You can share any upgraded iCloud Storage plan with your family. See: Share iCloud+ with your family - Apple Support
They don't need to cancel their plans. That will happen automatically as described in the excerpt below from the above support article:
When you share iCloud+, any family members using the free 5GB plan are added to your family plan automatically.
If a family member is already paying for their own iCloud+ plan, they can choose to switch to your plan or keep their own and still remain part of the family. When they switch to the shared family plan, they get a refund for the remainder of their personal plan. They can't keep their current plan and use the shared family plan at the same time.