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Family term insurance is a life insurance plan that provides financial protection to multiple family members under a single policy. It offers a lump sum Read more payout to the nominee if the insured passes away during the policy term, helping the family manage expenses like income replacement, children's education, and outstanding debts. A family term insurance plan typically covers the spouse, dependent children, and parents, subject to age and eligibility. It is suitable for those seeking simple, affordable life cover for the entire family. Read less
Family term insurance is a life insurance plan that provides financial Read more protection to multiple family members under a single policy. It offers a lump sum payout to the nominee if the insured passes away during the policy term, helping the family manage expenses like income replacement, children's education, and outstanding debts. A family term insurance plan typically covers the spouse, dependent children, and parents, subject to age and eligibility. It is suitable for those seeking simple, affordable life cover for the entire family. Read less
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Get Life Cover of ₹1 Crore by paying a premium of
₹7,085/month (for 30 years)
₹8,287/month
Save ₹1,202 with discounts
Includes 10% digital + 8.5% salaried discount on 1st year premium
Excludes GST
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Tata AIA Life Insurance Sampoorna Raksha Promise (A Non-Linked Non-Participating, Pure Risk, Individual Life Insurance Plan) • UIN: 110N160V7
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Family term insurance is a type of life insurance plan that provides life cover to your entire family under a single policy. It offers a lump sum payout to the nominee in case of the policyholder’s unfortunate demise during the policy term, helping to secure the family’s future needs.
A term plan for the family offers financial protection to the insured person's family.
If the insured passes away during the policy term, the family receives a lump sum payout.
There are no survival benefits if the insured outlives the policy term, unless they have opted for a Return of Premium (ROP) benefit.
The death benefit payout received by the family is tax-exempt under Section 10(10D) of the Income Tax Act. As a result, the entire payout amount is received by the family without any tax5 deductions, subject to applicable tax rules.
The sum assured amount, policy duration, and policy premium are all decided at the time of purchasing the policy. These factors cannot be changed later and will remain the same throughout the policy's duration.
Term insurance plans are often called pure life insurance policies. This is because they are designed to provide financial security in the form of a death benefit to the nominee or the insured's family in the event of their death during the policy term. A family term insurance plan will function the same way, where the policy nominee will get a sum assured payment if the insured family member passes away during the policy term.
Riders6 are additional benefits purchased separately to increase your family term plan coverage. Insurers offer different riders to customise a policy according to your family's lifestyle and requirements such as: Critical Illness cover, accidental death, disability, waiver of premium rider, and hospicare rider.
The premium rates of family term life insurance plans are affordable than other life insurance policies when you take into account the substantial coverage they provide.
Insurers allow you to choose your preferred policy tenure so you can determine how long you want the policy to last. Most family term plans offer flexible policy terms between 5 - 40 years and allow you to renew or switch to whole-life coverage.
Like policy tenures, you can choose from various premium payment modes. For example, at Tata AIA, we offer Single/Annual/ Half-yearly/ Quarterly/ Monthly premium payment modes under most of our life insurance policies.
Term plans for families offer a large sum assured as a death benefit. So, they’re helpful to settle liabilities like debt or loans, so your family does not have the responsibility of paying them in your absence.
Tata AIA
Non-Linked, Non-Participating, pure risk, Individual Life Insurance Product (UIN:110N176V07)
Tata AIA
Non-Linked, Non-Participating, pure risk, Individual Life Insurance Product (UIN:110N171V011)
Financial emergencies like an untimely death or critical illness can exhaust your family's savings. In these cases, the suitable life insurance policy for your family would be critical illness insurance, as it can help cover these sudden expenses.
For example, a family term plan with a critical illness cover can be beneficial if your family medical history makes you prone to specific health conditions or critical illnesses. The sum assured payment from the critical illness rider could help cover treatment costs on diagnosis and allow you to get the proper medical help you need.
Family term insurance policies are pure life term plans. This means when you pass away, your family will be provided a substantial lump sum payment upfront from the insurer. This payout can compensate the loss of income for your family if you are the sole earner of your family.
