Insurance and Finance

Everything You Need to Know About Life Insurance

By JENNIFER CHAPPELL SMITH 9.2.15

Living Through the Loss

Young West Texas newlyweds bought a life insurance policy they hoped they’d never need. But by their 30s, the coverage proved priceless.

The morning Catalina Jones’ husband died resembled any other spring day in Snyder, Texas. A Texas Farm Bureau member and self-employed carpenter, Allan, 35, drove off to a job site — leaving Catalina, 32, home with their three young children. “Within 15 minutes, he was gone,” she says.

A college student had crashed into Allan’s car, and the man Catalina had known since she was 15 years old died. Allan’s best friend, a firefighter and first responder to the scene, soon alerted the Jones’ pastor, who knocked on Catalina’s door to break the news.

In addition to the shock and overwhelming grief of losing her husband, she also had to consider the future. “The first thing that came to mind was that I had no job,” she says, though she was close to graduating with an associate degree in business.

“With [Allan] being self-employed, money stopped immediately. All work stopped,” she says. “I was just wondering: ‘What was I going to do? Where would I start?’”

Back on Her Feet

How did Catalina keep her family afloat in the meantime? Family and faith helped. Her father-in-law finished one of Allan’s jobs and gave her the money he earned, and the church helped financially, too, she says.

But the biggest financial assistance came in the form of the benefit from Allan’s life insurance policy. It was just enough to put the young family in a position to move forward. “It covered burial expenses. I paid off our mortgage. I was able to pay off the one vehicle I still had. I was able to stay at home for a few months before I did have to go to work,” Catalina says.

Saving Grace

As young as the West Texas couple had been when they married — Catalina, 17, and Allan, 20 — they had purchased life insurance right away. “We knew it was important. We were covered,” she says.

Without the policy, Catalina’s road to financial recovery could have proven treacherous. “I would have lost my home and our vehicle,” Catalina says. “I don’t know what I would have done.”

And she didn’t wait too long after Allan’s death to increase the coverage on her own life policy to protect her children. “I wanted to be sure our kids are covered,” Catalina says.

Moving On

Six weeks after Allan’s funeral, Catalina graduated and took a job with the local chamber of commerce. Since then, she’s worked in various roles at her local school district.

And Catalina found love again. She married her new husband, Jeff, in 2014. And her children, Kalysta, 15, Paxton, 13, and Kambry, 10, are surrounded by a loving family as they go to school, grow, and imagine their own futures.

Their mom and stepdad’s life insurance policies help make this possible by protecting them against the unexpected.

Excuses, Excuses

We debunk the most common misconceptions about buying life insurance.

People give many reasons for putting off life insurance. After all, it’s not something most want to think about.

But Texas Farm Bureau Insurance agency manager John Hendrick in Comal County takes it to heart when a member dies unexpectedly without coverage. That’s why he does his best to convince members to face life-and- death realities and protect their families before it’s too late. “That’s my job,” he says. Hendrick tells of a member who took a few months to get information together for a life insurance policy he never bought. A four-wheeler accident left him in a coma. “Now, you think that doesn’t keep me awake at night?” Hendrick asks.

He and his fellow agents don’t want to tell such stories, so they have ready responses for the most common reasons people give for not getting enough life coverage.

Have you ever uttered any of these phrases?

“It’s too expensive.”

The biggest objection, by far, is the expense. But according to the 2015 Insurance Barometer Study released by LIMRA and the nonprofit Life Happens, 80 percent of consumers misjudge the price for term life insurance. They think coverage costs three times as much as it actually does, says another LIMRA survey. “People can’t afford not to have a house or a $15,000 travel trailer insured, and the bank makes them if they have a loan,” Hendrick says. “They’ll pay for insurance on a 15-year-old car or a horse. But when it comes to protecting their incomes if something happens to them, they hesitate to spend pennies on the dollar to insure their lives.” He just doesn’t understand that thought process.

One estimate shows a healthy 25-year-old male who doesn’t use tobacco getting a 20-year, $1 million term policy for just $37 a month.

Term policies generally cost much less than whole-life policies — also called permanent insurance. And you have options that can keep costs low. These include converting a term policy to whole-life down the road, when you may be more able to afford the higher premiums. Or choosing a modified premium on whole life, which means you pay less for premiums for a decade before they rise along with your income.

Toby Brooks, a Texas Farm Bureau Insurance Agent in Bell County, looks for savings on home or auto insurance and helps members apply it to new life coverage. “We look within the budget to find a way to make it affordable,” Brooks says.

“I’m covered at work.”

A valid point. But if you lose your job or move to a different company with different benefits, you leave your family at risk.

“Sure, you’ll be covered three or four years while you’re in your job. But later, life insurance will be more expensive,” says Jay Hawley, a Texas Farm Bureau Insurance Agent in Harris County. Putting a policy in place that’s separate from any employee coverage makes sense.

“I’m young, single, and have no kids.”

Young people tend to feel invincible. And they usually don’t have much income. But who will pay your debt when you’re gone? Not to mention burial costs. Life insurance can help.

The biggest reason to buy young? You’ll never get better rates than today. “Why pay more down the road? Lock the rate in now,” says Hawley.

He notes young people can convert affordable term policies to permanent life policies later without having to complete the medical exam. So signing up for coverage now essentially may mean that you’re insurable for the rest of your life.

“I’m afraid of the medical exam.”

Why turn down a free medical review? You may catch ailments before they get serious. “The medical exam can alert you to something,” Hawley says.

“I may never use it.”

“That’s the only policy I’m guaranteed to pay out on,” counters Hendrick.

You may never make a claim on your auto or homeowners policy. But when you die, a beneficiary — someone you love — will receive the money the policy must pay.

Coverage and discounts are subject to qualifications and policy terms and may vary by situation. Life insurance products are offered through Southern Farm Bureau Life Insurance Company. 

© 2015 Texas Farm Bureau Insurance