There are various facets of financial planning that should be considered to protect the comforts of your family. Right from insurance plans to saving for your retirement or making sure of a child’s security, the list seems limitless. However, family life insurance plans play an important role in securing the financial future of the individual and their dear ones. Here are a few things you should know about family life insurance.Read more
Family life insurance is a life insurance policy that includes coverage for every member of your family. While the policy details vary, family life insurance generally includes whole life insurance coverage for the sole earner of the family and term life insurance coverage for his/her spouse and other dependents.
In simple words, it is a life insurance plan that combines whole life with term insurance to cover your loved ones in a single plan. Coverage for the primary is the whole life insurance while the children and spouse are insured on a term basis for a lower amount.
Family life insurance is customizable and can be planned in a way that suits your requirements. For instance, a family life insurance plan could include term insurance for both parents and their children, or everyone could have the same level of permanent cover. A Life Insurance plan for family is the smart way to protect your loved ones against any eventuality.
Choosing a life insurance policy for family/ loved ones can depend on multiple factors such as the number of members in your family, do they have kids or not, the probability of suffering from a critical ailment/illness, and other savings and investments plans. There are various options available that one can select from. Let’s take a look at some of the types of insurance plans and how family life insurance quotes differ from one company to another:
Term plan is one of the most common types of life insurance policy available to individuals. It is a fixed-term plan in which the life assured pays the insurer a specified pre-decided amount of premium for a specific period. In this, you can decide the tenure of the policy, the sum assured amount and the premiums frequency as per your needs. In case of an unfortunate event of the policyholder’s death within the term period, the death benefit (sum assured) is paid to the family.
Retirement plans help you save funds for the twilight years of your lifetime. These plans are the same as pension plans but also provide the benefits of an insurance plan. In retirement plans, a person pays a premium amount to the insurer in regular time intervals or as a one-time amount. This premium amount can then be claimed as a death payout by the beneficiary/nominee on the death of the life assured.
If the policyholder survives the policy period, they can also claim the payouts as a regular installment that can be used as income for retirement, or claim a 1-time lump sum amount from the insurer at the completion of the plan term. The duration of the policy term for retirement plans is generally 60 years of age.
These plans are very helpful in protecting the financial future of your child. The accumulated funds in child insurance plans can be used to pay for kids’ education, health, wedding, etc. In this, parents, guardians, grandparents can accrue funds by giving regular or 1-time payments till the child reaches 18 years of age. Once the child reaches 18 years, you can either claim the full corpus or select the regular payment in installments that can offer help to the child.
These plans are highly significant for children in the unforeseen situation of the parent’s death. Child insurance policies can provide financial help to children to achieve their life goals.
A money-back plan is a type of life insurance policy that allows the policyholder to receive regular returns or as a lump sum payment at a specific point during the policy term. The returns provided under this plan can be guaranteed or depend on investment performance or both. This also helps you in buying a money-back policy that suits your financial objectives.
ULIPs are the insurance policies where a share of the premium amount paid is committed to providing life cover to you or your family and the rest amount is capitalized in the industries or markets.
This plan is specifically designed for the family in which a couple (husband and wife) may take a life insurance plan combined under one policy and the policy availed can be a ULIP or term plan or any other type of life insurance policy which ensures that you and your spouse are financially protected in case of your absence.
Here is a list of the best family life insurance plan:
|Types of family life insurance plans||Claim Settlement Ratio (CSR)||Age at Entry||Age at Maturity||Sum Assured|
|Max life Online Term||99.35%||18 – 60 years||70 years||Minimum: 25 lacs Maximum: 100 crores|
|LIC e-term||98.62%||18 – 65 years||80 years||Minimum: 50 Lacs Maximum : No Limit|
|Kotak Life e-Preferred Term Plan||98.50%||18 - 65 years||75 years||Minimum: 25 lacs Maximum: No limit|
|Bajaj Allianz iSecure plan||98.48%||18 - 65 years||85 years||Minimum: 25 lacs Maximum: 50 lacs|
|HDFC Click 2 Protect||98.01%||18 - 65 years||85 years||Minimum: for Life and CI rebalance: 2 lacs For life protect and income plus: 50,000 Maximum: No limit|
There are a number of benefits of purchasing life insurance for a family and these benefits and the family life insurance quotes differ from one insurance company to another. Let’s discuss the benefits of a family life insurance policy in detail:
With a life insurance policy, you can ensure that your loved ones always have sufficient money if you are not around them. This is mainly significant if you are the main breadwinner of the family.
There are a few simple term insurance plans which are not enough for your family. These buyers want some type of advantage at the time of policy maturity and during the policy term. Money-back policies provide features such as maturity benefit, regular payments, and even planning of pension where the insurance plan converts into a pension plan at the time of your retirement.
In the case of a joint life insurance plan, you receive more benefits than the basic one. The premium amounts for a joint insurance policy are lower than other plans. For example: if a family includes a husband, wife, and daughter. The wife and husband are covered under a joint life insurance plan at the time of the husband’s death. In these situations, the full sum assured amount is paid to the wife with which she can take care of her needs and her daughter. If someday wife also dies, then there is a provision of another payment as sum assured amount under the same plan.
Get the tax benefits on premiums paid under section 80C of the Income Tax Act, 1961.
In case of your death, your family members may have to use money from an estate or sell off any other estate to cover the loans and debts availed by you. Life insurance helps your dear ones to pay any debt left behind by you, including business debt, credit card debt, educational loans, mortgage debt.
As we have discussed the benefits of family life insurance plans, now let’s discuss how should you decide which life insurance policy for family is right for you.
Assess your life insurance objectives: Goals may vary from individual to individual. You should plan for your life insurance objectives with the help of a suitable life insurance plan
Calculate the optimal cover that you require: As per the financial experts, the life cover should be at least 10X to 15X of your annual income.
Determine the amount you have to pay as the premium amount by comparing different plans and choose the plan that shows lower family life insurance quotes
Select the right policy term
Opt for a life insurance company having a high claim settlement ratio (CSR) i.e., above 95% for consecutive years
Read all the policy documents carefully
Buy a life insurance plan at an early age. The premium rates are lower at young ages.
Evaluate your life insurance requirements regularly
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