Family life insurance looks different for each family. You can insure the entire household with one policy that bundles coverage, either as a joint policy or with riders that add coverage for other individuals. Another option is buying separate policies. Comparing options and premium costs can help you find the right coverage.
Term life policies are often the simplest and most affordable policies that cover families for a period where they have large expenses (mortgage payments, childcare bills and tuition). If you die during the term, your family will have money from the death benefit to cover these major costs, and there may be money left over.
Life insurance options for families vary by provider. In some cases, spouses can get a joint life insurance policy. Or you can add riders that cover additional people to an individual policy. Another option is buying separate life insurance policies for each family member.
Life insurance provides a death benefit when a member of your family dies. This lump sum payout is tax-free, and you can use it to pay for funeral costs, end-of-life bills and living expenses. You can also use life insurance payouts as an inheritance.
At a minimum, life insurance coverage for adults and children can pay for final affairs, which are sometimes costly. According to the National Funeral Directors Association, the median cost of a viewing with burial is $7,848 and $6,970 for cremation. Medical bills are another type of end-of-life cost a death benefit could help pay for. Any money left over could go toward living expenses and other bills that arise.
While living, cash value accumulated from children or adult policies could be tapped into to cover expenses, like education costs. However, investing in education savings plans over a long period could provide a greater return and be a better way to pay for school.
