Last updated: June 22nd, 2022
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Family life insurance is a policy that covers different family members in the event of your demise. No one likes to think about it, but death is inevitable. And in that occurrence, anyone would want their family members properly taken care of.
While there are different types of life insurance available, they typically cover some functions, including:
Life insurance policies also cover basic needs such as funeral expenses, child care, and other costs. There are different life insurance packages for different people. All you need to do is ascertain which one you want to subscribe to.
If you’re a newlywed or young couple, securing your financial future should be a priority. Subscribing to a life insurance policy can help you achieve that.
One of the reasons to do so is that your expenses will increase as a couple compared to when you were single. As a couple, you take on more financial commitments such as buying new cars, a home, and all the bills attached to raising children. When one spouse dies, the surviving spouse may experience difficulty taking care of these costs. Life insurance can maintain the financial stability of the family.
There are several life insurance coverages available for young couples. Opting for anyone depends on how much you want to spend and what financial obligations to take on. These coverages include:
Term life insurance is a policy that essentially pays a set amount to your family in the event of your demise. In this case, you get to ascertain the payout and the length of the insurance. This insurance is one of the most (if not the most) affordable life insurance options available.
For instance, if you want to ensure that your income is replaced for ten years if you die, you can subscribe to a 10-year term life insurance policy with an amount that matches the income.
Permanent life insurance lasts your entire lifetime, building your cash value. It’s a suitable insurance option for people who want to offer lifelong coverage for their spouses and children when they die. These kinds of insurance coverages can be passed on as inheritance.
You can take a loan against the cash value when – even when you’re still alive. You should note that permanent life insurance is considerably expensive compared to term life insurance.
Survivorship life insurance is a form of joint life insurance. This option covers both spouses under one insurance policy and is typically cheaper than subscribing to separate life insurance policies. This insurance is also called a dual life insurance policy.
Survivorship life insurance can be set up in two ways:
Life insurance is essential for young couples and families who rely on monthly earnings for support. However, this becomes less of an issue as people get older. But it doesn’t mean there won’t be bills that need to be covered.
There are some reasons why you might need life insurance if you’re above 50 and in good health:
There are two types of life insurance for parents over 50.
Whole life insurance is a form of permanent life insurance. In this case, the insured person is covered throughout their life as long as premiums are paid regularly.
With this coverage, you may be able to take out loans or withdraw funds. The premiums are also fixed, no matter the market conditions. The cash value in this coverage grows, and it is tax-deferred. In the event of death, survivors will not pay any federal income taxes on the death benefit.
Universal life insurance is another form of permanent life insurance. In this case, the insured person is covered for the rest of their lives, as long as premiums are regularly paid. However, this policy provides more flexibility.
You can tweak your monthly payments to deal with evolving work conditions. Thus, the cash value in this setup will fluctuate.
We’ve addressed some of the best insurance policies to consider for parents over 50 in good health. What about the policies for parents in poor health?
In this case, the options available for parents are the whole life and universal life insurance. The premiums and rates are typically higher than younger parents in these insurance policies.
If you have ever wondered if your grandparents can also get life insurance, the answer is yes. You can help them figure out their finances and make arrangements for an insurance policy that will cover their end-of-life expenses. Older people typically find it difficult to be eligible for life insurance due to their health status and age.
Before taking out an insurance policy for your grandparents, you should prove that you or they have an insurable interest. You can’t subscribe to an insurance policy without their consent. So, it’s best to consult them before buying a policy.
There are two types of life insurance for grandparents available. They include:
With everything we’ve explored so far, it is totally natural to ask how much life insurance policies cost. The average cost of buying $500,000 coverage for a healthy 40-year-old for a term life policy is $315. However, for a whole life policy under the same conditions, the annual coverage is $4,865. For a survivorship policy covering 2 spouses, the annual coverage is $2,865.
It should be noted that every insurance company has its own requirements and costs. The bottom line is that these policies help take care of expenses, taxes, lifetime care of a family, and other financial responsibilities.
| Family Type | Best insurance type | What to look for |
| Married parents with children under 18 years | Term Insurance for both parents. | Guaranteed level coverage and premiums. 20 or 30-year term. 10 – 20 times your gross annual income of coverage. |
| Married couples with no kids | Term life insurance for both couples | Guaranteed level coverage of 5 – 15 years. Coverage to pay off marital debts. |
| Divorced parents with children under 18 years | Term life insurance with a custodian under the Uniform Transfers to Minors Act (UTMA) | Guaranteed level coverage until children reach 18 or 21 years. |
| Parents with children over 18 years. | Permanent life insurance | Flexible premiums and cash value accumulation. |
| Parents in good health | Universal life insurance | Cash value tied to the stock market. |
| Parents in poor health | Whole life insurance | Coverage to cover final expenses and inheritance. |
| Grandparents | Final expense | Coverage to pay final expenses. |
There are also life insurance policies offered through work. While some of these policies extend to your spouse and children, others do not. Thus, you might consider getting life insurance for your spouse and children if you get coverage for them through work.
Getting insurance through offered work is an excellent alternative to buying it yourself. However, it has its own limitations. For instance, if you lose your job, you will also lose your insurance coverage. If you quit your job to resume at a new one, there may be lapses in your coverage. Keep in mind that as your expenses increase with your family, your life insurance should also increase.
Some of the life insurance policies for employees include:
Life insurance riders are the preferred option if you want a single policy with extended coverage for your spouse or children.
Life insurance riders are typically set up to expand a life insurance policy coverage to one more person. Some of the common types of life insurance riders include:
The answer is everyone. Parents, grandparents, siblings, spouses, and children should be on life insurance policies, as it is beneficial in the long run.
Family life insurance secures your financial future when unplanned events occur. The benefits from payouts can be utilized to take care of basic expenses, debts, and cover kids’ tuition. Whether you opt for joint, term, or whole life insurance, it can aid your family a great deal.
There are several life insurance companies available. You can conduct a localized search and find options available in your state.
After which, you can compare prices and rates before choosing one.
Life insurance packages go a long way in securing your financial future and your family. With a life insurance policy, you can rest assured that your family will carry on comfortably and seamlessly.
Key Takeaways:
Brian is the founder and CEO of Insurist and carries Life, Health, and Property & Casualty licenses in all 50 U.S. states. Since 2013, Brian has been a member of Million Dollar Round Table, a designation for the top 1% of financial advisors worldwide. Brian has been featured in Yahoo! Finance, Money.com, Entrepreneur.com, Life Happens, Forbes, MSN, and Good Financial Cents. Brian’s goal is to show customers the best products, the quickest answers to their questions, and provide expert advice.
