Life Insurance for Families

Family life insurance is a great way to support your family financially after you pass away. Read our guide to choosing the right insurance for you.

Taking out life insurance for your family is the best way to ensure they are supported financially if you were to pass away. This article will explore all of the different options you can choose to protect your loved ones today. 💛

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How can I make sure my family is provided for when I die?

Passing away with a life insurance policy means your family will receive a lump sum payout (or monthly sums in some cases) to cover the financial impact your absence leaves. While having savings and investments is also a good way to provide for your family after you pass, it normally takes a while for your estate to be distributed. Life cover claims can be made and settled quickly to ensure your loved ones have the financial support they require.

What is family life insurance?

Family life insurance is usually considered term or whole of life insurance. With term insurance, it can be level term or decreasing term, a policy set for a certain amount of time - your term. Whole of life insurance covers your whole life and ensures a payout for your family.

Because the claims process tends to be fairly quick, the payout can be used to cover funeral costs, pay off a mortgage, cover childcare costs or everyday expenses. 💷

How does family life insurance work?

Depending on the type of life insurance policy you choose, you decide how much cover you need and how long you want to be covered. You then simply add your family as named beneficiaries on your policy and pay your premiums to the insurance company.

If you then pass away during your chosen term, your family will then receive the payout. And if it's whole of life, they receive the payout whenever you pass away.

At Bequest, we also pay out early if you are diagnosed with a terminal illness and are given 12 months to live.

Types of life insurance that can help protect your family

Many different types of cover can help protect those close to you. Here are a few:

Level term

With a level term life insurance policy, you pay regular premiums throughout your term, a set period. If you then pass away within your term, your beneficiaries will receive a lump sum payout. And while there is a 98% payout rate, you need to keep your policy valid. Some reasons why your family might not receive a payout include a suicide clause, fraud, missing payments and having an incorrect beneficiary.

If you'd like to read more about level term insurance, keep reading here.

Decreasing term/mortgage protection

Decreasing term life insurance, commonly known as mortgage protection insurance, is the perfect policy if you're looking to ensure your mortgage is paid off if you pass away before doing so. With this type of life insurance policy, your premiums and payout decrease throughout your term, usually at the same rate as your outstanding mortgage decreases.

If you'd like to read more about decreasing term insurance, check out this article.

Whole of life

This type of insurance can also be known as life assurance. Whole of life covers you and your loved ones for your entire life, and there is a guaranteed payout. While there is a payout no matter when you pass away, it is one of the most expensive types of insurance.

Other insurance options

Critical illness insurance

Unlike regular life insurance policies, critical illness cover ensures you are covered financially if you are diagnosed with one of the critical illnesses listed in your policy terms. You simply pay your premiums and receive a payout upon diagnosis to help cover costs if you are then unable to work.

If you'd like to read more about critical illness cover, check out this article.

Family income benefit

Family income benefit is a life insurance policy designed with families in mind. 👪 This type of life insurance cover pays out monthly to mimic your monthly income so your family can continue with their way of life without being impacted financially.

Reading more about family income benefits can help you decide if this is right for you.

Income protection insurance

If you were to fall critically ill or be involved in an accident that would leave you unable to work, having income protection insurance ensures you get a regular income until you are able to return to work.

Who needs family life insurance?

A family life insurance policy might be perfect for:

Young families

If you are pregnant or a new parent, taking out a life insurance policy could give you the peace of mind you need. If you were to pass away, your partner and children would be taken care of financially.

Families with older children

A popular reason people take out life insurance policies is to pay for children's education such as university costs. If you have children who are still financially dependent on you, family life insurance might be worth considering.

Single parents

If you were to pass away during your life insurance term, the payout could help those around you look after your children when you're no longer there.

New couples

New couples might be reliant on both incomes to pay bills and everyday expenses. Having a life policy will help the surviving partner financially as they only have one income to pay for things going forward.

How can I make sure my family is protected?

Keep your policy up to date and make the details are available to your partner If you go through any big milestones during your policy, such as having another child, you may want to update your policy by increasing your cover amount and adding beneficiaries.

It's important to always keep your partner up to date on the details of your policy so they can go through the claims process as smoothly as possible.

Write your policy in trust (so your family receive a full & faster pay out)

Your family won't be required to pay income or capital gains tax on your life insurance payout, however, it may be liable to inheritance tax if your estate is valued at £325,000 or more.

Writing your insurance policy in a trust is the best way to avoid your family being faced with an inheritance tax bill after you pass away. 🙌

Can I buy life insurance for my child?

With some insurance providers, it is possible to take out child life insurance, but it may not be worthwhile. As there would be no loss of income if a child were to pass away.

It's far more worthwhile to buy your own life insurance to protect your family's future in case you aren't there to do so yourself.

FAQs

Can you get life insurance for the whole family?

You can make sure your entire family are covered by life insurance, however, whilst it is possible to get your children life insurance, it's more worthwhile to make them beneficiaries of yours.

How would a family benefit from life insurance?

If you were to pass away, having a life policy would help minimise the financial impact of your death. The life insurance payout would help cover a mortgage, rent, funeral costs, childcare costs, education costs and everyday living costs.

Can I put life insurance on my parents?

If you can prove that there would be a financial loss passed on to you if they were to pass away, it is possible to take out a life insurance policy on your parents. You must be eligible to take out a policy to do this.

Can I get life insurance for my mother without her knowing?

No, to take out a life insurance policy for someone else, you need permission and they need to be involved in the process.

Do you get life insurance if your child dies?

If your child is covered by a life insurance policy, you would receive a payout. Having your own life insurance policy can provide financial security to those around you if you were to die within your policy term.

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Safeguard your loved one's future and get your cover today! 🤺 Apply for Bequest Life

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FF Bequest Limited, trading as Bequest, is authorised and regulated by the Financial Conduct Authority with firm reference number 923791. You can check our authorisation on the FCA Financial Services Register by visiting the following website: register.fca.org.uk . We are registered in England and Wales, Registered office address: Founders Factory, Northcliffe House, London, United Kingdom, W8 5EH. Company Number 12367897.

Regulated by the Information Commissioner's Office (ICO) [ZA662891]. "Bequest" is trademark protected by FF Bequest Limited (UK00003452648). FF Bequest Limited is registered in England and Wales, No 12367897.

0203 916 5433

FF Bequest Limited, trading as Bequest, is authorised and regulated by the Financial Conduct Authority with firm reference number 923791. You can check our authorisation on the FCA Financial Services Register by visiting the following website: register.fca.org.uk . We are registered in England and Wales, Registered office address: Founders Factory, Northcliffe House, London, United Kingdom, W8 5EH. Company Number 12367897.

Regulated by the Information Commissioner's Office (ICO) [ZA662891]. "Bequest" is trademark protected by FF Bequest Limited (UK00003452648). FF Bequest Limited is registered in England and Wales, No 12367897.

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