Term Insurance For Family

We live in a fast-paced and progressive world where the possibilities are endless, and so are the uncertainties. Whenever unfortunate circumstances arise, your family may be left in a devastated state. Especially if you have dependents who completely rely on your income, your sudden demise will put them in a financial bind.
Therefore, it is essential to be prepared always. To protect your family financially and to provide a strong backup for them, it is crucial to make wise financial decisions, so they don't have to suffer in your absence. Term life insurance is one of the best ways to secure the financial well-being of your family, especially if they are entirely dependent on you.
How does it help you protect your family? Let's take a look.

What Is Family Term Insurance?

Family Term Insurance is a key element in a robust financial strategy, ensuring a secure future for your loved ones. Unlike some other insurance choices, term insurance is designed specifically to offer a clear and simple life cover. This makes term insurance an essential tool for protecting your family from life's uncertainties.
In simple terms, it is a contract between you and the insurer. On the unfortunate event of your passing occurs during the policy term, the insurer commits to paying a predetermined sum, known as the death benefit, to your chosen nominee. This amount acts as a financial safety cushion, ensuring your loved ones are financially protected.
The core advantage of term insurance lies in its simplicity and affordability, making it an accessible choice for those aiming to secure their family's financial future. And, what makes term insurance stand out is its flexibility. You have the freedom to customise the coverage amount, policy duration, claim payout option, etc. according to your family's specific needs and financial objectives. This adaptability ensures that your family's unique circumstances are considered, making term insurance an asset on the journey to a well-protected future.

Features Of Family Term Insurance

Family Term Insurance comes with some important features you should be aware of –

1️. Death Benefit
This is the core feature of term insurance. If something unfortunate happens to you during the policy period, your family receives a sum of money known as the death benefit. You get to decide how this benefit is paid out, depending on the option you choose when you start the policy. Here are some options to consider –

• Lump-Sum:
  The entire claim amount is deposited into your family member's bank account at once. This option generally works well if you have any outstanding loans or debts to settle.

• Monthly Income:
  With this option, the claim amount is paid out to your family in fixed monthly payments for a specific period. If your goal is to support your family's day-to-day needs or in case you don’t have debts which needs immediate payouts, this could be a good choice.

• Lump-Sum With Monthly Income:
  This option combines the first two. This means that a part of the claim amount goes towards clearing debts, while the rest is paid out to your loved ones as monthly income for a certain duration. It helps your family manage financial responsibilities after you are no longer available to provide for them.

2️. Customisable
One great thing about term insurance is how you can customise it to suit your and your family’s unique needs. Here are some ways you can customise your policy -

• Payment Frequency:
  With the payment frequency option, you can choose how often you want to pay your premiums – monthly, quarterly, annually, and so on.

• Payment Mode:
  Decide if you want to pay your premiums all at once (Single Pay), over a limited time (Limited Pay), or regularly over the policy term (Regular Pay).

• Claim Payout:
  You can choose how you want your family to receive the money if something happens to you – monthly payments, a lump sum, a mix of both, etc.

3️. Exciting Add-Ons
Another interesting feature about term insurance is the option to add extra benefits called riders, and this coverage kicks in during specific situations. For instance, if you are diagnosed with a serious illness listed in the policy, a critical illness rider pays your family a sum of money. This cash can cover extra medical costs or replace lost income to support your family.

Other popular riders include accidental death benefit rider (UIN:109B023V02), accidental death and disability rider (UIN: 109B018V03), and waiver of premium rider (UIN: 109A039V01). These riders add even more value to your policy, giving you extra peace of mind.

4️. Enhance Protection With Increasing Cover
This feature lets you increase your coverage gradually over time, without needing to buy multiple term plans as your life responsibilities increase. Depending on the policy you choose, there might be a limit on how much your cover can increase, like doubling or even going up to 2.5 times the base cover. Also, there could be a limit on how long this increase lasts, such as 10 or 15 years. These increases often happen at significant life moments, like marriage or birth of children.

