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Life insurance for the whole family can come in many different forms. It can include term life insurance coverage, whole life insurance, universal life insurance or a combination of term life and permanent policies. In essence, family life insurance coverage can easily be tailored to your family’s unique needs.

But before you invest in family life insurance, it helps to know how these policies work and why you should make sure every member of your family has proper protection. This guide aims to explain the core components of family life insurance, how these policies normally take shape and why you should secure life insurance sooner rather than later.

What is family life insurance?

Family life insurance is a term used to describe a life insurance policy that includes coverage for every member of your family. While the details of these policies vary, family life insurance commonly includes whole life insurance coverage for the breadwinner of the family and term life insurance coverage for his or her spouse and dependents.

With that being said, family life insurance is customizable and can be formatted in any way that suits your needs. For example, a family life insurance policy could include term life insurance for both parents and their kids, or everyone could have some level of permanent coverage.

Family life insurance may also be convertible. For example, life insurance coverage for children often comes in the form of a term policy until they reach adulthood. From there, their policy could be converted to permanent coverage that they can continue to maintain on their own.

Regardless of how you fashion your coverage, the point of family life insurance is to make sure each family member has enough life insurance to meet their needs at every stage of their lives.

For instance, if the breadwinner of the family passes away before their time, you’ll want to have enough life insurance to replace their income, take care of family debts and pay for their final expenses. Meanwhile, it’s also important to have life insurance for the supporting spouse even if they don’t work, since families can benefit from coverage that pays for final expenses, childcare and other types of support.

Additional expenses you can cover with family life insurance include:

  • Daily bills like groceries and utility bills
  • Mortgage or rent payments
  • Car payments
  • Credit card bills and other debts
  • Medical expenses or long-term care
  • College tuition and fees

When choosing a family life insurance policy, you’ll need to consider what varying expenses are likely to arise based on which member of the family were to unexpectedly pass, then fashion your coverage around protecting your family in case an unfortunate event occurs.

Joint life insurance policies for spouses

A joint life insurance policy can be a good choice for spouses without children.
A joint life insurance policy can be a good choice for spouses without children.
PHOTO: iStock

Even for families who don’t have children, buying a life insurance policy with a spouse can make sense. A joint life insurance policy can help ensure either spouse is able to continue their current lifestyle if their partner were to pass away. It can also help to pay off debts, provide funds for business transition planning and cover final expenses.

Like other types of family life insurance, a joint life insurance policy can be tailored to meet your needs and goals. However, joint life insurance usually comes in the form of permanent life insurance that’s meant to provide a death benefit until the day you die.

Many couples also add specific riders to their joint life insurance policy. For example, you could have an accelerated death benefit rider that allows you to access the death benefit early if your spouse is diagnosed with a terminal illness like cancer or advanced heart disease. From there, the funds could be used to pay for long-term care, medical expenses or other bills that arise from having a terminally ill partner.

Family life insurance for children

No one wants to even think about the death of a child, but life insurance for children isn’t necessarily only about protecting your child at an early age. Yes, it can help you cover some expenses if the unthinkable happens, but life insurance for children can also be helpful in ensuring that your child has a policy in place as they grow into adulthood.

Convertible insurance policies can guarantee that your children are covered even if they wind up with health conditions that might prevent them from qualifying for life insurance on their own later in life. And while you can purchase life insurance for children separately, policies for children can be bundled and included within a family life insurance plan.

Life insurance for your parents and grandparents

Another component of family life insurance is coverage for parents and grandparents. While older family members may be limited in the types and amounts of life insurance they can qualify for, family life insurance can include something as simple as final expense insurance with a death benefit that’s small but adequate to pay for funeral expenses and other final bills.

When you’re considering your family’s life insurance situation, make sure you also evaluate the current policies on your parents and grandparents, and ensure they have some sort of coverage in place. If they don’t have adequate insurance, you should consider helping them sign up for a term life insurance policy, permanent life insurance coverage or final expense insurance.

With final expense insurance in particular, elderly family members may be able to secure coverage without having to undergo a medical exam. They likely won’t be able to qualify for a policy with a large benefit, but you can potentially get them a policy that’s appropriate for their needs at a reasonable cost.

Should you get family life insurance?

Family life insurance protect your family if anything happens to any member of your household.
Family life insurance protect your family if anything happens to any member of your household.
PHOTO: IStock

Purchasing family life insurance may sound stressful, but it certainly doesn’t have to be. The best life insurance companies can help you figure out how much coverage you need for each of your individual family members as well as the types of life insurance that will best suit your family’s needs.

Finally, since you may be able to qualify for lower insurance rates or more coverage when you’re young, we suggest comparing life insurance rates as soon as possible. Not only does life insurance always get more expensive as you get older, but if you wait to secure coverage for your family and tragedy strikes, you could easily regret it.

Not sure if family life insurance is right for you? Read CNN Underscored’s guide to all the different types of life insurance.

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