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Family life insurance
Looking to buy life insurance for you and your family? Certain policies can cover your partner, your parents and your children.
What's in this guide?
Compare leading life insurance providers
- Compare the whole market
- Cheaper than going direct
- Optional critical illness cover
You would generally take out life insurance so your loved ones can maintain the same quality of life should you no longer be around or to pay off any large outstanding debts such as a mortgage.
Yet, you may also be concerned about the financial impact it might have if one of your loved ones were to suffer from a serious illness or even die. In which case, you might want to cover your family under the same policy.
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Why should I consider a family life insurance policy?
In most cases, it’s the breadwinner of the family who takes out a life insurance policy, so they can rest assured their loved ones will be looked after should they die. However, a standard life insurance policy won’t cover certain expenses, such as the following:
- Any necessary costs for keeping a home operational if a stay-at-home parent were to die
- Medical fees related to the treatment of a child for a serious illness or injury
How would buying life insurance for my family be financially beneficial?
Taking care of finances will be the least of your worries during a time of grief or shock. Yet there could well be expensive funeral fees to handle and debts to pay off.
There will be your everyday finances to think about too, such as paying the mortgage, going to the supermarket and managing other expenses like energy bills.
If you or a family member suffer from a serious injury or illness, you could have to make modifications to your home or bring a carer in either part time or full time.
Depending on the type of cover you get, life insurance can help with these costs and offer a vital safety net while you grieve or adapt to a major injury or illness.
Immediate costs
- Loss of income
- Funeral expenses
- Medical expenses incurred before loss
Household expenses
- Cost of childcare
- Groceries
- Housekeeper for daily chores
- Expenses for children, including school, clothing and transportation
The following are some other ways life insurance can benefit your family financially:
- It can help you leave behind an inheritance for your wife, children and grandchildren
- It can help with funeral and burial expenses
- It can accumulate cash value depending on the type of life insurance policy
- It can help with recovery after an accident or illness
How much your family will need in the event of a death, or serious illness or injury, will depend on your own situation. Sit down and work out how big of a financial safety net your family would need, and then take out the appropriate level of cover.
How to get a family life insurance plan
You can choose one of the following types of family coverage:
- A critical illness policy that includes you and your child/spouse
- An individual critical illness policy for your child or spouse
- A joint life insurance policy that protects both partners in a relationship
This type of policy will cover both people in one policy and will pay out to the surviving person should the other die during the policy term. It can be a good idea for the following reasons:- 1. More affordable. Typically, you pay less in premiums than with two separate policies. You might even get a discount on your deal.
- 2. Peace of mind. Both people will be financially protected if the other were to die or suffer a serious or terminal illness.
- 3. Less hassle. There is less paperwork when signing up to and managing the policy, and there is only one lot of bills for the policy owners to worry about.
Buying life insurance for your parents
Losing a parent can be a painful and distressing period in your life, yet it can unfortunately also leave you with a significant financial burden. You might have to pay thousands of pounds in funeral fees or take care of unpaid debts.
So taking out life insurance for your parent could be a good way to prepare for this emotionally turbulent time by offering you peace of mind now and giving you room to grieve in the future.
What should I consider when buying a policy for my parents?
Discussing life insurance with your parent might prove awkward, but you might decide it’s necessary. If you do decide to get cover for your parents, you might opt for one of the following policies:
- Over-50s life insurance
- Term life insurance (might be difficult to get for a senior)
- Pre-paid funeral cover.
You might find it difficult getting affordable cover for your parents. Insurers will look at a number of factors, with age and health being two of the main reasons they’ll up prices or even reject your application. This is because elderly people are more at risk of developing a serious illness, disease or suffering from an injury.
How to buy a life insurance policy for your parents
Buying life insurance for your elderly parent is just like taking out a policy for yourself, but there are a couple of additional steps to think about. Here’s a general guide to help you out:
- Consent. Before you do anything else, check that your parents are happy for you to take out life insurance on their behalf. You’ll need their permission at the end of the day.
- Level of cover. Sit down with your parents and discuss their finances. If they have big debts to pay off, you might decide you want higher levels of protection.
- Iron out the details. You will need to provide your parents’ medical details and other basic information. Double-check your parents haven’t already taken out life insurance in the past too.
- Insurable interest. Once you’ve got your parents’ consent, you’ll need to prove “insurable interest” to the insurer, explaining why you would stand to lose out financially if your parent dies.
