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Family Life Insurance: Protect Your Loved Ones

Ensure your family's financial security with life insurance coverage. Learn how family life insurance can provide peace of mind.

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A product of ACKO Life Insurance - ARN:ALIL/2023-24/09/001

 Family Life Insurance

Home / Life Insurance / Family Life Insurance in India

What is Family Term Insurance?
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Family Term Insurance is a kind of protection for your loved ones in an event of anything that is not anticipated. It works like this: for the insurance company, you pay a small sum of money regularly, called a premium; and in exchange, the insurance company promises to give a lump sum of money to your family if anything bad happens to you while the insurance is effective.

The primary objective is to ensure that your family is well-off even when you’re not there. Family Term Insurance plays the role of a financial watch-out for your spouse, children, or dependent parents.

Family Term Insurance is a good option in India where family relations are vital. It provides a lump sum, which helps to ease the financial burden on your family. This amount can be used for everyday costs, education, paying off loans, or other critical financial issues. It is one of the practical ways to secure your family’s financial future in India.

What are the features and benefits of Family Term Insurance?
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Following are the features and benefits of Family term insurance.

Comprehensive Coverage: Family term insurance pays your family a lump sum upon your unfortunate death during the policy term. This amount is enough for your family to have a sustainable livelihood even if you are not there to provide it.

Affordable Premiums: It is also noteworthy that most family term insurance tends to have lower premiums. This makes it affordable for low to income groups allowing many families to protect their financial future.

Flexible Payout Options: Most term insurance plans cover family, and many of these are flexible on payout options. Your family can receive the sum assured as a lump sum or instalments, depending on the financial situation.

Add-On Riders: There are many additional riders offered by insurance providers that can enhance your cover. In this case, common riders are the accidental death benefit, critical illness cover, and disability riders. They can be specifically designed to suit your individual needs.

Tax Benefits: Tax benefits under section 80C of the Income Tax Act are also part of family term insurance plans in India. Your premiums are deductible, and so you are able to protect yourself and save on taxes at the same time.

Policy Term Options: Family term insurance policies come with a number of policy term options. You have the freedom of selecting a term that will match your financial plans and the needs of your family and ensure that they are insured for the desired period.

Grace Period: Life can be unpredicted and that insurance companies know that. Most family term insurance plans have a grace period wherein you are given an additional time in paying the premiums without losing the benefits.

What are the different types of Family Life Insurance plans in India?
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When choosing a family life insurance plan, it's important to consider your family's financial needs and goals, as well as your budget. There are several types of family life insurance plans available in India, each with its unique features and benefits. Here are the most common types.

This type of plan provides coverage for a specific period, usually between 5 to 30 years, and pays out a lump sum to the beneficiaries if the policyholder passes away during the term. It is an affordable option and is suitable for young families with limited budgets.

This plan combines life insurance with savings, providing both protection and a lump sum payout at maturity. It is a good option for those who want to save for a particular goal, such as their child's education or marriage.

3. Joint Life Insurance

Joint life insurance plans provide life insurance coverage to two or more individuals under a single policy. These plans are ideal for couples, business partners, or other family members who want to insure their lives together. This policy pays out a death benefit when one of the insured persons passes away.  The policy remains in effect as long as there is more than one surviving insured person. The death benefit is usually paid to the surviving insured person or their nominee, depending on the policy's terms and conditions. Joint life insurance plans offer several benefits, including lower premiums compared to two separate policies and the convenience of managing only one policy.

This type of plan provides lifelong coverage and pays out a lump sum to the beneficiaries upon the policyholder's death. It also has a savings component that accumulates over time and can be used for various purposes, such as paying premiums or taking a loan.

This plan provides periodic payouts during the policy term, along with a lump sum payout at maturity. It is an excellent option for those who want to receive regular income during the policy term.

This plan provides both life insurance coverage and investment opportunities. The premiums paid are invested in the stock market, and the returns are subject to market fluctuations.

Acko Life Flexi Term Plan
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Experience unparalleled control over your financial security with the ACKO Life Flexi Term Plan. This uniquely customizable solution allows you to shape the plan according to your family's distinct needs and your evolving aspirations. Whether you wish to amplify or reduce coverage, tweak the plan's duration, or adjust the premium payment schedule, this plan seamlessly accommodates the ebb and flow of your life stages.

As an added convenience, our inclusive will creation service ensures that your legacy and assets are managed precisely as you envision. Specify the recipients and allocations, granting you peace of mind that your family will be well cared for according to your exact wishes.

The ACKO Life Flexi Term Plan transcends traditional insurance; it's a dynamic and tailor-made solution crafted to adapt to life's twists and turns. Empowering you to safeguard your family's financial future, it offers the flexibility and control to make it uniquely yours.

