Life Insurance Plans for a Family

There are several life insurance products available to help cover your entire family, but those that generally fall under the category of permanent life insurance: whole life insurance and universal life insurance (including variable universal life insurance) can provide financial benefits for you and your family beyond just the death benefit. These provide lifetime coverage and typically offer cash value that may be accessible even before the policy matures (i.e., before the policyholder dies).*

Life insurance policies for families are designed to help protect dependents if their primary breadwinner or caretaker suddenly passes away. Here's why every family should consider personal life insurance:

Guaranteed Protection

A life insurance policy pays out a guaranteed lump sum to your beneficiaries after you die (provided all insurance policy premiums are paid and don’t have any outstanding loans). Life insurance can help act as a financial safety net for your family's personal needs.

Supplemental Savings

Life insurance policies for families, particularly permanent life insurance products, come with a cash value component that can supplement your family’s savings. As you pay your life insurance premiums, your policy grows tax-deferred, and you can use these savings to augment your retirement income, help fund a child’s education, protect assets, support your home mortgage, pay off debt or auto loans or credit cards, or establish an emergency savings fund. Some insurance companies offer life insurance policies that have dividend potential, which can further supplement your personal finances.

Everyday Expenses

With permanent life insurance products for families, you can access the cash value amount when you need it, subject to policy provisions. This could be helpful when you need extra cash to fund loans or personal emergencies during your lifetime.

‘The earlier, the better’ is the rule when it comes to life insurance, and this rings true even for family life insurance policies.* We recommend buying life insurance for your family at the early stages of growing it, either as a newlywed or as a new parent. You may even take out a policy while you’re just planning to start a family.

Getting life insurance at a young age comes with several significant advantages, mainly related to lower costs and the assurance of insurability. Because younger individuals typically enjoy better health and pose less risk to insurers, they benefit from lower premiums. By purchasing a policy early, you can secure these reduced rates for the life of the policy.​*

Permanent life insurance is a plan that offers coverage for the entire lifetime of the insured individual, which can be beneficial for families seeking long-term financial protection. Aside from a death benefit, these life insurance policies also come with a savings or cash value component that earns interest on a tax-deferred basis.

Two types of permanent life insurance are: whole life insurance and universal life insurance.

Whole Life Insurance

Whole life insurance features a guaranteed death benefit, provided all premiums are paid and not loans remain unpaid, plus a savings component that builds up cash value tax-free. Every time you pay your life insurance premium, which is set at fixed rates, your insurance provider company the amount between your death benefit and a high-interest cash value account. The latter increases with every policy payment you make, and you may borrow against this value, subject to policy terms and conditions, during your lifetime, making it useful during financial emergencies.

Universal Life Insurance

Universal life insurance is similar to whole life insurance in that it offers both a death benefit and a withdrawable cash value component. However, it’s much more flexible than whole life insurance. With this policy, you can reduce or increase your death benefit and adjust your coverage premiums, subject to policy conditions or limits.

A part of the premiums you pay goes into an investment account, with any interest credited to you on a tax-deferred basis. If you accrue enough cash value, you can use that amount to pay for your policy premiums later on.

The best life insurance plan for your family will depend on your current financial capacity and plans for the future. That said, permanent life insurance products can often be the most ideal choice as they provide lifetime protection and offer an accessible cash value component that you can use when needed. You can speak with a life insurance agent to help you determine which policy would best fit your needs.

How do life insurance plans for a family work?

Life insurance policies for families typically don’t insure an entire group (though some companies offer these products). Instead, they usually provide coverage for a family’s breadwinner or primary caretaker, guaranteeing a death benefit to his or her policy beneficiaries.

How much do life insurance plans for a family cost?

The cost of life insurance varies greatly and depends on several factors. That said, the average rate for permanent life insurance plans for a family ranges from $500 to $800 a month.* Life insurance companies offer different rates for the various policies they offer.

Do I need to purchase life insurance for each member of my family?

Purchasing life insurance for everyone in your family is tactical, but it’s not always economical. Agents often recommend that income-earners within a home should purchase a policy to protect against loss of income.*