Whether you’re married and have kids or are a single parent, a variety of life insurance policies can provide your loved ones with the financial security they need in case you pass away unexpectedly. Life insurance for the entire family comes in different forms and can include term life insurance coverage, universal life insurance, whole life insurance or a blend of term and whole policies. Essentially, family life insurance can be customized to fit your unique needs.
What Is Family Life Insurance?
Family life insurance is a type of life insurance policy that includes coverage for every member of your family. While the policies can vary when it comes to benefit amounts and premiums, they generally include whole life insurance coverage for the household’s breadwinner and term life insurance coverage for his or her spouse and children.
There are no set rules for how a family life insurance policy is structured. It can be tailored in any way that suits your family’s financial needs. The point of family life insurance is to customize the policy so that each family member has enough coverage to meet their needs at every stage of their lives. Family life insurance policies can be used to cover the following expenses:
- Mortgage or rent
- Car payments
- Utility bills and groceries
- Credit card payments and other debts
- Medical expenses or long-term healthcare
- College tuition and student debt
When selecting a family life insurance policy, it's important to consider the expenses that would need to be covered depending on who would pass away.
For example, if the family breadwinner dies unexpectedly, you want to have enough coverage to replace their income, pay any debts and cover final end-of-life and funeral expenses. It’s equally important to cover the supporting spouse even if they don’t work — or earn significantly less than the breadwinner — because their contribution has a monetary value that needs to be covered.
Joint Life Insurance Policies for Spouses
Even if you don’t have children, a joint family life insurance policy ensures that either spouse can continue living comfortably if the other were to pass away unexpectedly. The money can be used to pay bills, cover funeral expenses, eliminate debt and even serve as a form of financial support while the partner grieves.
Family Life Insurance for Children
Buying life insurance for children is not very common. Adding spousal and child riders, which are customized add-ons to a main policy, to an existing plan or converting your account into standalone coverage down the line can ensure that that your child has a life insurance policy in place as they grow into adulthood.
Convertible insurance policies can guarantee that your children are covered even if they end up with health conditions that prevent them from being eligible for a plan on their own.
Family Life Insurance for Your Parents and Grandparents
Family life insurance plans can also include older loved ones who may be limited in the types and amount of benefits they can qualify for. Family life insurance for parents and grandparents can include a death benefit with enough coverage to pay for funeral expenses and other related bills. A family life insurance policy may help your elderly loved ones secure coverage without undergoing a medical exam. While they probably won’t be eligible for a policy with a large death benefit, they may be able to get a plan that fits their needs at an affordable cost.