Choose a plan that grows with you—ACKO Life Flexi Term Plan, where financial security meets personalized adaptability.

How to decide on the life insurance plan?
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Deciding on a life insurance plan in India is a critical decision, but not to worry, we shall make it simple for you. Here is your step by step guide to easy rules of life insurance in India.

Figure Out Your Needs
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First of all, start thinking about what you need. You should also look at your family’s financial needs, any money you might have borrowed, and what you need to plan for in the future. By doing so, you will understand the amount of cover you should have.

Know Your Insurance Types
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Life insurance in India comes in two main types: term insurance and life insurance. Term insurance covers you for a specified period, while whole life insurance covers you eternally. Know these ones to pick one that can suit you.

Do the Math for Sum Assured
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The sum assured is the money that your loved ones get in case you die. Work this out on how much you need for your family. You can calculate by using online calculators or experts.

Enhance it with Riders
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Consider riders as additional toppings on a pizza, which improve it. Riders, such as critical illness or accident coverage, may be added by riders to your policy. Choose those that suit you.

Shop Around for Prices and Features
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Insurance companies differ in terms of the price and features. Be careful of choosing an affordable yet comprehensive package. Look out for any specific clauses or regulations that may affect your decision.

Read the Fine Print
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Ensure that you have understood the policy document thoroughly before committing. Ensure you understand and are aware of everything including conditions and exceptions as required. In case you have questions, ask your insurance company.

How much life insurance do you need?
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Now, let us examine how to buy an appropriate life insurance cover for you. Here are the features to consider.

Income Replacement
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Now, imagine what amount of income will be able to support the family without you. Generally, a good yardstick is to take a multiple of your annual salary of between ten to fifteen times.

Liabilities and Debts
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You have pending loans like house loans or car loans or any other financial debts and liabilities, list them. Ensure that the policy is comprehensive enough to avoid burdening the family with the financial debts.

Education Expenses
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You should also take into account the expenses of educating your kids. However, make sure your life policy covers all these necessities including school fees to higher studies to safeguard the future of your life.

Daily Living Expenses
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Add up your family’s usual daily expenditures including food, electricity, etc. Ensure that they have enough life insurance to sustain their lifestyle.

Medical Costs
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Consider potential medical expenses. Moreover, health insurance could be able to pay your medical bills, an additional amount of money in your life insurance can add a few bucks more.

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Consider inflation as well since the price level goes up within a certain period. Life insurance should be adaptable to inflation.

Special Needs
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Think about extra expenses your special needs dependents may incur.

Existing Savings and Investments
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Subtract your current savings and investments to find the total coverage. You are also protected from overinsurance and unnecessary premium amounts.

Benefits of Family Life Insurance
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Family life insurance provides several benefits to the policyholder and the beneficiaries. Here are a few examples.

Financial security
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Family life insurance provides financial security to the policyholder's family in case of the policyholder's untimely death. The lump sum payout can help cover expenses such as outstanding debts, and other financial obligations.

Protection against debt
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If the policyholder has outstanding debts such as a mortgage, car loan, or personal loan, family life insurance can help pay off those debts, ensuring that the family's financial future is not burdened by debt.

Supplemental income
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In case of the policyholder's death, the lump sum payout from the policy can act as a supplemental income for the family, providing them with financial stability during a difficult time.

How much does Family Life Insurance cost?
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The cost of family life insurance will depend on several factors, including age, health, and the coverage you need. Generally, Term Life Insurance policies are less expensive than Whole Life Insurance policies. You can get quotes from different insurance providers to compare prices, features, and services and ensure you get the best policy at the best price.

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What happens if you pass away without Family Life Insurance?
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If you pass away without family life insurance, your loved ones may face financial difficulties. They may struggle to cover funeral costs, outstanding debts, and ongoing living expenses. This can significantly strain your family and may even force them to sell assets or downsize their lifestyle.

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How to choose the right Family Life Insurance Policy
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Here are tips to choose the right life insurance policy for a family.

Understand your family's financial needs
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Before selecting a life insurance policy, assessing your family's financial needs is important. Consider the number of dependents, their ages, future expenses like education, marriage, and the amount of debt you have.

Compare different policies
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There are various types of life insurance policies available in India, such as term plans, endowment plans, ULIPs, etc. Before selecting one, compare different policies and their features, benefits, and premiums.

Choose the right coverage amount
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The coverage amount of your life insurance policy should be sufficient to cover your family's financial needs in case of your untimely demise. Consider factors like inflation, future expenses, and outstanding debts while deciding on the coverage amount.

