Family life insurance


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Family Life insurance

Life insurance is an important part of protecting your family’s finances for the future. It’s a selfless thing and ensures your loved ones are looked after should the worst happen to you.

However, sometimes the hurdle of understanding the different types of cover and payments can be confusing and puts people off buying it. If you search for family life insurance, you might be confused by what you find. That’s because family life insurance is just like normal life insurance. It’s a case of deciding if you want to take out a policy for yourself and your partner, either joint or individual policies, to make sure your children have some financial security if the worst were to happen.

Frequently Thought Questions

In order to get over this barrier, we’ve done the hard bit for you. We’ve pulled together all the information you need about understanding how to get life insurance cover for your family by considering all the questions that you’d need answering if you were considering taking out life cover. Let’s get started… 

What is family life insurance?

Family life insurance is just another way of describing normal life insurance. There’s not actually a dedicated family life insurance policy per se, because a single or joint life insurance policy will provide financial cover for your beneficiaries (in this instance your family) if the worst were to happen. This should then provide your family with some financial security during a difficult time.

You could get cover for your children in some instances, but this tends to have a minimum age of 18 years old. This is just because you’re not usually financially dependent on your children so there is less need for cover. An option for your children on some policies is Critical Illness Cover. This would cover them in the event of them becoming ill, as long as the condition they developed was listed in your policy. You’d just need to check that this is something that is included in the policy you choose.

Does a joint life insurance pay out on both deaths?

Joint life insurance is designed for couples, meaning that a pay-out would occur in the event of either partner passing. But a joint life insurance policy only provides one pay-out after the first partner passes away. After this, the policy ends. This means any dependants would not receive for another pay-out if the second partner were to pass away unless another life insurance policy was taken out before this happened.   However, joint life insurance policies can be cheaper than two individual policies as there is just one pay out. 

Why do I need life insurance?

Whether you have just got married or have a partner, are a new parent, or if your children are starting to grow up and go to school, you’ll always have your loved ones best  interests at heart and want to make sure they are protected financially should the worst happen to you. Life insurance is simply a way of giving your family or partner some financial security after you have gone.

What can I use the proceeds for?

That decision would be for those that you have taken out the policy for, as the proceeds can be used however they wish. Common uses include:

- Clearing a mortgage and any other outstanding debts.

- Covering day-to-day expenses that your family might currently rely on your salary to pay.

- Covering funeral and associated costs.

What types of life insurance are available?

There are a variety of different life insurance policies each with different features that suit people in different circumstances. It is important to make sure that you understand the various options available to you. Life insurance is an important investment for your family’s financial security, therefore you should put some thought into what you might need to protect your family.

Term life insurance

This type of policy pays out in the event of your death within a specific agreed time period. This could be useful if you’re looking to cover expenses whilst your children are young, but perhaps minimising your costs by having the policy expire when they’re a little older. 

Decreasing term insurance

The most affordable life insurance premium is likely to be decreasing term insurance; this is often referred to as mortgage life insurance as the lump sum paid out decreases over time in line with (but not linked too) your outstanding  repayment mortgage balance. As the amount paid out decreases over time the monthly premiums are often lower than that of a policy where the potential claim pay-out doesn’t decrease.

Family income benefit policies

This is a type of decreasing term policy. However, instead of a traditional lump sum payment, it pays out a regular income to your dependents until the policy's expiry date if you were to pass away.

Whole-of-life policies

This is the alternative to a term policy. Whole-of-life policies are ongoing policies that pay out when you die, whenever that is. As this means a pay-out is guaranteed at some point, these policies are usually more expensive than term insurance policies. You may need to speak with a financial advisor if you’re interested in taking out this policy. 

What should I consider if I’m thinking about a term life insurance policy?

When taking a term life insurance policy, the main consideration is that you might outlive the term of the policy. This means you’d no longer be protected past the policy end date. In these circumstances, you might then have to apply for a new policy. Your higher age and any medical conditions that may have developed since you first took out a policy, could mean that your premiums are higher when you need a new policy. 

What if I have pre-existing medical conditions?

If you have a pre-existing medical condition, you will still be able to get life insurance cover, but the monthly premiums could increase due to any higher risk associated with the condition.

What is critical illness cover?

Critical illness cover is often added to your life cover but can also be taken out separately with some providers. Critical illness cover means you receive a lump sum pay-out in the event that you are diagnosed with a serious health condition such as cancer. Take into account however; claiming critical illness combined with life insurance means your family might not get a second pay-out again in the event of your passing. For example, if you have taken out a £100k level term with £20k allocated to critical illness cover, then even if you become critically ill and need to use your cover, you will still have £80k of life cover in place. However, if the policy is £100k for both life and critical illness cover combined, and £100k is taken out for a serious illness, the plan ends there.  Make sure you check your policy carefully to ensure you have the right type of cover in place

How much can I expect to pay for family life insurance?

The premium that you’ll have to pay depends on a range of variables including, your age, health, smoking history and the level of cover that you’re looking to acquire.

I need some advice, is there someone I can call?

If you do feel as though you need any more help we have a friendly team at LifeSearch (our specialist partners in life insurance) who are on hand to provide any help and advice you need.

They’re available on 0800 197 8912, Monday to Friday between 8am and 8pm, and on Saturdays between 9am and 2.30pm.

Comparing the cost of family life insurance

The best way to find out how much you could expect to pay for life insurance is by doing a quick comparison here with us. You tell us what we need to know about you and your partner if you are looking for joint cover, and the level of cover you’ll need, and we’ll give you an indication of what the cost of the insurance might be for you.

All you then need to do is compare the various options and policy details to find the policy that is right for you.

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