One of life’s many concerns is how our families could cope financially if we were to die. Thankfully family life insurance can ensure that your family is protected during the difficult times ahead. 

So, how exactly does family life insurance work compared to a regular life cover?

What is family life insurance?

Family life insurance refers to any type of policy used to protect your family with financial support when you die. Just like any type of life insurance, when you take out cover you begin paying monthly premiums to your provider.

Some of the main types of family life insurance are:

Whole life insurance - Also known as ‘life assurance’, this type of policy provides permanent protection. Throughout your cover, the payout value and cost of your premiums are fixed. This type of cover is typically more expensive than other types of life insurance.

Term life insurance- This type of cover has an expiry date (i.e 20 years). Your family will only receive a pay-out if you die within this timeframe. Despite lacking permanent cover, it is one of the cheapest types of life insurance, offering more flexibility than whole life. 

Term life insurance comes in three forms:

  • Decreasing term cover - Typically used to cover a large payment. The payout value decreases over time as you pay off the outstanding debt

Family income benefit - Unlike most policies that pay out a one-time lump sum, this pays out monthly tax-free for a specified period. It acts as a replacement for your monthly income, paid out to your loved ones. 

You choose the policy length as well as the amount of your income that pays out to your family. The larger the cover amount, the higher your monthly premiums will be. Your family only receives a pay-out if you die within the policy term.

Joint life insurance - Covers two people under a single policy. It can be easier to manage and cheaper than single life insurance policies. Joint life policies usually payout after the death of the first policyholder.

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The benefits of life insurance for families

Providing you have life insurance, when you eventually die a lump sum payment will be paid out to your family. Life insurance provides a wide range of financial benefits to aid your family, such as…

Ensuring financial support

Death can have a significant impact on your family's finances. Life insurance cover can provide your family with support for finances such as:

  • Daily living expenses

  • Household bills

  • Rent or mortgage repayments

  • Childcare support

  • Outstanding debts

Can provide permanent cover

A whole life insurance policy provides permanent cover ensuring your loved ones are protected financially during the hard times ahead. Though this type of cover typically costs more, it is often considered as worth the peace of mind it provides.

Mortgage protection

If you die before your mortgage has been repaid, your family will be left to pay it off themselves. However, decreasing term life insurance can provide much-needed support, mostly beneficial if you have an interest-only mortgage. 

After your death, your family can use the pay-out to clear the debt, providing peace of mind. 

Covers funeral expenses

Even your death can leave your family out of pocket, especially when it comes to making funeral arrangements. Though you may have the perfect send-off in your head, you should ensure your family can afford it.

The pay-out from your life insurance policy can be used to help cover the costs of your funeral, without damaging your family’s finances.

Supporting your children’s future

We all want our children to have the best life possible, whether we’re around to enjoy it or not. The money your family receives from your policy payout can help support your children in many ways, especially in the future.

It can be used towards university fees,  to help them buy their first home or car, or even to help set them up to start a family of their own.

Provide your family with financial protection

At Cavendish Online we understand the importance of family and what they mean to us. We pride ourselves in helping you find the best policy to protect your loved ones at an affordable cost.

Start your search today by taking a look at our range of options on applying for life insurance.

Speak to the experts...

Give our advisers a call today.

Our team of friendly and professional advisers are on hand to help with any questions you may have regarding Life Insurance.

The advisers can also make recommendations tailored to your current situation and will research the market on your behalf, ensuring you secure the cover you need and supporting you every step of the way. 

01392 436 193(Monday to Friday, 9am - 5.30pm)

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