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What is Family Term Insurance?

Living in a progressive world provides us with various investment opportunities allowing us to build our wealth and secure our family’s future. However, one also needs to take into consideration that life is full of uncertainties. Unfortunate incidents can happen anytime, anywhere. In case something were to happen to you, it would force your loved ones into financial turmoil. For such situations, a sound term insurance plan comes in handy. A family term insurance policy is one of the most basic life insurance plans available in the market. It provides financial protection to your loved ones in your absence. With the help of a lump sum death benefit, your family can secure their future and be financially independent.

 

So, if you are a sole earner in the family, it is better to buy family term insurance and safeguard your loved ones.

What are the Features of Term Insurance Policies for Family?

Check out the features of term insurance for family that shall go a long way in covering your dependents:

 

  • Pure Life Cover

Family term insurance is a pure life cover, designed to offer financial support to your loved ones. It is a suitable plan for individuals looking to cover their family in the event of an unforeseen mishap.

 

  • Affordable Insurance Option

As term insurance for family only provides a life cover, it is the most cost-effective life insurance plan available in the market. Therefore, you can stop worrying about the high premium rates and get a term plan. Estimate your insurance premiums and plan your coverage with the term insurance calculator available on Finserv MARKETS!

 

  • High Coverage

Policyholders can opt for a higher sum assured amount to financially protect their dependents. This is possible due to the affordable premium cost of a term plan for families. The premium rate for a 1 Cr term insurance plan is much lower when compared to other life insurance policies.

 

  • Customisable Policy Period

Term Insurance offers you a range of tenure options. Hence, the policy period of a term plan for a family can be personalised to provide coverage when you require it the most.

 

  • Rider Benefits

Riders are additional components that you can purchase to maximise your insurance coverage. With covers such as critical illness, accidental death, disability, etc., you can secure your family from other risks as well. So, you can enjoy extensive coverage under family term life insurance.

 

  • Availability of More Insurance Variants

There are different types of term insurance plans that you can buy to suit your requirements. Some of them are level, increasing, decreasing, Return of Premium Term Insurance, etc. Let’s learn more about such term plans in the following sections.

What are the Benefits of Family Term Insurance?

Here are some key advantages of getting term insurance for your family:

  • Provides a Financial Backup

Term insurance enables you to provide your loved ones with a financial backup in case of a mishap. Instead of being dependent on your life savings, the lump sum payout from term insurance shall help safeguard the future of your family. Due to the low premium rate, you can easily opt for a high sum assured to ensure your dependents have sufficient coverage.

  • Covers Unfortunate Incidents

Unforeseen mishaps do not come knocking on your door. Due to the uncertainties in life, risks such as getting diagnosed with a major ailment, loss of income, or suffering from a permanent disability can come your way. To ensure your loved ones aren’t left fending for themselves, term plans offer rider benefits. At a cost-effective rate, you can buy various covers and get financial protection from several unfortunate incidents.

  • Tax Benefits

The family term insurance plan also acts as a tax-saving instrument. The premiums paid towards the policy can be claimed under Section 80C of the Income Tax Act, 1961. A maximum cap of ₹1.5 lakh is applicable on the amount you can claim per financial year. Apart from this, your beneficiary can claim the death benefit as tax-free under Section 10(10D) of the Income Tax Act.

  • Peace of Mind

There’s nothing like knowing your loved ones are safe and secure. With the help of a term plan for family, you can make sure your dependents have more than enough to take care of their needs. Therefore, you can have peace of mind knowing your family has the right backup in case of mishaps.

Why Does the Head of the Family Need Term Insurance?

As a family term insurance plan is a pure risk cover, it solely provides insurance coverage to you for a specified period. If you are the breadwinner of the family, term insurance is a must to keep the financial burden off your shoulders. The sum assured can help manage the expenses of your dependents, education of your children, healthcare needs, any debts, etc. Therefore, the head of the family must have insurance.

Usually, the family term insurance plans offer several payout options in the event of death:

  • Lump-sum payout

  • Partly as the lump sum and partly as monthly payouts for a predetermined period

  • Sum assured amount as monthly payouts for a predetermined period

Along with this, you can also choose to pay premiums on a monthly, quarterly, half-yearly, or annual basis. So, if your family’s well-being depends on your earnings, term insurance for your family can secure their future needs and aspirations in your absence.

