Family Life Insurance

Your insurance policy depends on your age, health, retirement plans, income, and assets or wealth. Family life insurance is generally available for people who possess significant assets they want to safeguard for their family or the next generation.

Others also purchase life insurance for families to secure independence from other members of the family and not burden them when the policyholder gets sick or enters a nursing home.

Family Life Insurance Options

Life insurance for families hinge of three factors – coverage, cost, and benefits. The following types of life insurance policies are available in the US:

• Term – This type of family life insurance pays only when death occurs during the insurance term. This is usually the most affordable. Moreover, companies will charge you lower premiums for younger family members.
• Whole – Although a premium is set for the duration of the policy, this type offers families higher rates early on, when the risk of death is low, and lower rates when risk of death increases. This kind of family life insurance also has a cash value and can turn out to be more affordable for your family.
• Universal – This type marries the benefits of term and whole life insurance. Your family can borrow against its cash reserves that accumulate over time. Furthermore, your company will let you vary premiums and coverage amounts from one year to the next.
• Permanent – This offers families a lasting option, since the policy term does not expire after a period of time. The premiums for this type of family life insurance are higher. But if your company should reinvest your profits, you get paid dividends, which are not taxed, unless you use the cash value.
• Variable – Akin to an investment plan, this type of family life insurance can give you greater returns for your investment. However, since your insurance provider reinvests your profits in stocks and bonds, the cash value of your policy will depend on market performance.
• Single premium – If you have enough liquid assets, your can purchase family life insurance by making a single premium payment–which amount will, of course, be large, but could afford good security. This is a great option if you want to give an insurance policy to a member of your family as a gift. The main advantage is ZERO RISK of cancellation because of nonpayment. It often serves as a nest egg for families during better times, which can serve as a sort of contingency fund for the future protection of family members.
• Survivorship – This covers two family members under one policy. When one person dies, the remaining member gets no benefits. But when both pass away, the policy pays out. This is a great life insurance for families, parents in particular, who want a secure financial future for their children or dependents.