You Can Buy a Family Life Insurance Policy
A family life insurance policy is a form of term life insurance that protects families in the instance a parent passes away. Usually, families purchase this type of policy because they are worried about the continuing costs of raising children, and that the spouse won’t be able to manage these costs if their spouse passes away unexpectedly. They protect the family for a specific period of time, usually until the children are grown.
How Family Life Policies Work
If the insured parent passes away during the policy’s term, the family of beneficiaries receives a regular payment every month for the remainder of the policy’s term. Then, when the policy’s term is done, the beneficiaries receive the value of the policy in a lump sum. For example, a mother purchases a 20 year, $100,000 family income policy. After 10 years, the mother passes away. The father and the rest of the family would receive a regular monthly payment for the next 10 years. This payment is usually based on the value of the policy, perhaps one percent, which would be $1000 per month for 10 years. Then, when the policy came to term, the father would receive $100,000, the value of the policy.
Advantages of a Family Policy
Clearly, if the unexpected happens, a family policy protects the remaining family members and ensures they can afford their lifestyle. Most term life insurance policies can also easily be renewed when they expire, which ensures the family has continued coverage to protect them. Another advantage of term life policies is that as you grow older, you may find you don’t need life insurance, because savings and investments have grown. In that case, you can let your family life insurance policy come to term and not renew it, knowing you have the resources to take care of your family no matter what happens. Yet another advantage of term life policies is that they are more affordable than most other types of life insurance, so even if you’re a growing family, you can fit the premiums into your budget.
So, invest in a family life insurance policy when your children are young, and have the peace of mind that comes from knowing your family is protected no matter what happens to you and your spouse.