Today, several family term insurance plans come with the option to increase the sum assured by a certain percentage at important life events like marriage, the birth or adoption of a child, securing a home loan, and so on.
Moreover, term plans like increasing term plans allow for the gradual increase of the sum assured amount by a certain percentage on policy purchase and are a suitable option to manage inflation and increased living costs.
Generally, families are accustomed to certain lifestyles and have unique needs and living expenses that must be covered. In other words, their needs and goals are often aligned with the income earned.
However, when an earning member of a family passes away, family term insurance benefits allow the surviving members to maintain their standard of living as the sum assured amount is often substantial enough to support them.
When one or both the earning members of the family pass away unexpectedly, the children are left without any income source to support their growth. Here is where a family term insurance plan can be beneficial.
The sum assured/death benefit received from the term policy can ensure that your children's education and life goals are not affected, even after your demise to provide for them. Hence, a family term plan can also be purchased bought in later stages of life to secure your child's future.
Family term insurance plans make you eligible for tax# deductions of up to ₹1.5 lakhs under Section 80C for annual life insurance premium payments. You may also be eligible for deductions under Section 80D if you have opted for health insurance riders on your term plan.
Moreover, the death benefit payouts and any maturity benefits are always tax-exempt under Section 10(10D) for life insurance policies.
Type |
Key Features |
Best For |
Limitations |
Level Term Plans |
Premium and sum assured remain fixed throughout the policy term Nominee receives a lump sum payout if the insured passes away during the policy term. |
Those looking for affordable, simple life cover |
No survival or maturity benefits |
Increasing Term Insurance |
Sum assured increases by a fixed percentage or amount every year, offering better protection against inflation and rising expenses. |
Families wanting protection that grows over time |
Higher initial premiums and no survival or maturity benefits |
Decreasing Term Insurance |
The sum assured reduces every year, making it suitable for covering loans or other decreasing liabilities. Premiums are affordable and remain fixed during the policy term. |
Individuals with reducing financial obligations like loans |
The cover amount may not be enough for general family protection or unexpected expenses |
Return of Premium (ROP) Term Insurance |
Provides both a death benefit for the nominee and a refund of all premiums paid if the insured survives the policy term. |
Those seeking both life cover and a savings component |
Premiums are relatively higher compared to basic term plans |
Convertible Term Plan |
Allows you to convert it into a life insurance or endowment plan later, offering greater flexibility in different circumstances. |
Individuals looking to mitigate future risks, uncertainties, or possible health issues later in life. |
Premiums are slightly higher |
Each type of family term plan suits different needs—level plans for affordability, ROP plans for savings, and convertible plans for long-term flexibility.
The most important factor in family term insurance policies is the coverage or sum assured amount
This is the amount your family will receive in the event of your death, so it is important to determine whether this amount will compensate for their future financial requirements.
Keep in mind that higher coverage also means higher premiums. Ensure that you strike a balance between getting adequate coverage and a premium rate that aligns with your financial constraints.
The CSR is the percentage of claims settled against the total number of claims received by an insurance company in a fiscal year. For reference, Tata AIA's Individual Death Claim Settlement Ratio (CSR) for FY 2024 - 2025 was 99.41%.
While it should not be the sole deciding factor as the CSR does not give you the whole picture - the higher the CSR of an insurer, the more likely it is that they will accept and settle your claim in a timely manner. Hence, buying a family term policy from an insurer with a high claim settlement ratio is recommended.
Always check what riders6 and add-on covers the insurer provides under the family term policy. This will give you a good idea of how much potential coverage you can receive under the policy and the policy's customisability.
Some important riders you should consider getting include waiver of premium, return of premium, hospicare, accidental death, and accidental total and permanent disability. If your family medical history suggests that you may be prone to certain health conditions, getting a critical or terminal illness cover would be beneficial.
A term policy's primary purpose is to provide financial security in the event of an untimely death. This means the insurer must have a quick and efficient claims settlement process to ensure your family members receive their payments on time.
Always check the insurer's website for an overview of their claims procedure and if they provide paperless processes. Moreover, policy ratings and customer reviews should also be considered before buying a family term policy.