Buying life insurance for your spouse and the benefits of a joint policy
If you are married or have a partner, one main decision you’ll have to make when taking out life insurance is whether you need a single policy or a joint policy.
There are advantages and disadvantages to taking out a joint policy:
Advantages
Disadvantages
- Joint policies are generally cheaper
and come with discounted premiums
- Smaller payout overall as it will only cover the first death
- Well suited to couples with similar insurance needs
- Not ideal if you have different insurance needs and it can be difficult if you break up
It’s worth bearing in mind that a joint policy will only pay out once, while individual policies will pay twice.
Buying children’s insurance?
When people take out life insurance, one main reason they do so is to provide money for their children. Yet it can also offer you financial support if something should happen to them. Should they fall sick or suffer from a serious injury.
Can I add a child to my existing policy?
Several insurers will cover your child as standard if you take out critical illness protection for yourself. However, this isn’t always the case. Sometimes you have to pay extra to cover a child on your critical illness policy, so double-check before signing up.
What can the payout from a life insurance policy for my child be used for?
There are several reasons why taking out a life insurance policy for your child can be a good idea. For example, it can help pay for the following:
- Medical treatment or rehabilitation
- Travel costs
- Costs arising from you taking time off work
- A family holiday to help you relax and recover
What conditions are covered?
The conditions your child will be insured for will depend on the provider, but generally the insurer will pay out for the following health issues:
- Major head trauma
- Meningitis
- Encephalitis
- Total and permanent loss of one or both limbs
- Loss of sensory abilities, deafness, blindness
- Paralysis
- Accidental death
These conditions will vary between insurance providers, so it’s important to read the fine print before you sign the dotted lines.
What events will generally be covered by a family life insurance plan?
Conditions covered will differ from policy to policy, but can include the following:
- Death
- Terminal illness
- Cancer such as leukaemia, invasive cancer and skin cancer
- Coronary attacks including heart attack, stroke and cardiomyopathy
- Coma
- Blindness
- Kidney failure
- Major burns
- Paralysis
What factors do I need to consider when it comes to family life insurance?
As well as working out your family’s current and future finances, you will need to consider the following factors before taking out a life insurance policy for you and your family members.
- Your age and your partner’s age
- How inflation will affect your income and future expected earnings
- Employment status of you and your partner
- How much each partner contributes to the family’s finances (including savings and paying off debts)
- The number of children you have and their age
- How long you’re considering to have a policy that can cover your family’s ongoing needs
- How much you have stored away in assets and investments
Ultimately, you might decide to go for a “term life insurance” policy that will cover you and your family for a set number of years. If you just need financial protection while you pay off debts and wait for your kids to grow up, this can be a good idea as premiums are typically more affordable.
However, if you want a guaranteed payout when you die, you would go for a “whole life insurance” deal. These can be useful if you’re struggling to get cover for your family due to age or health reasons.
Or if you want, you can try to increase the size of your payout by linking it to an investment fund – a feature that some whole life policies offer.
Last-minute tips
To help you find the right life insurance policy for your family, consider the following tips:
- Shop around. It’s crucial you compare quotes and don’t just go for the first deal you see. By shopping around, you can make sure you get the deal you need at the best possible price.
- Consider a joint policy. A joint policy can protect both partners in a relationship and typically costs less in premiums. However, the overall payout may be less than if you were to get two separate deals.
- Critical illness cover. By taking out critical illness cover alongside a standard life insurance policy, you can ensure you’ll get financial help if you suffer from a serious illness. Your children are often covered too.
- Include children in the policy. If your children aren’t protected as standard by your critical illness cover, you might want to take out an individual policy covering them.
- When in doubt, speak to an insurance adviser. Insurance brokers can offer you tailored advice about life insurance. They can look at your situation and explain which policy might be best for you and your family. What’s more, they can help you cut costs and get the most affordable deal too.
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Frequently asked questions
The offers compared on this page are chosen from a range of products we can track; we don't cover every product on the market...yet. Unless we've indicated otherwise, products are shown in no particular order or ranking. The terms "best", "top", "cheap" (and variations), aren't product ratings, although we always explain what's great about a product when we highlight it; this is subject to our terms of use. When making a big financial decision, it's wise to consider getting independent financial advice, and always consider your own financial circumstances when comparing products so you get what's right for you.
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