In a way, all life insurance policies can be considered family life insurance if the goal is to make sure that your loved ones will be financially protected in case you pass away. The key is to make sure that you find a policy that provides the right amount of coverage and meets all of your family’s needs.
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Life insurance for families
Life insurance is a topic many people deliberately avoid; it can make them emotional to even think about leaving their loved ones behind. But the possibility of not being there for your loved ones is exactly why you should think about life insurance for families. Life insurance will secure financial protection for members of your family if you can’t be there to support them.
Reasons families should have life insurance
Here are just a few specific ways that life insurance can help protect your family’s lifestyle and future in case you pass away:
Replace lost income:
In most cases, the primary purpose of a life insurance policy is to help replace the income that your family depends on and minimize the financial disruption that your family would endure.
Retire your mortgage:
You worked hard to put a roof over your loved ones’ heads—and you’d like to keep it there. If you pass away before the mortgage is paid off, your family could use the death benefit to keep up with the payments, or possibly retire the mortgage altogether.
Pay for college, weddings, or other important events:
While you may not be able to be there in person, life insurance can help you make sure your loved ones have the funds needed to make their dreams for tomorrow come true.
Keep your business afloat:
If you own a family business, the proceeds of a life insurance policy can help support the business during this difficult time or give your loved ones the time they need to find a new owner.
Leave behind a legacy:
Since the death benefit of a life insurance policy is generally exempt from income taxes, life insurance can be an easy and efficient way to transfer wealth to your loved ones.
What is the best life insurance for families?
If you’re starting to think about the family life insurance policy that will best suit your needs, you’ve come to the right place. The first step is to take stock of your family’s current and future goals. Do you want temporary protection or lifetime coverage? Do you want simple protection, or do you hope to establish a legacy? New York Life has four life insurance products that will work as family life insurance and prepare your family for the unexpected. These options are term life insurance, whole life insurance, universal life insurance, and variable universal life insurance. Whole life, universal life, and variable universal life* provide long-term protection, as long as premiums are paid; term life provides protection for a set time. Each product is different and has unique benefits that can provide life insurance coverage for families.
What is the difference between whole life and term?
- Term life insurance can secure what matters to you the most right now, and it can evolve to fit your needs as your life changes over time. You can choose how long you want coverage, lock in premiums that are guaranteed to stay the same for a selected period—and convert some or all of your term coverage to a long-term policy if your needs change later.
- Whole life insurance gives you the benefits of lifetime permanent protection, plus it has a cash value component that grows tax free over time. You can access the cash value at any time and for any reason. It can be used for expenses such as a down payment for a home, helping to pay for a child’s college, covering student loan debt, paying medical expenses, or supplementing your retirement savings if your insurance needs decrease later in life. Of course, accessing cash value will reduce the death benefit and available cash surrender value.
Whichever life insurance product you decide on, you’ll gain peace of mind about your family’s financial security.
Is family life insurance affordable?
When it comes to the cost of coverage, there are a few factors that will determine how much you’ll spend on family life insurance.
- Affordability and buying early. The older you are, the more you could end up paying for life insurance, so it’s best to purchase a policy at a younger age. Since a younger person is likely to live longer and have more time to pay premiums, the younger person’s premiums are lower. Gender can also affect life insurance costs. Women have a longer life expectancy (and more time to pay premiums), which could result in lower insurance costs. Overall health considerations, including tobacco use, family history, occupation, and lifestyle also have a significant influence on the amount of your premiums.
- Insurance age. This is the age that life insurance companies use to set your rates. Your life insurance age depends on the birthday you’re closest to instead of your current age. If you’ve reached your half birthday, insurers view you as if you’re already the age you’ll be on your next birthday.
- Versatility. Term life coverage is temporary, but you can set the period (or term), often for one year, 10 years, or 20 years. Premiums for a longer term will be higher than premiums for a shorter term. Since whole life can last your entire life(as long as you pay the premiums), it is initially more expensive. Typically, the amount of coverage you buy affects what your premiums will be. A policy with a high death benefit, for example, will cost more than a similar policy with a lower death benefit.
- Tailored/customized for each family. To ensure that you get coverage that fits your unique needs, you have the option to add riders to the policy, some at additional cost; they give you and your family extra benefits, such as your premiums being paid for you if you become disabled.
How can a New York Life agent help your family?
You can work with one of our New York Life agents to get a specific quote. Your agent can help you decide the amount of insurance your family needs and identify the product (or products) that will best fit your budget. And once you find the policy that’s best for you, your agent can help you proceed.
Frequently asked questions
While it isn’t very common, there are a few companies that offer comprehensive family life insurance policies. In most cases, however, you can get the coverage you need more effectively by purchasing individual policies that focus on the primary breadwinners. If you prefer, many companies offer joint life insurance policies that protect both partners. If that’s something you’re interested in exploring, a New York Life agent can help.
Since every family’s needs are unique, it’s important to ask yourself why you need coverage in the first place. If income replacement is your top priority, for example, you may want to add up how much you make in a year and multiply that by the number of years you are likely to continue to work. Another strategy is to add up all of your annual expenses and make sure you have enough protection to cover a particular period of time. Of course, there are a host of factors to consider, so it’s always best to consult an agent before making any decisions.
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Offered by properly licensed Registered Representative of NYLIFE Securities LLC (FINRA/SIPC), a Licensed Insurance Agency and a New York Life Company.