Consider the premium payment option
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Life insurance policies come with different premium payment options like yearly, half-yearly, quarterly, or monthly. Choose the payment option that suits your financial situation and budget.

Read the fine print
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Before signing the policy, read the terms and conditions carefully to understand the policy's exclusions, limitations, and other important details.

How to apply for Family Life Insurance
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To apply for family life insurance, you must provide personal information such as your age, health history, and lifestyle habits. You will also need to choose the type and amount of coverage you need. The insurance provider will review your application and may require additional information or medical exams before approving your policy.

Factors to consider when choosing a Family Life Insurance Policy
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Choosing a family life insurance policy is an important decision for anyone who wants to secure the future of their loved ones. Here are some factors to consider when selecting a family life insurance policy.

Coverage amount
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The coverage amount is the first thing to consider when choosing a family life insurance policy. You need to calculate how much money your family would need if something happened to you. The coverage amount should be sufficient to cover your family's living expenses, future education expenses, and any outstanding debts.

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The next thing to consider is the premium amount. The premium is the amount you pay to the insurance company for the policy. You need to choose a premium amount you can afford regularly. Make sure to compare the premium rates of different insurance companies before deciding.

Policy duration
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Another important factor to consider is the policy duration. You need to choose a policy duration that aligns with your future goals and financial plans. Some policies offer coverage for a limited period, while others cover the entire life.

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Life Insurance Riders are additional benefits that can be added to your insurance policy for an extra premium. Some riders that you may want to consider are Accidental Death and Disability Riders, Critical Illness Riders, and Waiver of Premium riders. Choose the riders that align with your needs.

Claim Settlement Ratio
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The claim settlement ratio is the percentage of claims settled by an insurance company. You need to choose an insurance company with a high claim settlement ratio to ensure that your family will receive the benefits of the policy in a timely manner.

Reputation of the insurance company
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Lastly, you need to choose an insurance company with a good reputation in the market. Do your research and check the reviews and ratings of different insurance companies before making a decision.

Importance of comparing different life insurance policies
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Here are the reasons why comparing different life insurance plans is a good idea.

Frequently Asked Questions(FAQs)
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Here are some common questions about Family Life Insurance Plans in India.


Can I have multiple family life insurance policies?

Yes, you can have multiple family life insurance policies from different insurance companies, but it's important to ensure that the total coverage amount is appropriate for your needs.

Are there any medical exams required to get family life insurance?

The answer to this question depends on the insurance company and the type of policy you choose. Some insurance companies may require a medical exam to determine your health status and risk factors before approving coverage. However, there are also companies that offer no-exam policies that may be a good option if you want to avoid a medical exam.

Who is a beneficiary?

A beneficiary is the person or entity you choose to receive the death benefit from your family life insurance policy in the event of your death. You can name one or more beneficiaries, and you can change your beneficiary designation at any time.

How long does it take to get family life insurance coverage?

The time it takes to get family life insurance coverage can vary depending on the insurance company and the type of policy you choose. Some policies can be approved and issued within a few days, while others may take several weeks or more.

What is family life insurance?

Family life insurance is a financial safety net that provides protection and support for your loved ones in the event of your passing. It's a policy designed to offer peace of mind by offering a lump sum payment to your beneficiaries, helping them manage financial challenges during a difficult time.

Who can be covered under a family life insurance plan?

Family life insurance typically covers spouses and children, offering a comprehensive solution for the entire family. Some policies may also extend coverage to parents or other dependents, providing a flexible approach to meet your family's unique needs.

What does family life insurance cover?

Family life insurance covers a range of expenses that may arise after the policyholder's death. This includes funeral costs, outstanding debts, and daily living expenses. It serves as a financial cushion, ensuring your family can maintain their lifestyle and meet financial obligations during a challenging period.

Can I customise the coverage amount for each family member?

Yes, many family life insurance plans allow you to customise coverage amounts for each family member. This flexibility ensures that you can tailor the policy to meet the specific needs of each individual, taking into account their unique financial responsibilities.

Can I add additional riders to my family life insurance policy?

Yes, Family life insurance policies often come with the option to add riders for extra coverage. Common riders include critical illness coverage or coverage for specific medical expenses. Adding riders allows you to enhance the protection offered by the policy to align with your family's health and financial needs.

Can I change the coverage amount or beneficiaries over time?

Yes, many family life insurance plans offer the flexibility to adjust the coverage amount and beneficiaries as your circumstances change. Life is dynamic, and your insurance policy should be able to adapt to reflect your evolving needs and priorities.

Is family life insurance tax-deductible?

The death benefit received by your beneficiaries is typically tax-free. It's essential to consult with a tax professional to understand the specific implications based on your individual circumstances.

Disclaimer The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet, and is subject to changes.