FAMILY LIFE INSURANCE

 

Who is family life insurance for?

Family life insurance or level term insurance is generally designed for people who have a family to protect such as a partner, spouse or children. Many people choose family life insurance for peace of mind knowing that those they care about are protected.

This type of insurance pays out a tax-free lump sum on death of the life insured.

 

Family life insurance is ideal for someone who has any form of dependents in their household. This kind of insurance ensures that these dependents can continue to live their lives with a welcome peace of mind and not have to worry about financial hardship. Like all insurance this is a sensible financial safety net against unforeseen circumstances.

 

Is critical illness cover part of family life insurance?

Critical illness cover is often part of a family life insurance policy if you wanted to add some cover to protect yourself against becoming seriously ill or disability. In most cases it is better to take out critical illness cover as part of a family life insurance policy (level term assurance) than a mortgage life insurance policy (decreasing term assurance). This is because a critical illness risk should be considered to be constant than decreasing in line with your mortgage.

 

What does family life insurance do?

  • This can be a joint or single policy

  • This covers life insured up to age 90 (with some life insurance providers)

  • Pays out level sum insured

  • This has higher premiums than mortgage life insurance & family income benefit

 

How much does family life insurance cost?

The premiums for family life insurance are based on several major factors to determine the levels of cover you are looking for. We are happy to give you advice, so you find the best policy to suit your needs.

 

Does family life insurance cost more than other types of life insurance?

The cost of family life insurance is proportional to the amount of benefit that you would receive in comparison to other similar life insurance policies. Examples include - Mortgage life insurance, family income benefit and whole of life insurance). A family life insurance policy is specifically designed to ensure that your family and your home are protected in the event that you or your partner were no longer around to support your family. Essentially it’s a welcome peace of mind ensuring that those you care about are looked after.

 

What about inflation against my family life insurance policy?

There is an additional optional benefit you can add to your family life insurance policy called ‘INDEXATION’. This is generally free to add. Indexation means that your policy amount will increase annually in line with the rate of inflation (usually RPI + X%) ensuring that you receive sufficient policy benefits while that policy remains in place.


It’s useful to remember that that your premiums will increase in line with the new level of cover over the term of the plan. The main benefit of adding indexation is that you can increase your cover without the need for any additional medicals or underwriting. The good news is that this benefit is free with the vast majority of mainstream insurance providers currently.

 

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