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How to find the right policy when insuring your family

Many of us have life insurance in place for ourselves, but did you know it’s also possible to take out life insurance for another member of your family? Whether you’re looking for a policy for your children, your spouse, your parents or even members of your extended family, this can be a wise financial decision for the future.

Why buy life insurance for a family member?

Every member of your family is important and dear to you, so how would you be able to cope if they were to pass away unexpectedly. In many situations this could come as a complete shock, especially since the task of coping with your emotional loss and learning to grieve can be a daunting one.

Here are some steps you can take when starting the search for life insurance for your family:

Understand their needs. Speak to your family members to understand how they’d cope without you.

Decide on the type of coverage. There are various types of life insurance including coverage for death, critical illness, and disability.

Compare your options. Review the brands available to see which provider is flexible to your needs and then get a quote.

How would buying life insurance for my family be financially beneficial?

The last thing you want to have to do at a trying time is worry about finances, but unfortunately the rest of the world keeps on turning even if your life has been turned upside down by your grief. There are expensive funeral arrangements to take care of and debts to be paid. In addition, you’ll have to continue to manage your everyday finances — providing for your family, paying the mortgage, buying groceries and taking care of other everyday expenses.

Term life coverage

This is where life insurance comes in. It’s designed to ensure that you and your family are able to maintain financial security when the unexpected happens, leaving you free to grieve and not have to worry about money in an especially difficult time.

Can I get life insurance for a family member without their knowledge?

It would be almost impossible to take a life insurance policy out on a family member without them knowing. The vast majority of insurance providers will require consent or a medical exam from the person they’re going to be insuring. The insured person will have to provide a range of information about their well-being and more including:

Signature on the application

Some companies may offer simplified forms of coverage where it’s possible to take out a policy on a family member without their knowledge — such as a parent buying a life insurance policy for their child or an adult buying a policy for their spouse. However, in most cases the insurer will still require a signature from the person being insured.

Buying life insurance for your parents

The death of a parent can come as an enormous shock and place a huge emotional strain on your life. Not only that, but the death of a parent can unfortunately result in you having to bear a significant financial burden. There may be unpaid debts to take care of or funeral expenses to cover. That’s a lot to take on considering you’ll still have to manage your own finances while you struggle to come to terms with your loss.

As a result, taking out life insurance for your parents can be a beneficial decision for your financial future. It ensures you can access funds when you need them most, which will offer peace of mind and let you focus on remembering your parent rather than worrying about how to manage your finances.

What should I consider when buying a policy for my parents?

It may be an awkward conversation to have with your parents, but it can save you a lot of stress in the long run. There are three types of life insurance available for elderly parents:

Insurance agent

Accidental death insurance

There are a number of factors you’ll need to take into account when securing life insurance for your parents. As a general rule with life insurance, the older the life insured is, the more expensive your premiums will be. This is because elderly people are at risk of suffering many more diseases and illnesses than their younger counterparts.

What life insurance features do my parents need?

You should look for a policy that gives you the option of renewing in the future. Depending on what type of policy you choose, you’ll also have to make a choice between graded and level premiums. Graded premiums start out cheaper and rise every year as you age, while level premiums stay constant every year.

Take the time to assess your finances and your parents’ finances to determine exactly how much coverage they’ll need. Check each policy closely to make sure you fully understand the benefits and exclusions offered.

Buying life insurance for your spouse and benefits of a joint policy

One of the major decisions many people have to make when buying life insurance is whether they should take out single or joint policy. A joint life insurance policy is owned by two people, usually married or couples.

However, it’s important to remember that taking out joint coverage does have a few advantages and disadvantages:

It’s important to note that with a joint policy there will be only one benefit payment, while individual policies pay out twice.

Life insurance license

Is it necessary to have children’s life insurance in place?

Watching your child suffer a serious injury or illness is something every parent dreads. Not only can this be hugely stressful and have a massive emotional impact, it can also place you under a significant financial strain. This is why a children’s life insurance plan is a good idea. This type of insurance provides a lump sum payment if your child dies, is diagnosed with a terminal illness or suffers a specified medical condition such as brain damage, cancer or severe burns.

What can the payout from a life insurance policy for my child be used for?

The funds from a benefit payment can be used to cover medical treatment or rehabilitation, travel costs, help you take time off work, or even book a family vacation to help you relax and recover.

It also ensures your child has coverage in place as they grow, offering you peace of mind that your little ones will always be protected.

Can I buy life insurance for non-family members?

Whether or not you can buy life insurance for a non-family member will first of all depend on your life insurance provider. Some select providers will let you take out coverage for someone who’s not a family member. In these cases, you’ll need to be able to show that you have an insurable interest in the person you want to get a policy for.

You’ll have to prove that you’ll suffer a personal and economic loss if the person you want to insure were to die. An example of this would be if you were looking to take out life insurance for a business partner or a key worker in your organization.