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Types of family life insurance plans
The most common type of family life insurance plan is term life insurance. It’s a type of life insurance that provides coverage over a specific period, often referred to as the term. If you were to pass away during the term, your family and beneficiaries could receive a lump-sum payout to support their finances.
Since the coverage is limited to a set number of years, term life insurance can be an affordable form of protection for your family during the years when your financial responsibilities are the highest. It can be an invaluable financial cushion for dependents, family members, and other loved ones.
Blue Cross Life helps families secure affordable and comprehensive term life insurance. Benefits include:
- Flexible term lengths of 10, 15, 20, 25, or 30 years.
- Coverage amounts from $100,000 to $5 million to suit your needs.
- $10,000 in free life insurance for each child and any future children.
- 10% off rates in your first year when purchasing as a couple.
- Free cancellation with no penalties or fees.
- 30-day grace period for missed payments.
Why term life insurance for families could be a good idea
Term life insurance for families can be a good idea because it provides your loved ones with a financial safety net if the worst were to happen. The passing of a parent or family member is devastating for everyone. It can also leave the family with financial gaps if that person was a primary earner.
Term life insurance provides the beneficiaries—often family members—with a 100% tax-free payment. This lump-sum payout, also referred to as the death benefit, can be used to offset any expenses or financial responsibilities during this difficult time.
There are no restrictions on how a term life insurance payout can be used, but it’s often used to cover key financial obligations such as:
- Debts
- Living expenses
- Childcare costs
- Tuition and education
- Funeral
- Loss of income
- Retirement and savings
Term life insurance can provide families with security, so they can manage the loss without additional financial strain.
What is covered under family term life insurance?
Term life insurance for families can provide a payout or death benefit to a beneficiary if the insured person passes away during the term. The insured person is also known as the policyholder and is often a parent or a legal guardian in the family.
The beneficiary or beneficiaries are chosen by the policyholder and often include a spouse, children, grandparents, or even an extended family member. Once the death benefit is paid out, there are no limitations for how the funds can be used and can cover expenses for anyone in the family—whether that’s childcare, tuition, debt, or anything else.
To help make sure that your loved ones are covered, it’s important to select the right coverage amount and policy term to meet your needs. If you’re not sure what’s best for your family, a licensed insurance advisor can walk you through the process so you can purchase your policy with confidence.
Choosing the right term life insurance policy length
The right length for your term life insurance policy is unique to your family’s situation.
Term life insurance is designed to provide your family with additional financial security for a specific period, the “term”—usually 10 to 30 years.
Your financial obligations play an important role in choosing the right term life insurance policy length. For example, families with young children may choose a longer policy to ensure they’re protected if anything were to happen. Meanwhile, adults approaching retirement with little debt may select a shorter term.
Remember: term life insurance rates tend to rise as you age. Purchasing a longer policy term earlier on can be a more affordable option. Some term life insurance providers, like Blue Cross Life, will also automatically renew your policy at the end of your term—so you can seamlessly continue to receive coverage after your term ends.
Term life insurance for families FAQ