Which type of life insurance is best for families?

“Family is not an important thing. It’s everything.” – Michael J. Fox
 

Simply put, there’s nothing more important in life than protecting our family. But, as we’ve learnt more than ever over the last two years - life is completely unpredictable. Family life insurance is a steller way to provide financial protection to the people you love in the event of your death.

What is family life insurance?

Types of life insurance

There are two main types of life insurance cover - whole life insurance & term life insurance.

Whole life insurance (also referred to as ‘life assurance’) provides cover for the rest of your life. When you die, your family receives financial support in the form of a cash lump sum. With this type of cover, your premiums and the payout amount is fixed throughout the policy.

While it is one of the more expensive types of life insurance, your family has peace of mind, receiving a payout no matter when you die. 

Term life insuranceworks much differently - rather than providing permanent cover, the policy has an expiry date (i.e 20 years). You will only trigger a pay-out if you die within this timeframe - if not you will need to take out additional cover.

There are 3 types of term life insurance cover:

• Level term - the standard form of cover in which both your pay-out and premium amounts are fixed.
   

• Decreasing term - (Also known as mortgage life insurance) This is designed to cover large payments, like a mortgage. The pay-out amount decreases over time as you pay off the outstanding debt on the payment.
   

• Increasing term - The policy pay-out increases overtime to protect the eventual amount from inflation. The main downside to this is that your premium cost will also rise.

Another form of family life insurance is the family income benefit. This is somewhat similar to a standard life insurance policy except it pays out differently. Whole life insurance has a one-time pay-out, family income benefit pays out monthly. 

Family income benefit can act as a replacement for your monthly salary, so that your family isn’t left out of pocket. With this type of cover, you choose the amount for the eventual pay-out when you first take out a policy. Speak to an adviser if you would like to learn more. 

There are also additional forms of cover available such as critical illness cover and income protection insurance. While these types of protection do not cover death they can provide you and your family with support if you are critically ill, injured or simply unable to work due to illness or injury.

Which type of cover is best for my family?

Ultimately the best type of cover for you and your family depends on your circumstances - there is no ‘one size fits all’ solution when it comes to life insurance. 

For instance, if you wish to have cover in place to support your family indefinitely then you may more likely need long-term protection that pays out a large sum like whole life insurance.

However, if your family may only need limited support or a policy which will pay out for a limited time you may be more likely to consider policies  such as family income benefit. If you have any outstanding debts like mortgage repayments, then term life insurance could be your best option.

Regardless, it’s always best to speak to someone like ourselves at Cavendish Online if you are unsure about which cover is best for you - we will be more than happy to help. 

What does it cover?

No one wants to leave their family with any financial burdens they may struggle to pay. One of the benefits of life insurance is that it can provide almost any form of financial support to your loved ones.

How much does life insurance cost?

There are several different things which can impact on the cost of a life insurance policy. When you apply for life insurance, your provider will ask you a few general health and lifestyle questions to calculate the cost of your policy.

How can I cut the cost of my policy?

Many of us are searching for cheap life insurance for our families, thankfully there are a few ways in which you can cut costs:

1. Get cover when you are young - As mentioned previously as you get older the cost of life insurance increases. Therefore it’s best to take out cover at the earliest stage in order to save money on premiums.
    
2. Quit smoking - Not only is smoking bad for your health, but it also costs you more money for life insurance. This is mainly due to the long-term medical effects caused by smoking. Some insurers will actually reduce your premiums as motivation for you to quit.
    
3. Get a joint policy - A popular choice among couples and parents, a joint policy covers two people under a single policy. It’s often considered cheaper and easier to manage than two single policies.
    
4. Choose term life insurance - If you're looking for a cheap life insurance policy, term life insurance is your best option.

Helping you protect your family

At Cavendish Online, we understand the importance of family and how it’s important to protect them at all costs. That’s why we’re here to guide you every step of the way on your search for life insurance.

Get in touch with us today to find the best policy for you & your loved ones for the right price. Call us to speak to one of our friendly expert life insurance advisors today!