5️. Decreasing Cover
In contrast to the increasing cover, the sum assured decreases gradually after a set period in decreasing cover. The reduction will continue until it reaches a maximum limit, usually a certain percentage of the base cover. As you get older, your financial obligations might lessen. So, the need for a large sum assured also decreases. If you anticipate paying off loans or debts soon, this feature could be a good fit.
For example, if you are a single mom with a loan for your child's education, a decreasing cover can suit your circumstances well. If something happens to you while the plan is active, the insurer pays the decreased sum assured to your family. This means that they can use the payout to clear the loan or debt.

Benefits Of Family Term Plan

➔ It Comes With Affordable Premiums
Term insurance is known to be the simplest and cost-efficient life insurance plan. Its premiums are lower compared to other types of life insurance. The reason for this affordability is that term plans do not include an investment component, which means they do not offer maturity or survival benefits. As a result, you can get term insurance for your family at a very reasonable cost, without straining your finances.

➔ It Acts As An Income Replacement
Term insurance is pure risk cover. It serves as a financial safety net for your family in the event of your untimely demise. If you are the primary earning member of your family and on your sudden demise, term insurance can help cover your loss of income. The term insurance payouts your family will receive in case of your untimely demise can help cover regular expenses like grocery bills, electricity bills, etc.

➔ It Helps Maintain Your Family’s Lifestyle
You and your family are likely to be accustomed to a certain standard of living. In your absence, a term insurance policy will ensure that your family doesn’t compromise on their standard of living. The term insurance claim amount your family will receive will help your family maintain the same lifestyle after you are not around anymore.

➔ It Helps Fulfil Your Child’s Dreams And Goals
If you have kids, they may have certain dreams and aspirations - they may want to become a doctor or a cricketer when they grow up or go abroad to receive education in a renowned university, etc. If you pass away unexpectedly, they would be left without a source of income to support their dreams. This is when term insurance can come in handy. It can help ensure that your children don’t give up on their dreams in your absence.

➔ It Covers Loans/Liabilities
You may have taken loans such as a home loan to buy a home, an education loan for your child, etc. These loans can become a huge burden for your family if you pass away before settling them. A term insurance policy can protect your family financially in your absence by covering these loans.

➔ It Offers Global Coverage For Death
Another benefit provided by term plans is that they cover death globally. The only exception is suicide within the first year of purchasing the policy. Apart from that, term insurance covers all types of death worldwide. This means you can have peace of mind, knowing that your family can claim the amount if anything unfortunate happens to you during the policy term.

➔ It Promises Dual Tax Benefits
Term insurance offers tax advantages as the premium you pay and the claim amount your family receives. These benefits are available under different sections of the Income Tax Act of India, 1961. Under Section 80C, you can enjoy tax deductions up to Rs. 1,50,000 for the premiums paid annually for your term insurance. Additionally, the term insurance claim amount your family receives in the event of your passing during the policy term is exempt from tax under Section 10(10D)^#. This means you not only secure your family's future but also enjoy tax benefits along the way.

A Guide To Selecting The Best Term Insurance For Your Indian Family In 2024

Here are some key points to consider when making your decision –

• Assess Your Needs
  Start by understanding your own requirements. Consider your age, income, financial obligations, and the needs of your dependents. By doing a thorough analysis, you can find a policy that provides adequate protection for your loved ones in case something happens to you.

• Determine The Right Cover Amount
  Pay attention to the cover amount options available in the plans. The chosen cover amount should comfortably meet your family's needs. It is important to calculate this amount carefully, as it will be the sum your family receives if you pass away during the policy period.

• Choose Your Policy Duration
  The 'policy tenure' is the timeframe during which your insurance coverage stays active. To find the right term, consider your age, financial goals, and how long your family will rely on your income. A simple rule is to subtract your current age from the age you plan to reach your financial goals, retire, or stop earning. This helps you pick a term that aligns with your needs.

