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Family life insurance
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Although nothing can replace you, life insurance could provide a financial payout to your family, supporting them when you no longer can.
Especially if you have children or shared financial commitments, having life insurance in place could provide reassurance to you and your beneficiaries, albeit just in case.
There are several benefits to protecting your family with life insurance:
Mortgage payment on the family home
You can arrange for your life insurance policy to cover any outstanding debts or mortgage payments. That way, your family should be able to stay in your shared home and have fewer financial worries.
It’s worth considering the different types of life insurance to find the right one for your family. For example, level term life insurance may be suitable for interest-only mortgages, while decreasing term cover could help with repayment mortgages.
Covering childcare or education costs
Life cover for parents could provide a financial benefit if one or both parents were to die. This could be used to cover living expenses for dependent children, and fund their education until they’re fully independent.
Continuing quality of life in the absence of one salary
When a family is dealing with the effects of losing a loved one, the last thing you’d want them to face is even more change. If you were to pass away, a life insurance claim and payout may help your family to live more comfortably, and provide more stability, albeit just financially.
Bear in mind that life insurance products have no cash-in value at any time. If the policy amount has not been paid out by the end of the selected term, the policy will end, and you’ll get nothing back. Similarly, if you don’t pay your premiums on time your cover will stop, your policy will end, and you’ll get nothing back.
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When considering life insurance as a family, it’s important to customise your cover to meet your needs.
Homeowners
A life insurance plan may help your family to settle any outstanding debts, including mortgages, in the event of your death. Your surviving beneficiaries would simply need to make a valid claim. Depending on the type of cover you select, you could also leave extra money to help with living expenses in your absence.
New parents or parents with young children
Life insurance may be an important consideration for parents. If someone relies on you financially, a life insurance payout might help support them if you weren’t able to.
Whether you’re a single parent, a new parent or simply planning the future for your child, life insurance can offer reassurance should the worst happen. It can cover costs for things like childcare, living expenses and education.
Parents with older children
Even when your children are grown and living independently, you may choose to have a life insurance policy in place. This could provide a payout in the event of your death and a successful claim, supporting a surviving partner, or providing for your child’s future. This could help them to, for example, get married, buy a home, or have children of their own.
Couples
Having a life protection plan could help your partner cover the costs you would have otherwise shared, such as loans or bills. Joint life insurance is just one way to secure life insurance as a couple, covering you and your partner under one single policy.
A valid claim on a joint life policy will pay out once, even if only one of you were to pass away.
Bear in mind that life insurance products have no cash-in value at any time. If the policy amount has not been paid out by the end of the selected term, the policy will end, and you’ll get nothing back. Similarly, if you don’t pay your premiums on time your cover will stop, your policy will end, and you’ll get nothing back.
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There are various life insurance options to help protect your family’s future, including:
Term life insurance
Term life insurance. With term life insurance, you’re covered for a set period only.
Options include:
- Decreasing term – often used to cover things like a repayment mortgage. The payout amount will reduce over time, in line with your mortgage balance.
- Increasing term – with this type of cover, the benefit your loved ones can claim may increase with inflation, helping them to manage higher living costs in future.
- Level-term – your loved ones can claim a pre-defined payout if you die while your life insurance policy is active. This amount won’t change during the term.
Whole life insurance
If your policy is active, your family can claim a financial payout when you die, whenever that may be. Because of that, whole life can be the most expensive type of life cover.
Critical illness insurance
While not a form of life insurance, critical illness insurance provides additional cover for medical emergencies or several illnesses you may experience. This could include cancer, strokes, and heart attacks.
A critical illness payout is made following a valid claim while you are alive. It could help to pay for family living costs when you can't work or help to improve your quality of life.
At Lloyds Bank, you can purchase life and critical illness together, or independently. Make sure you read through all policy documentation before you go ahead, making sure it provides the cover you really need.
Scottish Widows – who are also part of Lloyds Banking Group – arrange our life insurance and critical illness policies. They are our life insurance experts, helping to protect what matters most for over 200 years. To get a new policy online you need to be a UK resident, aged 18 to 59. Cover can be provided up to the age of 69.
Learn more about life cover options.
Let’s look at the details
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This really depends on your family needs. Think about your current income along with your family’s needs in the future. This will help you to decide what level of family life insurance coverage to choose. Consider all the costs that your family could encounter, from mortgage repayments and everyday bills, to childcare and education costs.
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Factors such as health, lifestyle, medical history, and occupation all affect the cost of a life insurance premium.
It’s important to be honest when you apply, both to make sure you get the cover you need, and to prevent your policy being invalidated later.
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To apply for life insurance with Lloyds Bank, you need to be a UK resident aged between 18 and 59. Just be aware, your age is just one factor that can affect the cost of your life insurance premiums.
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Life insurance isn’t just for families. If you were to die unexpectedly, you may want to make sure that your surviving partner or loved ones are provided for. You may choose to take out cover just while you’ve got a mortgage, or dependent children, protecting your financial responsibilities in the relatively short term.
Whatever you select, make sure you read through all policy documentation before you purchase cover, to make sure it provides the protection you really need.