Steps to find life insurance for family members
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 cover for your children, your spouse, your parents or even members of your extended family, this can be a wise financial decision for the future. Some simple steps to follow:
- Understand their needs. You can speak to your family members to understand how they would cope without you.
- Decide on the types of cover you need. There are various types of life insurance including death cover, income protection and disability insurance.
- Compare your options. Review the brands available and get a quote.
Too difficult? An easy way go through these steps is by speaking to an adviser below:
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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, and the task of coping with your emotional loss and learning to grieve can be a daunting one.
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.
This is where life insurance cover comes in. It is designed to ensure you and your family are able to maintain a position of financial security when the unexpected happens, leaving you free to grieve and to not have to worry about money.
Can I get life insurance for a family member without their knowledge?
It may technically be possible to take out life insurance on a family member without their knowledge, though this is highly unlikely. The vast majority of insurance providers will require input from the person they are going to insure before offering cover. The insured person will have to provide a range of information about their health—for example, they may have to fill in health questionnaires, undergo a medical examination, and even sign the application for coverage.
Some companies may offer simplified forms of cover where it may be possible to take out life insurance 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 aging parents
The death of a parent can come as an enormous shock and place a huge emotional strain on your life. Not only that, however, 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, funeral expenses to cover, and you’ll of course have to continue managing your own finances while you struggle to come to terms with your loss.
As a result, taking out life insurance cover for your parents can be a wise decision for your financial future. It ensures you have access to funds when you need them most, which offers peace of mind, and it can simply let you focus on remembering your parent rather than worrying about how to manage your finances.
It may be an awkward conversation to have with your parents now, but it can save you a lot of stress in the long run. There are three types of cover available for elderly parents: senior life
insurance, accidental death insurance and funeral insurance.
There are a number of factors you’ll need to take into account when securing life insurance cover 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.
It’s vital to select a policy that gives you the option of renewing cover in the future, while you’ll also have to make a choice between stepped and level premiums. Stepped 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 cover you will 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 joint cover
One of the major decisions many people have to make when buying life insurance cover is whether they should take out single or joint cover. A joint life insurance policy is owned by two people, usually married or de-facto couples, while if you take out single cover you and your partner will have two separate plans.
However, it’s important to remember that taking out joint cover does have a range of advantages and disadvantages. First of all, joint policies are usually cheaper than individual policies as they often attract discounted premiums. It’s also suitable if you and your spouse have similar insurance needs, but is usually not suitable if your insurance needs differ—for example if there is an age gap between the two of you.
With a joint policy there will be only one benefit payment, while individual policies pay out twice and you can opt for different cover amounts. Finally, splitting a joint life insurance policy can be difficult if your relationship breaks down, while separate life cover can be much easier to manage in this situation. Speak to an insurance consultant to determine which approach is right for you.
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. But not only can such an event 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 relatively new type of insurance cover 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.
Children’s life insurance is designed to lessen the financial impact if your child dies or falls ill. The funds from a benefit payment can be used to cover medical treatment or rehabilitation, cover travel costs, help you take time off work, or even book a family holiday to help you relax and recover.
It also ensures your child will always have life insurance cover 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 companies will simply prohibit these sorts of sales, but many providers will let you take out cover for someone who is 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 insure. In other words, you will have to prove that you will 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 cover for a business partner or a key worker in your organisation.