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Life insurance for families explained

Protection for your family and children.

Why is life insurance important for families and children?

Life insurance for families means that if you died your family would receive a payout to help with their finances. You can also combine life insurance with other cover which protects them if you're unable to work. The payout means you can keep supporting your family financially.

Family life insurance can be used to pay off debts such as mortgages. It can also help pay for living expenses, hobbies, education and other outgoings.

Here's everything you need to know about life insurance for families and children.

What does family life insurance cover?

Every family life insurance policy is unique so you should always read the small print. But most policies protect your loved ones. Ensuring they will receive money to cover living costs and other expenses if you die. The insurance money can be used to pay for things like:

  • Funeral costs
  • Taxes
  • Debts
  • Mortgage payments
  • Household bills
  • School fees
  • Holidays
  • Education costs

Which life insurance is best for families and children?

There are different kinds of family and children's life insurance available. You can get life insurance on its own, which covers you or your partner in the case of death. Or you can combine different types of insurance to protect your family if you are unable to work.

  • Whole of life insurance
    This kind of insurance means your children and partner receive a pay out whenever you die.
    Learn more about whole of life insurance

  • Term life insurance
    Term life insurance for families covers you for a fixed period. It means the insurance will payout if you die within that period, but not after. For example, you might choose term life insurance to cover the period of your mortgage.
    Learn more about term life insurance

  • Income protection insurance
    If you get sick and cannot work, income protection insurance pays you part of your monthly income. The income may be tax free and helps you protect your finances while you recover. It can pay out up to 80% of your salary, but the payout is tax-free so it should replace most of it.
    Learn more about income protection insurance

  • Serious and critical illness cover
    With some providers you can add serious or critical illness cover to a life insurance plan or buy it as a standalone plan. If you're diagnosed with a serious illness, you'll receive a lump sum payout. You can use the money for things like medical treatments and paying the household bills. There's also serious illness cover for children which you can add to your plan.
    Learn more about serious and critical illness cover

  • Mortgage protection insurance
    Mortgage protection pays off the rest of your loan if you become ill or die during the policy. This means your family could keep their home.
    Learn more about mortgage protection insurance

Life insurance for young families

Starting a new family is a very exciting time. If you have recently started a family, or a little one is on the way, now is a good time to think about getting life insurance.

Having family life insurance will give you the peace of mind that your children and partner will be covered if you died or were unable to work. Knowing that the insurer will pay out means having less to worry about.

Starting a new family comes with plenty of extra costs that you may never have thought about before. A family life insurance policy will mean that your family would continue to afford those things if anything happened to you.

Here are some of the most popular kinds of life insurance for young families:

  • Decreasing term life insurance
    This covers payments for things like mortgages that decrease over time. Because your mortgage decreases in size, the payout will get smaller too.

  • Term life insurance
    A term life insurance pays out if you die within a specific period. If you die after the end of the term, they will not receive a payout.

Life insurance for when you get older or have grandchildren

Few things are more joyful than welcoming grandchildren into your family. You might think about taking out life insurance as a grandparent.

Life insurance when you have grandchildren means that your family will receive a lump sum when you die. It can be very helpful for many reasons:

  • Pay off debts
    If you have a mortgage or any other debts, these may pass on to your children when you die. Having life insurance means that this debt would be taken care of.

  • Funerals
    A funeral can be expensive. Life insurance later in life means your children and grandchildren do not have the financial costs to bear.

  • A gift
    You may have left items in a will, but it could take months or years for your family to receive the money. A life insurance payment will provide them with a sum of money shortly after you die.

Relevant guides and articles 

  • Life insurance for parents guide

    Life insurance for parents includes a variety of plans that mean your children will be covered if you pass away. Read our guide for new parents.

  • Income protection guide  

    Income protection insurance pays out a tax-free monthly income if you can't work. Find out all the key information about income protection in our guide.

  • Mortgage protection insurance guide 

    Thinking about mortgage protection cover? Find out all you need to know ahead of decision-making by reading our comprehensive guide, including answers to some of the most important questions.