A Guide to Life Insurance in Texas (TX)

When digging into getting Texas Life Insurance Quotes that are right for you and your family it is important to consider several different options.  These can be state specific to getting life insurance in Texas, but they can also simply be a reflection of the way that you should approach buying life insurance in general.

In this article I am going to talk about both of those different factors, as well as provide an overview of the life insurance industry in Texas as a whole and the role that it plays in the economy of the state.

To get started let’s take a look at a little background information about Texas.

(If you would like to get some Texas Life Insurance Quotes right now, then simply put your zipcode in the box above, click Start, and then choose from the specially selected companies for a free, instant, TX Life Insurance Quote.)

Texas – A Little Background…

Texas is a monster state in both physical size terms and in the amount of people it holds, sitting as the second largest in the United States on both counts. Texas occupies a physical space of 268,581 square meters (approximately 773 miles wide by 790 miles long), and had a population of 25,145,561 people according to the 2010 US Census.

The Capital of Texas is Austin, which had a city population of 790,390 people, and a metropolitan population of 1,716,291 in 2010.

It is the headquarters for such notable Fortune 500 companies as Dell and Freescale Semiconductor; with the state legislature actively trying to promote the live band culture of the city with the nickname, “The Live Music Capital of the World”.

The largest city in Texas is Houston, which had a city population of 2,099,451 and a metropolitan population of 6,108,060 in 2010, and is the fourth largest city in the United States behind Chicago (3rd), Los Angeles (2nd) and New York (1st).

In fact, six of the top twenty most populated cities in the United States are to be found in Texas, the most of any state, and reflective of quite how many big cities Texas has.

In economic terms Texas is also a monster, with a state GDP second only to that of California, at $1.153 trillion in 2010.  To get that number into some perspective consider the following facts:

  • $1.153 trillion is greater than the COMBINED GDP of the seventeen US states with the lowest state GDPs in 2010.
  • $1.153 trillion is greater than the COMBINED GDP of Turkey ($741 billion) and Argentina ($370.27 billion)
  • $1.153 trillion is greater than the GDP of Mexico which Texas borders ($1.039 trillion)

And Texas is also home to 57 of the Fortune 500 companies, a number it shares with California.
Many sectors thrive in Texas including the petroleum industry, computing, electronics, aerospace, technology and finance in addition to the cattle and cowboy image that are often associated with Texas.


Texas Life Insurance – The Facts About TX Life Insurance

There are 574 Texas Life Insurance Companies who are licensed to sell life insurance in Texas, and of these 127 are actually domiciled in the state.

As you might expect from such a huge state, the amount of people employed by the life insurance sector in Texas is also huge with 60,000 people directly employed by life insurance companies in Texas, and a further 85,000 non-insurance jobs supported by the sector.

The residents of Texas own 11 million individual life insurance policies, and on average each policyholder has $110,000 worth of cover each according to the American Council of Life Insurers.

Group Texas Life Insurance alone amounts to $800 billion, and Texans cumulatively have over $2 trillion in death benefit cover.

If we look at just a years’ worth of premiums, then we can see that $130 billion of individual life insurance cover was purchased in Texas in 2009.

When you look at what all of this cover has meant on the ground to the Texas economy then we see that $20 billion was paid out in policy dividends, matured endowments, death benefits and policy dividends in 2009; and a further $4 billion in annuity benefits.

When you look at that figure of $24 billion against the fact that the entire GDP of the state of Vermont in 2010 was only $26.4 billion, you start to get an idea of the massive amounts of money that are involved with Texas Life Insurance.


The Top Ten Life Insurance Companies in Texas

It is interesting to consider the largest life insurance companies in Texas to get a feel for the market and the companies in it, so here is a list of the Top Ten Texas life Insurance Companies in 2009 based on the written life insurance premiums.

I have also posted the % of Market Share figure next to the premium, and it is interesting to note that despite the massive numbers involved (over $3 trillion), that these top ten companies only accounted for about a third (35.9% to be exact) of life insurance sales in Texas in 2009.

