal life policies earn a guaranteed minimum interest rate on the cash value. Variable universal life policies depend on the performance of the sub-accounts you choose. Agents who sell variable life insurance in Texas must have a federal securities license and a state insurance license.

Some universal life policies have a no-lapse guarantee. If your premium payments aren’t enough to cover the cost of insurance, the no-lapse guarantee keeps the policy in effect. You must pay your premiums on time for the guarantee to apply.

Source: Texas Department of Insurance (2020). Understanding Life Insurance. Retrieved September 03, 2020, from https://www.tdi.texas.gov/pubs/consumer/cb018.html

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