Family life insurance plays a pivotal role in securing the financial future of your loved ones. There are various types of financial plans are available based on your present financial requirements and future needs that ensure the continued well being of your family even when you are not around. So, before you decide regarding family life policy, here is a guide:
Ways in which you can plan life insurance for family:
Term insurance plans
Term life insurance plans are the plans that offer coverage for a specific time. Death benefits are paid to the family in the event of an insured person's demise within the term period. Under such plans, a policyholder has the freedom to choose the tenure, the sum assured, and payment frequency based on their requirement. You can also add specific riders for a critical illness to your term insurance plan. Such riders provide you with the financial cushion in terms of health emergencies arising due to the said critical illness and cover diagnosis and hospitalization expenses.
These are the policies wherein policyholders get regular payments at certain intervals. In the case of the unfortunate death of the policyholder, the family is paid the whole sum assured amount.
Unit Linked Insurance Plans
In ULIPs, a part of the premium you pay is devoted to providing life insurance cover to your family members, and the rest of the amount is invested in the markets.
As the name suggests, this type of plan ensures that you keep receiving regular monthly income even after your retirement, so that you can live your life freely without having to worry about your finances.
Joint life insurance
This kind of life insurance policy is specifically designed for family members. In this scheme, you can take the combination of two schemes under one plan. For example, if a couple wants to buy a joint life insurance plan, then they can take either a ULIP or a Term Plan or it can be any other life insurance plan. This scheme ensures that in case of the sudden demise of any of partner the other will be financially independent.
Child insurance plans
Child insurance plans are significantly useful in securing your child's financial future in the unfortunate event of the parents’ demise. These plans can provide monetary assistance to your children to pursue their education or pay towards major life events like marriage, etc.
Advantages of Family Insurance Policy
Secured financial future
With a family life insurance plan, you can make your family’s future financially safe and secure in your absence. Thus, your family do not have to worry about arranging finances when they need it the most.
Under section 80C of the Income Tax Act, 1961, policyholders can also enjoy tax exemptions of up to Rs 1.5 lakh per annum for the premium paid towards their family insurance policy.
Multiple options to choose from
With the growth in the life insurance sector, many insurance companies are coming with such offers that cater to the needs of a wide variety of customers. There are so many plans to choose from such as term plans, endowment plans, ULIP plans, and so on. So, after comparing all of them, you can choose the one that suits you the best.
What is the right time to buy family life insurance?
As earliest as possible, you should buy life insurance. There is no point in waiting for a calamity to happen which makes you lose all your savings. If you intend on taking life insurance for family members, then it is best to do it as soon as you get married. For individual life insurance plans its best to get them at the age of 18.
How to apply for family life insurance?
You can directly apply for a family life insurance either online or by contacting your insurer to get a quote. On the other hand, you can also use aggregator websites to find the most suitable plan and apply through them.
Why is it important to shop around before buying a family plan?
Before you buy any insurance policy for your loved ones, it is very important to shop around/compare different family plans online. As there are lots of plans available in the market today, make sure that you pick the one that suits your needs and gives you and your family the cover that they deserve.