What is Family Protection Insurance?

All of us want to live a happy life, and to see our loved ones smiling is a priority for most of us. But have you ever imagined what would befall your family if you were to leave this earth before your time?
 

If a family loses its earning member, they can face a massive financial challenge. Therefore, people choose a life insurance policy. There are several types of life insurance, and together, they comprise family life insurance.

If you want to know more about family life insurance, this is the right space for you. Read this article as it describes the importance and benefits of having a family protection plan.

What is Family Protection Insurance?

More than finances, life insurance is about emotional concern. We all desire a healthy and long life with our loved ones. Despite our desires, life can throw a curveball at us. This is where having a safety net makes sense.

One may argue that there is nothing that can save us from life’s uncertainties. It is probably true, but we can certainly plan a soft landing. If a person dies before his time, he can make some financial planning to keep his family secure, and a life insurance plan is a crucial part of it.

Losing a loved one is irreparable damage, but one requires money when it comes to materialistic needs and sustenance.  In this regard, having a life insurance policy is nothing short of a blessing.

A family protection plan insurance is a life insurance plan that covers the entire family. These plans do not include only life insurance plans. Several other types of insurance plans come under the umbrella of a family insurance plan.

We have discussed the types of family protection insurance policies in detail later.

Importance of Family Protection Insurance: Why Do We Need It?

Now that you have a basic idea of what a family protection plan is, let us know why it is important to have one:
 

• It offers financial stability
  If the earning member or the policyholder meets with an untimely death, the insurance cover will help the family members financially to continue their lifestyle.
• Helps you meet critical expenses
  The best part of a family protection insurance policy is that it not only offers life coverage but also comes into play at different crucial stages of life. Certain plans offer a lump-sum payment during retirement. You can also buy an insurance policy for the future of your child.
• Pays in the hour of need
  The payout of a life insurance cover often helps families meet medical expenses. Apart from that, if there are any legal service charges, debt payments, or loan repayment, one can use the life insurance payment to cover such expenses in the absence of the earning member.
• Retirement planning
  Family protection insurance includes retirement plans. These policies work toward securing your post-retirement life.
  
• Pays for your child’s education
  Want to save for your child’s future? You can choose a family protection insurance policy that will work toward building a fund for your children’s education if you die before their schooling is complete.

Benefits of Family Insurance Policy

Since there are different types of plans in family insurance, they serve different purposes. Here is a list of benefits that a policyholder will be able to reap from family insurance policies:
 

• A family protection plan ensures that your family is financially secure in your material absence.
• There is a host of coverages like maturity benefits, return of premium, child’s education coverage, and so on.
• Some plans pay double payout twice on the same policy: the first payment can be a death benefit when one of the policyholders dies. If the other partner dies, there will be another payout that the children will receive.
• Policyholders may qualify for tax* benefits for paying the insurance premium under relevant tax laws.

Types of Life Insurance for Family

A family protection plan consists of the benefits of different types of plans under one umbrella. Here are the types of family protection plans you can choose.

• Term Insurance Plans: It is one of the most popular insurance plans that offer a payout in case the policyholder meets with an untimely death.
• Retirement Plans and Pension Plans: A pension policy is an essential part of retirement planning, and this type of plan ensures you have a stable income after retirement.
• Return of Premium or Money Back Plans: These types of policies not only insure your life but also work towards offering you money back. These returns are often paid at regular intervals after an agreed-upon period.
• ULIPs^#: This is probably the most unique insurance plan that clubs investment with insurance. A part of your premium goes toward investment, while the remaining part of your premium goes towards life insurance. This is a good wealth-creation tool.
• Child Insurance: Purchasing a child insurance policy ensures that children are financially taken care of in the absence of their parents.

What All is Covered in Family Protection Plans?

The exact coverage scope of a family protection insurance plan may vary for different insurers. As we have seen above, there are different types of plans available that offer varied benefits, like death benefits, child protection, income protection benefits, critical illness cover and so on.

You can refer to the policy details to understand the coverage scope of a plan of your choice. If it meets the insurance requirements of your family, you can conveniently opt for the plan.

How to Choose the Right Life Insurance Plan for My Family?

Choosing the right family life insurance plan is crucial but not very difficult. All you have to do is to take care of some pointers.

• First, you have to determine when you should buy family insurance. The ideal time to buy a family health insurance plan is right after you have a family.
• Second, you need to determine the purpose of the insurance policy. Choose the adequate sum assured by calculating your lifestyle expenses, future expenses, debts and liabilities. Make sure the sum assured will be sufficient for your family’s future needs.
• Now, you have to figure out if the policy is affordable.
• After you have decided on the sum assured and all other benefits, it is time to take a look at other offerings — compare plans to find the best insurance plan that suits your needs.
• Always choose a reliable insurance provider to secure your family.

Conclusion

People who love their families always try to do the best for them, and securing their family's future is always at the top of their list. That is why choosing the right family insurance plan is important. If the policyholder meets with an untimely death, the family protection insurance can take care of the family financially.