Anything can go wrong and your family could be left to pick up the pieces when you die. To ensure they’re financially secure, you can look for a family life insurance company that’ll give you peace of mind that your loved ones are well cared for.
A family life insurance policy is designed to give your family the means to provide for themselves in the event of your death. The right coverage means your family’s needs such as childcare, daily living costs, mortgages, and schooling fees are covered when the primary breadwinner is no longer alive.
Taking out a life policy as a primary earner for your family is essential if you want them to maintain a comfortable standard of living should you unexpectedly die. However, it’s also important to ensure any other person contributing to the family’s financial means has family life insurance as well.
When looking for a company to give you the best coverage for your family’s financial needs, make sure you understand what it means to take on a family life insurance policy. This way you can rest assured your family has all the financial protection they need when you’re no longer around to provide for them.
What Is Family Life Insurance?
Family life insurance is a policy that’ll keep your family well-protected financially should there be an unexpected death. The remaining family members will become beneficiaries and the life insurance payout should cover all their daily living expenses and any other costs.
This type of life insurance can be used to cover hefty costs incurred by funerals but also to pay out large debts such as the mortgage on your home. The right family insurance plan can also be used to replace any income that would be lost should the main breadwinner pass away.
With family life insurance, the remaining family members can carry on with life knowing that all their daily living expenses, childcare costs, and college fees can still be covered. This kind of policy will also help your non-working spouse provide for the family adequately.
Types Of Family Life Insurance
The type of family life insurance policy you take out depends on your own family needs. You can opt for term life insurance, which provides cover for a certain period normally ranging between 10 to 30 years. A death benefit will be paid out to your beneficiaries should you die during this period.
The benefit of this type of life insurance policy is that you’ll pay lower premiums. However, should you live past the timeframe stipulated in the policy, you’ll not receive any payout.
The other option is to take out whole life insurance or permanent insurance. You’re covered for your whole life and, depending on the policy terms, you may benefit from a cash payout. This type of life insurance is more expensive with higher premiums.
Picking The Right Insurance Policy For Your Family
Deciding which is the right life insurance for your family can be daunting and this is when you need to find the right advisor who can guide you. An insurance company should be able to help you design a policy to suit all your family needs in the event of an unexpected tragedy.
Factors to consider when talking to an insurance agent should include considering if the coverage replaces the loss of income and providing for your children’s needs while still at home. This could include daycare costs if your non-working spouse needs to return to work and can no longer care for the kids at home.
Will all debts be covered that are normally covered by your income? What other expenses do you need to consider? This could mean calculating the costs incurred by each family member including your spouse and live-in parents.
Term life insurance can cover all the major expenses incurred by your family over a certain period of time while whole life insurance will give you long-term financial security. For younger families still setting themselves up financially, term life insurance is often the best option with its lower premiums.
Joint Or Individual Life Insurance Policy? Which Is Better?
Individual life insurance policies are often better in that they provide better protection for your eligible beneficiaries. You and your spouse can both apply for individual life insurance at the same time.
Your premiums may differ depending on certain factors such as your individual health status. The family life insurance company’s agent will take you through the application process while ensuring it meets all the needs of your family.
A joint policy can be the cheaper option and applicable if your spouse doesn’t qualify for a life insurance policy of their own. A joint policy can either have first-to-die life insurance, which pays out when the first spouse dies while the second-to-die life insurance pays out when both spouses die.
Other conditions such as a survivorship policy may apply depending on the terms you agree to when taking out a family life insurance policy. You may also want to think seriously before taking out a joint policy if your relationship with your spouse is not stable.
Can I Purchase Life Insurance For My Parents?
You can take out life insurance for your parents if they permit you to do so. You’ll need to prove that you’ll suffer financially should they die. You can also take out life insurance for them if they’re taking care of your children. Your parents will need to undergo medical examinations and co-sign the policy.
How Much Does It Cost To Take Out Family Life Insurance?
The premiums of your life insurance depend on the plan you take out and your personal needs. Premiums are dependent on whether you’ve taken term life insurance or permanent insurance. It also depends on the amount of coverage. You can expect to pay anything between $145 per year to $650 or more annually.
How Much Family Life Insurance Do I Need?
Most insurance companies will recommend you take out enough coverage that exceeds your annual salary by up to 10 times the amount. You need to consider what financial support is necessary for your beneficiaries in the event of your death. This includes all your dependants such as your children and your spouse.
Coverage should be able to cover expensive medical bills, unpaid debts, college fees for older children, and more.
When picking out a family life insurance company, reviews by other policyholders are useful. These reviews will give you all the information you need to know about the company and the type of insurance services they offer. Choosing the right company will give you peace of mind because you’ll know you have the correct policy in place.
By being prepared for the worst-case scenario and taking out a life insurance policy, your family won’t need to face further difficulties while dealing with your loss. Make sure you take out the right family life insurance policy so you know your loved ones are protected financially at all times.
Do you have any first-hand experiences with family life insurance policies? Let us know your thoughts in the comment section below.