Insurers also provide additional benefits (other than riders) under their term policies, like premium holidays, special exit benefits, life stage benefits, special discounts for women, etc.
These will vary across insurers and term policies, so always check policy terms to any if you are eligible to claim any additional services, benefits, or discounts under the family term policy.
Going through the entire policy terms can be difficult and lengthy. However, you should not avoid it, as it may lead to issues when settling future claims.
Going through the terms and conditions will also give you a better understanding of the policy's features, base coverage, and any key exclusions that you need to check. This will also help determine whether the particular family term policy is suitable for you.
Most online life insurers like us at Tata AIA allow you to compare different term insurance plans on their website. This is an important step as it allows you to compare policy benefits and quotes to help you make an informed decision.
You can use Tata AIA’s term insurance calculator to compare different family term plan premiums on our website to see which plans provide the best value for money.
Let us see why Tata AIA is a good choice for you to buy term insurance:
Tata AIA understands the diverse needs for women. Hence, they have rolled out exclusive benefits for them with Shubh Shakti, which includes:
Under health buddy Enhance, women have the multiple benefits such as Annual health check-up, Lifestyle & Condition Management, Women Care, Wallet for Vaccinations, Medicines, Tests & Spectacles Benefit & Specialist consultations.
Get access to a specially curated annual comprehensive health screening that goes beyond the usual tests. This includes: Full body health check-ups to detect hidden risks early. Dental wellness checks to maintain oral hygiene. Women-specific screenings like PAP smear to detect cervical cancer risk, anaemia tests to monitor iron levels, and PCOS tests for hormonal balance, ensuring complete preventive care tailored for women.
Structured programs to help you manage chronic conditions and lead a healthier lifestyle:
PCOD management programs with diet, exercise and stress control guidance. IVF counselling to help you understand fertility options and make informed choices
Stay protected against major health risks with a dedicated wallet that helps cover:
Attractive discounts on medicines, lab tests, and spectacles.
Cashless or reimbursement options that reduce your out-of-pocket expenses on these routine health requirements.
Get priority access and easier consultations with top doctors across specialties that are important for women’s long-term health, including:
Orthopaedics (for bone & joint health), Endocrinologists (for thyroid, diabetes & hormone issues), Neurologists (for brain & nerve health), Urologists (for urinary concerns), Diabetologists and Cardiologists to comprehensively safeguard your health.
A family term insurance plan is the best form of risk mitigation for life's uncertainties. If you are the sole earner in your family, then having a family term plan can give you peace of mind, as your family members will receive a substantial payout if the unexpected were to happen. Here are some key reasons why you should consider getting family term insurance if you are the family’s primary income earner:
The insurance payout can act as a form of income replacement and can help manage expenses and living costs.
It can help your family maintain their current lifestyle without the need to change their current standard of living due to a loss of income.
The sum assured can take care of existing financial liabilities so your family does not have to pay off any unpaid debt or loans in your absence.
The death benefit/maturity payout can help manage your dependents' expenses, your children's education, and your family's healthcare needs, if any.
Most family term plans offer critical and terminal illness covers that offer their own sum assured payouts on diagnosis at different stages of the insured illness so you can cover your medical expenses.
The death benefits for term plans are always tax-free, while the maturity or survival benefits may or may not be taxable depending on your premium rates and current tax laws.
Yes, anyone can buy a term insurance policy for their family as long as they meet the insurer's eligibility requirements. Hence, a housewife or any dependent family member can purchase a family term insurance policy to facilitate the smooth functioning of their family in their absence.
Here is how a family term plan can be beneficial when purchased by a dependent family member:
Security Against Uncertainty
There is no significant difference in the mortality rate between genders, and no one can predict the future. Housewives and dependents can secure their family's financial needs with a family term insurance plan in their absence.
Increased Life Cover
If the sole earner already has a comprehensive term insurance plan and cannot secure a larger amount for their family, buying a family term plan under the housewife's or dependent's name can increase their overall life coverage.
Let’s understand the family term insurance for a housewife with an example:
A husband has a term insurance policy with a sum assured of Rs. 50 lakh. However, he is unable to increase the cover due to income eligibility restrictions. In this case, his wife, who is a homemaker, can buy a family term insurance plan with a sum assured of Rs. 25 lakh. This way, the family's total life cover increases to Rs. 75 lakh, providing better financial protection.
