There are many aspects of financial planning that one has to consider in order to safeguard the interests of their loved ones. Right from insurance to saving up for retirement or ensuring a child’s safety, the list seems endless. However, family life insurance plans can take care of many of these factors together.

The biggest myth that has been surrounding life insurance for a long time is that it is only meant for the bread winner of the house. Many families have followed this tradition over the years only to realize that life insurance is a vital financial tool for all the members of the family regardless of their earning capacity.

Family life insurance undoubtedly plays a pivotal role in securing the financial future of the individual and their loved ones. Here are some things you should know about family life insurance.

Which Life Insurance Plan Should You Buy for Your Family?

Picking a life insurance policy for your family can depend on multiple factors like the number of people in your family, whether or not you have children, the chances of suffering from a critical illness, and your other investment and savings plans. There are many different options that one can choose from, discussed below are the three most preferred ones:

• Term Insurance
  
  This is one of the most common life insurance plans available to people. Term insurance is a fixed term policy wherein the insured person pays the insurance company a specific pre-decided premium for a particular period of time. In a term insurance plan, you can decide on the duration of the term, the sum assured, and the frequency of premiums as per your requirements. In the unfortunate occasion of the insured person’s demise within the term period, the sum assured (also known as the death benefit) is paid to the family.

  You can also add specific riders for a critical illness to your term insurance plan. Such riders can provide a financial cushion in terms of health emergencies due to the said critical illness and cover diagnosis and hospitalization expenses.

• Retirement / Pension Plans
  
  Retirement insurance plans let you save up funds for the golden years of your life. These are similar to pension plans but also offer the benefits of an insurance policy. In retirement insurance plans, an individual pays a premium to the insurance provider in regular intervals or in a onetime payment. This premium can later be claimed as a death benefit by the nominee on the demise of the insured person.

  If the insured individual survives the term, they can also claim the benefits in the form of regular installments that can be used as retirement income, or claim a onetime lump sum payment from the insurance company at the end of the policy term. The term period for retirement plans is usually till the age of 60.

  Retirement insurance plans offer a lot more than just death benefits. They also let you save for your long-term retirement goals and act as an effective savings tool for the later years of your life.

• Child Insurance
  
  Child insurance can be very beneficial in securing your child’s financial future. The funds accumulated in child insurance can be used to pay for the child’s education, wedding, health, etc. In a child insurance plan, parents, grandparents, or guardians can accumulate funds by paying regular or one time premium till the child turns 18. After the child crosses the age of 18, you can either claim the entire corpus or opt for regular installment payments that can provide for the child.

  Child insurance can also be significantly useful for children in the unfortunate event of the parents’ demise. These plans can provide monetary assistance to children to pursue their education or pay towards major life events like marriage, etc.

To sum it up

Life insurance can provide the family with sufficient means to cope with tough times in life. They also act as effective investment or savings tools to meet long-term financial goals like retirement, higher education, etc. If you haven’t considered life insurance for your entire family, now could be the right time to start. Not only will it secure their future, but also enable to you save up for your long-term goals more strategically.