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  • Writer's pictureWing Chan

How to Understand and Choose the Best Life Insurance for Your Family

Updated: Oct 10, 2023

What Family Life Insurance Looks Like Since family life insurance can cover people with many options from various companies, many insurance seekers and young families are baffled by its complexity and conditions. Yet, it's essential for those who are married, have children, or other dependents to navigate all the offerings for the best family life insurance policy to minimize financial suffering. A standard life insurance policy that protects your dependents from financial disaster in the event of your passing by passing on death benefits they couldn't do without. In fact, around 60 percent of Americans do have some form of life insurance according to reports from a 2021 Limra Barometer study. Family life insurance bolsters that protection by giving you a way to cover a range of costs after a spouse, child, or another financially-impactful party you can include.

For Your Spouse Life insurance is necessary for anyone who contributes to the home in a way that makes a financial impact or whose loss would add a financial burden. Because of this, it's not merely the main earner in the family that requires a solid life insurance policy. Instead, parents who stay at home should also protect their home from losing the valuable resources and services they perform. And, financial motivation leads as a primary reason most Americans seek life insurance from figures by Statista. Usually, the best option for a spouse is to buy a separate term or whole life insurance policy for themselves which may or may not include a medical exam depending on the policy specifics. Term life insurance is a popular and sufficient option for many families with the ability to set the interval of the policy to cover any reasonable length of time. For example, coverage can extend until your children are able to support themselves. It might also be proactive and thoughtful to cover your family until your mortgage is completely paid off. On the other hand, whole life insurance offers a way to gain lifelong coverage and cash value. The savings feature of these life insurance policies is attractive because the policy earns a certain amount of interest you can withdraw or borrow against when necessary. Parents consider that an extra form of financial security and a helpful safety net. An additional option is to buy a joint policy, called a survivorship policy, to cover major costs like certain estate taxes and special needs child-care when both parents die. Unfortunately, this means that the surviving party is responsible for the entire premium after their spouse's death (without any payout from the policy). A certain amount of financial independence and security is required if each policyholder won't need an immediate death benefit from losing their partner and can continue making payments.

For Your Child Many people don't think they need insurance for their children and dependents, but there are good reasons to think about the option. With a death benefit in case a child dies, a parent can pay for the expenses of a funeral while giving them time away from their job to grieve without added distress from failing finances. This might not mean buying a $500,000 policy in their name, but some money after such a loss can bring some relief. If you want to cover your children, you can add a child rider to your own life insurance policy or you can elect for a special and specific child life insurance policy. If you add a child to your term insurance, it can be done for as little as $5 per month to secure $10,000 in coverage. Unlike a dedicated policy, if you add a child rider, you will cover every child in your home. Then, should you decide your child needs their own policy, you can convert it. With a policy specifically for your child, you will choose a whole policy for them rather than adding them to your own. This is an interesting option for many parents and guardians because these whole life insurance policies for children can have a death benefit as well as work as a kind of savings method. Some see that it can grow over time and finance college expenses or support their own goals to buy a house or car as a young adult.

For Your Parents When children are self-sufficient most operate under the assumption that their parents no longer need life insurance to cover the financial consequences of their death. But, there are countless situations in which it makes financial sense to insure your parents. Plenty of new risks emerge for adult children as parents age, especially out of their 60s. For instance, you might need to take time off to care for your sick mother or father which means you will lose significant income as you rely on savings to get you through. You might also need to pay for long-term care that your parents are unable to afford with their own resources. While Medicare and Medicaid options are often available locally, many of these facilities may not be well-known for their care. Even if you don't need to perform or finance care for your parents because of their health, you might need to get them emotional and physical support if their lifelong partner passes away, leaving you with various financial responsibilities if they can't help themselves. Moreover, some children appear on their parent's mortgages, loans, or other agreements. If they don't want to be responsible for these debts after the parent dies, they will take out an appropriate policy. When it comes to parents, they are a big part of a child's life. Depending on what that involvement looks like, many want to take policies out. The process is not as simple as having your spouse take out a term policy or buying a whole policy for your child to save. We discuss how to get life insurance on a family member like your parents, but before you are able to take the policy out, you will need to enlist them to understand some sensitive topics:

  1. What significant expenses will your parents have in their last years?

  2. How will aging change their assets, your income, and your savings?

  3. Are there any liabilities that will cut the value of their property?

  4. Do they wish to leave you an inheritance that might help? If you have both decided that it's a good idea to move forward with getting coverage for them, next you may want to have them let you pay the premium. Since the insurance owner and the insured party do not need to be the same, adult children often control who the beneficiaries are and ensure that premium payments get made. This is important because you cannot take a policy out on your parents without their consent or knowledge. They will have to apply, sign, and may even need to take a medical exam. Though acquiring the insurance is restricted in some ways, you have multiple options for which type of life insurance you choose for your parents including term, whole, final expense, and guaranteed-issue life insurance.