Which Life Insurance Policy Should You Buy for Your Family?

Depending on the insurance requirements of your family, you can pick the right life insurance plan for the long term. Other factors that you can consider to pick the best life insurance policy for a family are the number of dependents, current financial condition, education of children, medical care, etc. Let’s look at the various life insurance plans that you can choose from:

  • Term Insurance for Family

Such a plan is a lucrative option as it financially safeguards your dependents with the right coverage. At a cost-effective premium rate, you can avail a high sum assured that shall cover all monetary requirements of your family.

Furthermore, you can also opt for rider benefits for extensive protection from other risks. The rider would pay out a lump sum benefit in case of an unfortunate incident covered under the add-on cover.

  • Child Insurance Plan

Due to the rising cost of higher education as well as healthcare, ensuring your precious one has the access to the best is vital. This kind of insurance policy secures the future of your little one and thus, you can rest assured. After your child turns 18 years of age, the benefit will be paid out as a lump sum or in installments to secure various expenses. Be it their education, health requirements or any other need, the child insurance plan shall always have their back.

  • Retirement Plans

Who doesn’t await their retirement after working for decades? But finally, when the day comes, you must have enough for a peaceful retirement life. With a pension plan, you can get regular payouts or a lump sum benefit to replace your income and stay financially stable. Thus, you can plan your retirement goals and save up for the long term.

Types of Term Insurance Plans

Let’s understand the types of term insurance policies available to pick the right plan for your family:

 

Term Insurance Plans for Family

Benefits of the Plan

Level Term Insurance

  • It is a term insurance plan that provides financial protection to your family

  • The premiums you pay remain the same during the entire policy tenure

  • In the case of renewable level term plans, you can continue the policy for additional term(s) up to a specific age

Return of Premium Plans

  • Return of Premium Term Plan (TROP) allows you to enjoy a maturity benefit at the end of the policy tenure termed as survival benefit

  • In simple terms, the premium amount paid will be returned if you outlive the policy term

  • This amount can be utilised for your child’s future or your retirement planning

Decreasing Term Plans

  • The sum assured amount keeps on decreasing over the years

  • It can be ideal if you have to pay off loans in EMIs (Equated Monthly Installments)

  • That way, your loved ones do not have to overhead the financial burden of paying off the debt in your absence

Term Plans with Riders

  • Certain term plans like the Bajaj Allianz Life Smart Protect Goal Term plan offer rider options for maximum coverage against various risks. Learn more about the term insurance plan by heading over to Finserv MARKETS

 

Over to you!

For most of us, our family is the most important part of our life and thus, ensuring they have more than enough can be crucial. The last thing you would want is to leave your loved ones with any financial burden. Term insurance for family allows you to rest assured that your dependents are taken care of and have peace of mind.

So, don’t put it off any longer! Go through the term insurance policies available on Finserv MARKETS now! With increased coverage tenure, lucrative rider covers, tax perks and more, the family term plan will have your back no matter what.

Term Insurance Covers and Requirements

Read More About Term Insurance

Government Life Insurance Schemes

FAQs on Family Term Insurance

✔️Can I take a loan against the term insurance policy for my family?

As term insurance plans are risk covers, such policies do not have a cash value. Thus, you cannot avail a loan against your family term insurance plan.

✔️What are the various riders available under term insurance plans?

The various rider benefits that you can avail with your family term life insurance are:

  • Critical illness cover

  • Accidental death cover

  • Permanent disability rider

  • Waiver of premium rider

  • Accidental total permanent disability rider

✔️Can I purchase term insurance even if I am a housewife?

Yes, you can opt for a family term insurance plan as a housewife to financially safeguard your loved ones.

✔️Is it possible to get a term insurance plan as a senior citizen?

Yes, you shall find many insurance providers that offer term insurance policies to senior citizens as well.

✔️How much should my family term insurance sum assured be?

The sum assured amount can vary from one individual to another based on their insurance requirements. However, it is recommended to estimate the financial needs of your dependents and account for any debts to choose the right sum assured amount.