A guide to family life insurance
Family life insurance is a type of insurance that covers the whole family. This means that if you die, your surviving family members will receive financial compensation which can relieve them of a considerable amount of stress and worry during a difficult time. This type of insurance is vital for your peace of mind.
How does life insurance work?
When you take out a life insurance policy, you will have to complete a form giving accurate information about your age, health and lifestyle. You will also be asked to name beneficiaries, such as your spouse and children. Once the terms and conditions have been agreed, your policy will be drawn up. Each month, you will need to pay a premium to the family life insurance company. In the event of your death, the beneficiaries of the policy will be paid out – the exact amount will obviously vary according to the terms of an individual policy. It is important to never miss any monthly payments as this could invalidate your cover.
How much cover should I take out?
Think of any existing mortgages or debts which you would like to be paid off to ease the financial burden on your family. Consider how much money it would take to keep your loved ones in the style to which they are accustomed. You might want to think about your children’s future – money for weddings, university and driving lessons could all help to ease your children’s way into the world in your absence.
How long should the policy last?
Life insurance cover runs on a fixed term so the length of the policy is something to think about. If you opt for ten years, for example, a date which might coincide with the 18th birthday of your youngest child, your policy will automatically expire with no payout if you are still alive at that date. Of course, life policies can be extended but this will need to be discussed with your insurer.
What about insurance for minors?
Children aren’t able to take out their own insurance cover until they are eighteen. After all, life insurance is about protecting a loss of income and children don’t usually have their own income to protect. However, some insurance providers will allow you to add a child to your existing policy for an additional fee. Child life insurance is far less expensive than adult insurance simply because of the fact that children are far less likely to die than adults. Your child is then covered until they come of age, which might be any age from 18 to 23.
The advantages and disadvantages of life insurance
It’s worth spending some time weighing up the pros and cons of taking out family life cover.
- Significant financial help for your family after your death. This can include funeral costs, replament of loss of income and the payment of debts.
- Cost – if you have a chronic health condition, a dangerous or risky occupation or are over a certain age, life insurance can be very expensive.
- You might not have any loved ones to consider, in which case, life insurance is probably an expense you can do without.
When taking out a family insurance policy, it is very important to read all the terms and conditions thoroughly to make sure it is the best policy for your circumstances. If you feel it is right for you, contact us today for a free quote and look forward to relaxing and enjoying your life.