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Life insurance for the whole family
Finally moving out of rental accommodation, buying a home with your partner, getting married, welcoming a new addition to the family - there are so many exciting life stages that we go through with our loved ones, and it’s often as our families grow and our responsibilities increase, that we start to think about life insurance. The question of, ‘what would actually happen if I couldn’t work?’ or ‘how would my partner and children manage financially if I wasn’t around?’.
You may be wondering what type of protection insurance would be best for you and the family? Well, there are a range of options available, and we’ll take you through some of the best ones in this guide. We’ll explain how you can get your children protected with children’s critical illness cover and we’ll also let you in on a protection insurance secret. Clue? It involves freebies!
Family life insurance is a term used to describe really any life insurance policy which pays out money to your loved ones if you pass away. This money could be used by your family to pay off debts, like a mortgage, or to replace lost income using a product like family income benefit, which we’ll explain more about below.
And did you know, some family protection insurance products also pay out if you fall seriously ill - critical illness insurance, and others pay you a regular income if you have an accident or become too ill to work - income protection insurance. Now, we accept that these aren’t nice topics to think about, but when you have a family, protection insurance is pretty much an essential! These products give you valuable peace of mind, knowing that your loved ones wouldn’t struggle financially if ever something bad did happen.
What is family income benefit life insurance? Well it works in a similar way to life insurance, in that it pays out money to your loved ones if you pass away, but the key difference is that it pays out a regular income, instead of a lump sum of money. This product is great if your family would find a regular income useful - it can provide that certainty that future bills would be covered, plus it’s usually a bit more affordable than standard life insurance!
So how does family income benefit work? Say you currently receive £4,000 a month from your job which is used to support your partner, your daughter and cover the family bills. You’re worried about what would happen if you passed away and your family lost your income. Because of this, you decide to purchase a family income benefit life insurance policy, with a term of 25 years - the length of time until your partner plans to retire. The policy would pay £4,000 a month if you died, and would continue to pay this amount until the end of the 25 year term, at which point your partner would have access to his/her pension.
There are lots of different options available with family income benefit insurance. Firstly, you can add critical illness insurance, which works in a similar way to family income benefit life insurance, but starts paying out if you develop a serious illness. You can also opt to have your regular policy payments increasing with inflation, or you may decide to take out a joint family income benefit plan with your partner.
If you’d like more information on family income benefit insurance, you can read our handy guide, or request a callback from one of our friendly protection advisers here at LifeSearch!
As a parent, there’s one scenario that you never ever want to think about, and that’s a scenario where your child falls seriously ill. And although unlikely, it sadly can and does happen. In fact, one UK insurer paid out 80 child critical illness insurance claims in 2019, with an average age of just eight years old. As unpleasant a thought as it is, it’s worth considering for a minute what you would do if your child ever did fall seriously ill with something like cancer. You’d probably want to take time off work to support your little one through everything, you’d likely need to attend multiple hospital appointments, you may even decide to go on a short family holiday for a bit of respite - escaping reality for a short while and enjoying some quality time together.
Children’s critical illness insurance is a product that makes all of this possible, paying out a lump sum amount of money, up to around £25,000, if your child falls seriously ill. This payout can help to relieve any financial pressure during a challenging time and give you and your family the freedom to live life on your terms.
Some insurers build children’s critical illness cover as standard into their adult critical illness insurance plans, whereas others offer it as an optional add on. Many plans cover children from birth up until their 18th birthday, or 23rd birthday if they’re in full-time education, and some also provide a small payout if a child passes away. This can help to cover things like funeral costs.
Children’s critical illness cover can be an extremely valuable product, but there are loads of different options out there, so it’s worth speaking to a protection insurance expert to fully understand your options. Give the LifeSearch team a call on 0800 316 3166. We're available to chat Monday – Friday 8am – 8pm, Saturdays from 9am – 2pm and Sundays 10am - 3:30pm and would love to help!
Did you know that protection insurance policies often come with a whole host of freebies, including access to virtual GPs, support around mental health - things like counselling and cognitive behavioural therapy, health and fitness discounts and nutritional support. What’s more, these services are often available for the whole family!
We’re here to protect the lives you love. Call us on 0800 316 7253 or request a callback from one of our expert protection advisers who will happily answer any questions you have. We look forward to chatting with you soon.
A qualified actuary, turned consultant, Katie works with insurers and distributors to make protection propositions more accessible, pricing more transparent and marketing messages more simple. With experience at Swiss Re and Vitality, she looks to do things better across the full insurance value chain.See all articles by Katie Crook-Davies
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