Having a family means that there is always more than just your own needs to take care of. This need to take care of other people continues even after life has run its course.
Family life insurance can help to take care of the details involved with caring for your family financially once you’re no longer here. While money can never make up for the loss of a loved family member, it can help to ease a family through the tough transition period following a death.
Family Life Insurance
Family life insurance is also sometimes referred to as life assurance. This variety of life insurance provides a lump sum payout at the death of the insured individual. All family members can be covered in one policy or each family member can have separate individual policies. The lump sum payout provided by the insurance company can help the family to pay for medical bills, funeral costs, pay outstanding debt and simply help to make it through the difficult time of grief and adjustment. Many people require significant amounts of time off of work to recover from the death of a family member. Insurance can be there to help fill the gap and bridge the time until work can be returned to.
Family life insurance can be taken out as separate policies or as joint policies. There are costs and benefits that both that should be looked at that will help to determine what would be the best for individual circumstances. Separate family life insurance policies will often cost more but will provide more coverage. Joint life insurance policies are more affordable but often provide payout only on the death of one of the parties covered. That means that the survivor will have to have another insurance policy anyways.
Decreasing Term vs. Level Term
There are two basic types of family life insurance policies – decreasing term and level term life insurance. Decreasing term family life insurance provides a decreasing amount of coverage over time with reducing premium costs. This type is well suited to help account for debts that decrease in amount over time such as mortgages or loans. Level term family life insurance provides the same amount of coverage at the same price over time. This can be good for debts that don’t decrease over time such as interest-only mortgages or loans.
Family Life Insurance Costs
The costs associated with family life insurance can vary widely between different insurance companies. However, insurance companies look at a number of the same factors including:
• Amount of coverage purchased – what the policy’s lump sum coverage is
• Age of the people insured – generally speaking, the older people are, the higher the family life insurance costs will be
• Medical history of the insured – this includes any relevant family histories of disease and disorders
• Gender – men generally have higher premiums because of their shorter life span and different lifestyle patterns
• Occupation – some occupations are deemed to be “more risky” than others such as race car drivers and construction workers
• Hobbies and interests – some hobbies, such as mountain climbing or parasailing, can make premium amounts higher
• Smoking status – smokers often pay substantially more than nonsmokers for obvious reasons and people must be tobacco free for at least one year to be considered a non-smoker
• General health – such as weight, blood pressure and cholesterol levels
• Pre-existing conditions – some conditions may preclude qualification for family life insurance whatsoever
• Medical exams – some insurance companies may require couples to undergo medical exams to qualify for family life insurance
These factors help a company to perform a risk assessment on the family and determine how much premium costs of family life insurance should be. It’s important to check with individual insurance companies for their specific determining factors for premium costs and insurability.
It may be necessary to undergo medical exams while applying for family life insurance depending on the specific requirements of the chosen insurance company. The exam results are used to help determine premium costs and whether or not applicants are eligible to receive life insurance at all. These exams often have to be redone to renew policies at the end of each term which may be every year or every five years. This allows the premium costs to adjust over time as a person’s medical condition changes. The premium costs can increase or decrease depending on a person’s individual circumstances and the policies of the insurance company.
It’s crucial that anyone applying for family life insurance or insurance of any kind practice full disclosure. It might be tempting to leave out less than flattering details of yourself that may increase the costs for coverage. However, failing to disclose anything or lying on insurance forms constitutes fraud. The insurance company will declare the policy to be null and void if the insurance company determines that the policy holders did not practice full disclosure. This means that there will be no pay out and any premium costs will have been completely wasted. Fill out all insurance forms thoroughly including any and all relevant details.
How Much Coverage to Get
The general rule for family life insurance is to get 7 times the yearly salary for coverage. However, this general rule varies wildly depending on individual family circumstances. Young families may require more insurance because of heavy debt loads of student loans, automobile loans and mortgages. Older families may not need as much coverage because more of their debts are paid off. Insurance companies can help people determine how much coverage is necessary. It’s important to not purchase too much coverage because then the insured is overpaying. However, under-insuring can be just as big of an issue for any surviving family members struggling to manage bill payments.
Family Life Insurance Quotes
Just as when purchasing anything else, people looking for family life insurance should shop around. We can help take the hassle out of obtaining quotes. Fill out our free, no obligation online form to get started right away. We will get quotes from a number of the top insurance providers in the UK to assure that our customers get the best family life insurance policies at the best prices available.
Families come in all shapes, sizes and varieties. So too does the insurance packages that can be purchased for family life insurance. While it’s unpleasant to think about death, it is vital to plan for. This is especially true for people who will be leaving family members behind. Get the peace of mind that family life insurance provides knowing that surviving family members will be financially secure.