1/ Metropolitan Life Insurance Company         593,554,831       6.69%
2/ Northwestern Mutual Life Insurance Company  403,663,053   4.55%
3/ Lincoln National Life Insurance Company     359,937,418       4.06%
4/ New York Life Insurance Company     336,055,672       3.79%
5/ State Farm Life Insurance Company   293,318,260       3.31%
6/ Prudential Insurance Company of America   287,135,882       3.24%
7/ John Hancock Life Insurance Company       274,052,469       3.09%
8/ American General Life Insurance Company 241,490,051       2.72%
9/ Massachusetts Mutual Life Insurance Company 218,128,532   2.46%
10/ Transamerica Life Insurance Company      176,039,693       1.99%

Three Key Points To Consider With Texas Life Insurance

1/ There is more than one type…

It is important to realise that there is more than one type of life insurance and that it is important to choose the one that is best for your particular circumstances.

The two main types of life insurance are:

Term Life Insurance – This is generally the cheapest way to get covered and in terms of death benefits will usually offer you the greatest bang for your buck. It does not however have a savings element, and because it is for a specified period of time, if you suffer health problems in the future, or simply need to get a new life insurance policy as you get older (perhaps to replace the old one), then you may find that it may end up costing you more money.

Whole Life Insurance – This DOES have a savings element, and so you can foreseeably see a return on your money before you die. However, it is likely to be considerably more expensive then term life insurance, and you may have to spend out much more money in monthly premiums to end up with the same amount of death cover as you could have got with term life insurance. Additionally, the annuity element is dependent on the life insurance company investing your money well, and hence there are no guarantees, just projections which may, or may not end up being accurate.

2/ You may need more than you think…

It is quite common for people to end up getting less life insurance than they really need. This is understandable, because in most cases (especially true of term life insurance), people are balancing up the cost of the premiums against the fact that they are hedging against a future payment that they will never see.

So often they cut corners and get less than they really need.

Remember, at the end of the day it is your family who will end up suffering if you don’t get enough life insurance, so really sit down and work out some firm figures about how much life insurance you really need.

A good rule of thumb is at least a couple of years’ worth of expenses (although some financial experts recommend much more).

3/ Compare a few Texas Life Insurance Quotes to get the best deal…

It is tempting with something like Life Insurance to buy the first policy that you see, both because it is a little uncomfortable to think about our own demise, and also because it is easy to come up with fake justifications for our brevity of research.

All policies are the same…
It’s easy to change later…
It’s just a safety net anyway…
etc etc

Being just three of many excuses that you could come up with.

In actuality though, there can be considerable differences between life insurance policies both in their terms and conditions and in their prices, so it is well worth comparing a few before actually buying a Texas Life Insurance Policy.

And if you already have Texas Auto Insurance or Texas Motorcycle Insurance with another company, then it is a good idea to phone them up or email them and see if you can get a discount on your life insurance policy because you are bringing them more insurance business (and you will also have a track record of regular payments etc that makes you a better candidate).

Remember also that under state law there is a ‘Free Look’ provision that allows you a minimum of ten days (and up to 30 days) to review a life policy even after you have bought it. So you can read your policy document through carefully, and if you still end up having issues with it, then you are able to cancel it without penalty.

Make sure that you do read the policy carefully.

Additionally, it is also a good idea to get new TX Life Quotes every few years simply to check that you are still getting the best deal possible.

If you aren’t, then investigate the possibility to change, but remember to take into account any financial penalties that you may end up suffering in order to do so.

Weigh up all the different factors, and act accordingly.


Texas Life Insurance – The Details…

When assessing life insurance in Texas it is important to understand the rules and regulations under which it is administered. These rules are called The State Insurance Code of Texas, and establish the framework under which the laws are dealt with.

You can find a list of the Texas Insurance Rules here:



Texas Life Insurance Resources

Texas Department of Insurance

It is the Texas Insurance Department which deals with administering the above rules. It handles all insurance operations in Texas from the viewpoint of consumers, insurance professionals in the state, and Texas Insurance Companies.

The Texas Department of Insurances website is one of the more useful of the different state insurance department websites, with lots of practical information such as the ability to check an insurance professionals credentials, and also to check that a Texas Life Insurance Company is properly licensed to sell life insurance in Texas.


Texas Life, Accident, Health & Hospital Service Insurance Guaranty Association

This body may have one of the lengthiest and slightly ridiculous names you have ever heard, but it does serve a very serious purpose. In the event that any insurance companiy in Texas who sells any of those types of insurance (life, accident, health or hospital servioce insurance) to Texas residents becomes insolvent, then it is this body which will step in to provide statutory protections to Texan Policyholders.



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