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Whether you have two or eight people in your immediate family, securing life insurance is an important step. But how do you find the best life insurance for families? It is important to do your research, since what may be good for you may not be good for your family. We answer that question for you by outlining what family life insurance is, and sharing our favorite providers of family life coverage.
The Ascent's picks for best life insurance options for families
- State Farm: Best for features and options
- Prudential: Best for chronic conditions
- MassMutual: Best for financial planning
- Transamerica: Best for customizing a policy
State Farm
Best for features and optionsState Farm
Rating image, 4.50 out of 5 stars.
4.50 stars
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State Farm is routinely listed among the best life insurance companies for good reason: It's been in business for nearly 100 years and still enjoys some of the highest customer satisfaction ratings in the industry. According to J.D. Power, State Farm ranks highest among life insurance providers for customer satisfaction. State Farm has life insurance specifically branded for families.
The company's family life insurance policies provide coverage for families of all sizes. The coverage State Farm provides to children can be invaluable as the kids age. That's because children can convert the coverage purchased by their parents when they're older, even if they've since developed a health problem that would otherwise make them uninsurable.
Prudential
Best for chronic conditionsPrudential
Rating image, 4.00 out of 5 stars.
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We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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Another well-known name on our list is Prudential. Prudential goes above and beyond by providing coverage to people with chronic conditions, like HIV. By adding a spouse and children onto the primary policyholder's life insurance plan, Prudential allows families to keep all their insurance in one place with one dedicated agent. Prudential offers a BenefitAccess Rider to one of their permanent life insurance policies, which gives policyholders the ability to accelerate up to 100% of the death benefit if faced with a chronic illness.
MassMutual
Best for financial planningMassMutual
Rating image, 4.00 out of 5 stars.
4.00 stars
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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The first step in securing a family life insurance plan from MassMutual is to speak with one of its financial planners. Financial planners dig into the financial goals of potential customers and put a policy together that will help them meet those goals. After looking at your entire financial picture, a MassMutual financial professional will provide you with recommendations to help you find the best life insurance products suited to your situation.
It may be that one person wants their significant other to have a higher death benefit because that person earns more, or they want each of their children to have a rider of their own. The ability to mix-and-match coverage allows MassMutual financial planners to come up with a plan that meets the needs of the entire family.
Transamerica
Best for customizing a policyTransamerica
Rating image, 4.00 out of 5 stars.
4.00 stars
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4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
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Like other insurers offering family life insurance, the company allows customers to pick and choose the type and level of coverage that best fits the needs of each family member (including final expense coverage). What's unique is the fact that Transamerica offers several different types of term life, normally the most vanilla of all life insurance policies. The company also offers whole life and universal life insurance, and index universal life for those who want permanent coverage. Transamerica also offers final expense life insurance to take care of end-of-life expenses.
What is family life insurance?
Family life insurance can best be described as a "combo" policy. Instead of dealing with separate policies for each family member, you can get life coverage for your immediate family under a single policy. Once the principal policy holder or their spouse is covered by either a term or whole life insurance policy, policyholders can add a term rider to help protect the rest of their family.
Here's how it works:
With a family life insurance policy, the primary policyholder is covered by either a whole life or a term life policy. As the name suggests, whole life insurance is designed to last the policyholder's entire lifetime. It's the most common type of permanent life insurance policy sold today. And like some other types of permanent life insurance, a whole life policy offers a savings component from which the policyholder can borrow. Term life provides coverage for a specific number of years (typically, between 10 and 30).
A family life policy also includes a term life rider for the primary policyholder's spouse. If the spouse dies during that time, beneficiaries will receive their death benefits. In some cases, a joint life insurance policy may make sense for a family. Also known as second-to-die or survivorship, the policy does not pay out until both people on the policy have passed away.
Finally, a family life policy covers children with a term life policy. This is important for a couple of reasons. If a child should pass away, the family has the funds they need to bury the child. The life insurance policy also stays with the children when they leave home. Say a family purchases family life insurance when their children are young. If they opt for a 30-year term life policy for the kids, those children will carry the coverage into their 30s. Further, if the policy they purchase is convertible, that means the children can convert it to permanent life insurance.
What does family life insurance cost?
The cost of family life insurance is based on various factors, such as age, number of family members, death benefit, and length of term coverage. State Farm provides this example of how much a family life policy would cost a family of three. It assumes each parent has a term life policy with $250,000 in coverage and the child is covered by a $10,000 term life rider.
| Family Member | Policy/Rider Type | Annual Premium |
|---|---|---|
| 35-year-old male | Select Term-20, Best Rate | $232.50 |
| 30-year-old female | Select Term-20 Rider, Best Rate | $115 |
| Child | Children's Term Rider | $50 |
| Total Annual Premium | $397.50 |
Data source: State farm
What are typical riders for family life insurance policies?
In addition to being a hybrid of sorts, family life insurance is customizable due to the number of life insurance riders that can be added to a policy. The most common riders include:
Child
As mentioned, a child rider provides a death benefit if one of the policyholder's children dies. Depending on the insurance company, a child may be covered without a medical examination. A single child rider covers all children in the family, unless one has a pre-existing medical condition.
Waiver of premium
Say a policyholder becomes seriously ill or disabled and can't make their premium payments. A waiver of premium rider allows the policy to remain in effect, even if payments are not made.
Return of premium
If a policyholder does not die during the term of their policy, a return of premium rider returns 100% of their premiums paid. The downside is that a return of premium rider increases the cost of insurance.
Terminal and critical illness
A terminal and critical illness rider allows a policyholder diagnosed with a terminal or critical illness to take out a percentage of their death benefit to use for anything they need or desire.
The "right" life insurance company is one that provides information along with a life insurance quote. By the time a person purchases a family life policy, they should know the differences between each insurance product. For example, they should have a clear idea of what term life insurance coverage will do for them as opposed to variable universal life or indexed whole life. Partnering with an insurance company that offers education along with financial stability is a win-win situation.
| Offer | Best For | Next Steps |
|---|---|---|
State Farm
Rating image, 4.50 out of 5 stars.
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
Great For: Best for features and options | |
Prudential
Rating image, 4.00 out of 5 stars.
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
Great For: Best for chronic conditions | |
MassMutual
Rating image, 4.00 out of 5 stars.
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
Great For: Best for financial planning | |
Transamerica
Rating image, 4.00 out of 5 stars.
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair = Poor |
Great For: Best for customizing a policy |
FAQs
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How much life insurance a family should have depends on their financial goals. If they want enough to pay bills after the death of a breadwinner, they should have a minimum of 10 times the breadwinner's average annual income. So, for a couple, that means having enough to cover either of their incomes. If they want to make sure the kids can go to college after the death of a parent, they should add in the average cost of a college education in their state. While some financial gurus say a person should have at least 20 times their annual income, 10 times is a safe place to start.
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If they are minor children, the answer is yes. To buy a life insurance policy on an adult, the adult in question must provide written consent.
Our Insurance Expert
Dana George has a BA in Management and Organization Development from Spring Arbor University. For more than 25 years, she has written and reported on business and finance, and she's still passionate about her work. Dana and her husband recently moved to Champaign, Illinois, home of the Fighting Illini. And though she finds the color orange unflattering on most people, she thinks they'll enjoy Champaign tremendously.
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We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
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