Who Needs Family Life Insurance Plans? Some people don't perceive life insurance as a priority for everyone in their family, but coverage helps reduce the financial impact of a death in whether it's your child or your spouse. If the death of someone close to you would add a significant burden to those around them and perhaps yourself, considering a policy for them is smart and beneficial. You might not be sure what the consequences of a death like this might be, and so experts like Sproutt look at certain factors to decide how badly insurance is needed to avoid further misfortune. For example, you should carefully examine the ways each of your family members contributes to the household and what their personal financial responsibilities look like.

Main Earners and Spouses For those who are the main earner in the household or the sole provider, life insurance can obviously help replace the tremendous loss of income if they pass away. But, even for a non-earning spouse, a policy can help to finance the work and energy that they invest in childcare, cleaning, as well as coordination of finances, shopping, and schedules.

Children and Dependents When you consider your children or dependents, you might not think they need coverage since you don't depend on them financially. But, the roles in your household may be distributed uniquely, and you might find they offer help and support that you will need to take on or find yourself paying for. While some choose to buy whole life policies for their children (as a way to save for college tuition or build a nest egg), you can also easily add them as a rider to a family policy.

Parents, Grandparents, and Relatives Then, you might consider your parents, grandparents, and other relatives if you depend on them financially, and you also want to prepare for funeral expenses, debt, and mortgages for property you want to inherit. In general, you want to estimate the financial impact and the material consequences of losing each role in or contribution to your household and lifestyle. For instance, you may not realize that the cost of childcare in the United States is close to $10,000 per year, and for single-parent households, this is a significant burden while trying to raise children. Then, you might know that your son or daughter has enormous student debt that could be passed on to the family if they pass away without paying it off. Your parents could be carrying similar liabilities to their estate as well. You never know what effects you will feel after a tragic loss. And, while no one wants to imagine or expect this to happen to their family, they must think about their long-term goals and the safety measures necessary to protect those they love.


Find the Best Life Insurance for Young Families Young families know that everything changes after you become a parent. For many, this means realizing they are no longer just living, working, and surviving for themselves, but they are responsible for the protection and happiness of another life. Though it scares many parents, worries about what will happen if your child or spouse dies are persistent. And, good life insurance for your family is, for this reason, necessary to get right (even before a child is born). New couples and the recently married should often get certain types of life insurance in the five to 10 years before they plan on having a child because rates rise each year by almost five percent, making it sensible to get a policy sooner rather than later. (Sproutt can show you how to improve your quality index score to get you the best rates despite industry increases.) Starting the process of finding the best life type of life insurance for your young family early is the best way to secure affordable and cohesive coverage. This is also true of the best life insurance for young married couples.

Decide on a Type of Insurance The first step is to determine which types of life insurance you want to choose and who you want to cover. Above, you saw policy options for each kind of person you might have in your family and the reasons you might need the final payout.

Analyze Roles and Responsibilities Then, by considering everyone's role in your family, decide on how much coverage you want to buy for funeral costs, major expenses, outstanding debts, and future financial obligations.

Choose a Term of Coverage Unless you choose a whole policy, you will also need to select a term to cover the time that your biggest financial burdens exist, like your mortgage, your parent's mortgage, or any of the other situations discussed above.

Carefully Compare the Quotes With this information, you are ready to secure a quote from your chosen and trusted insurance providers or family service life insurance company. Read family life insurance company reviews to see if you can trust the quote, and perform a family life insurance comparison in fine detail before you fill out the application for the perfect family life insurance plan.

Get Affordable Life Insurance for the Whole FamilyFamily insurance brokered through Sproutt allows new parents, growing families, and adult children to take control of the future by predicting and planning for unfortunate facts of life. Through comprehensive life insurance, policyholders can rest easy knowing that if they lose their child, wife, husband, or mother and father, they won't be left with an impossible responsibility in addition to their heartache and grief. To get a quote from some of the best family life insurance companies in the world, turn to Sproutt, a tech-driven insurance company that analyzes the life insurance markets to find the best rates and products. Through their advanced tools and simple quoting process, you can see the options that will benefit your family and financial life most. Easily fill out Sproutt's online quote tool today, and discover the right policy for yourself, your partner, and your loved ones.

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