• Review Policy Features For Customisation
  Term insurance offers many customisation options to tailor the policy to your family's needs. Take time to carefully examine the features and details of the policy. Look out for additional benefits like riders, which offer extra payouts for events like accidental death, disability, critical illness, etc.

  
  

Also, check if the policy allows you to adjust the premium payment term, premium payment frequency, claim payouts, and if it offers features like increasing coverage, etc. This ensures you get a policy that suits your family's specific requirements.

• Compare Premiums
  Once you have shortlisted your choices, the next step is to compare premium quotes on the web browser Make sure to compare policies that offer the same coverage and features. This way, you can find the right policy that fits your financial budget and also matches your unique needs. You can use a comparison tool that is available online or seek advice from an advisor to make this process easier.

• Secure Your Family's Future With MWP Act
  If you are a married man seeking term insurance to protect your family's future, then you should consider buying it under the Married Women's Property (MWP) Act.

  
  

This is particularly crucial if you have outstanding loans. Let’s assume a scenairo wherein you pass away before clearning your outstanding loans, the claim amount your family receives will first be used to settle them. Only after all loans and liabilities are settled, your nominee will get the remaining claim amount.
By opting for the MWP Act, the claim amount goes directly to your wife and kids. This ensures a smooth and hassle-free process, giving your family the independence to manage finances effectively during challenging times. It is a proactive step that empowers your loved ones in times of need.

• Review The Policy Document Thoroughly
  Before you make your final decision, it is essential to fully understand all the terms and conditions of the policy. Take your time to read the policy documents carefully. Make sure you understand what is included and what is not, and be aware of any situations where claims may not be valid.
  

Once you have checked all the necessary details, you will be ready to purchase the policy that best suits you and your family's needs.

How To Buy Term Insurance For Family Online?

If you are thinking of getting term insurance online, here's how you can do it easily with a few steps –

1. Visit Our Website:
   Start by searching for our website on your preferred search engine.
2. Navigate To Term Insurance:
   Click on the 'All Insurance' tab and find 'Term Insurance.' This will show you all the available plans.
3. Review Policy Details:
   Take a look at policy wordings, brochures, etc., to understand what each plan offers.
4. Choose Your Plan:
   Once you have decided on a plan, select it and enter the required personal details.
5. Customise Your Plan:
   You have the flexibility to tailor the plan to your needs and budget. Choose the cover amount, add riders if necessary, select the policy term, and more.
6. Submit Your Application:
   Click on submit to proceed with your application.

Looking To Buy A Term Insurance Plan?

If you are looking for a term insurance plan with multiple features and customization options, you can consider buying any one of these plans sold by us -

• ABSLI Salaried Term Plan (UIN: 109N141V01)
  The ABSLI Salaried Term Plan (UIN: 109N141V01) is a complete protection solution tailor made for salaried individuals. This plan empowers you to customise your protection according to your needs. With options like lumpsum cover and monthly income cover, it caters to various aspects of your life, whether it's education, lifestyle, or daily essentials. Designed as a pure risk term plan, it ensures steadfast financial support for your family, enabling them to face the future with confidence, even in your absence.

• ABSLI DigiShield Plan (UIN: 109N108V11)
  The ABSLI DigiShield Plan (UIN: 109N108V11) provides your loved ones with financial protection in the event of your unexpected death. This plan offers several features - sum assured reduction option, increasing cover, whole life coverage (covering up to 100 years of age), maturity benefit with a return of premium option, and riders (accelerated critical illness rider (UIN: 109B019V03), accidental death benefit rider (UIN:109A024V01), accidental death and disability rider (UIN: 109B018V03), etc.).

Wrapping up!

Term insurance is one of the most sought-after ways to protect your family's financial future. You are responsible for the emotional and financial well-being of your family. Should something unfortunate happen to you, a term plan can assist your family in achieving their goals. Before buying the policy, make sure it aligns with your needs and preferences.