To buy a family term insurance plan online, visit the insurer’s official website, select the plan, fill in personal details, upload KYC documents, and complete payment.
Here is how you can purchase a family term insurance plan online:
What is the difference between individual and family term insurance?
The key difference between individual and family term insurance lies in the following aspect:
Aspect |
Individual Term Insurance |
Family Term Insurance |
Coverage |
Covers one person |
Covers multiple family members |
Premium |
Based on one person's profile |
Based on all insured members |
Suitable for |
Self-protection |
Combined family protection |
Sum Assured |
Fixed for the insured person |
Can be individual or combined |
Which is the best life insurance policy for a family?
The best life insurance policy for a family depends on your needs. Level term plans offer affordable fixed cover, return of premium plans provide life cover with savings, while convertible term plans offer flexibility to switch to other policy types later.
Who can be covered under family term insurance?
Under a family term insurance plan, the following members can typically be covered, subject to the insurer's eligibility conditions:
Does family term insurance cover all members?
No, not all family members are automatically covered unless they are specifically included under the policy. Some plans require separate underwriting for each member, while others may offer a joint life option for covering spouses under the same policy.
Can term insurance be purchased for an individual or a family?
Yes, term insurance can be purchased either individually or for a family under a joint or family floater plan.
Individual term insurance covers one person, with premiums based on their risk profile.
Family term insurance covers multiple members under one policy, offering joint coverage.
Can a husband and wife be covered under a single-term insurance policy?
Yes, many insurers offer joint life term insurance plans for spouses, providing shared coverage under one policy. This often results in premium savings and simplifies policy management for couples seeking combined financial protection.
How much coverage is required for a family of four members?
A simple rule of thumb is to have coverage worth 10–15 times your annual income. For example, if your annual income is Rs. 10 lakh, aim for Rs. 1–1.5 crore in coverage to protect your family.
What should be the sum assured required for my family?
To calculate the required sum assured, consider your family's future expenses, outstanding liabilities, and financial goals. Adding these factors helps ensure sufficient coverage to meet all needs in your absence.
How to decide the policy tenure for my family term insurance?
Step 1: Estimate your age until you have financial responsibilities.
Step 2: Consider your planned retirement age.
Step 3: Consider your children’s key milestones, like education and marriage, to determine policy duration.
Can riders be purchased for term insurance for a family?
Yes, usually family term insurance plans offer optional riders such as Critical Illness, Accidental Death, and Waiver of Premium.
What are the benefits of family term plans?
Family term plans offer comprehensive protection, including:
Affordable premiums for multiple members
High overall life coverage
Tax benefits on premiums and payouts
Simplified policy management
Financial security for the entire family
Can I take a loan against term insurance for my family?
No, you cannot take a loan against pure term plans as they offer no cash value. However, some ROP-based or endowment-type term plans may allow loans, subject to policy terms and conditions.
Can term insurance be purchased for a senior citizen?
Yes, some insurers allow seniors up to 65–70 years to purchase term insurance. However, it often comes with limitations such as mandatory medical screening, higher premiums, and lower policy tenure.
Can a term insurance plan be revived?
Yes, a lapsed term plan can usually be revived within 2–5 years, depending on the insurer. Revival typically requires submitting documents, paying overdue premiums with late fees, and undergoing medical tests if requested by the insurer.
Is family term insurance necessary if I am the sole breadwinner?
Yes, it is highly recommended if you are the sole breadwinner. Family term insurance ensures income replacement, protects against outstanding debts, and secures your children’s education and future financial needs in your absence.
Who should buy family term insurance?
Family term insurance is best for those who are:
Sole earners supporting their family
Parents with dependent children
Married couples seeking joint financial protection
Want affordable life cover for multiple members
Can a husband and wife be covered under a single-term insurance policy?
Yes, many insurers offer joint life cover or term insurance for couples, allowing both husband and wife to be covered under a shared policy. This provides combined protection with simplified management and potential premium savings.
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