Life assurance should be an important part of the family’s financial planning. A family may be financially devastated with the death of the breadwinner. Remember, there will be a lot of needs that should be met: Life assurance products.
The family’s daily needs, including food, clothing and so on
Mortgage or rental payments
The children’s college education
Payment of other major debts
Family life insurance comparison
Here are some life assurance products that can help the family provide for these needs:
This covers only one life. This is ideal for the breadwinner. This aims to replace the breadwinner’s lost income upon his death. When this cover is bought as an endowment, this can also double as the retirement fund if the insured has survived at the time of the policy’s maturity.
It is important to remember that if the family is a two-income household, the loss of income of one will greatly affect the family’s resources. However, not all families can afford two single life assurance policies. What they can get is a joint life assurance policy, where the payout will be given upon the death of any of the insured. This means that when a spouse dies, the other spouse and the children will receive the death benefit and use it to provide for the family’s needs. Even if one spouse stays at home to watch after the kids, the loss of this spouse will still have a financial impact on the family.
This provides two in one coverage – life two single life policies in one. If one spouse dies and the other spouse receive the insurance payout, this will not affect the coverage of the surviving spouse. If both spouses die at the same time, their children will be paid two death benefits, one for each spouse. A dual life assurance policy has an added advantage of being cheaper than getting two single life policies because only one policy fee is charged.
This policy cover a specified number of years and if the insured dies within that time, his beneficiaries will receive a death benefit which will be paid out on a monthly or quarterly basis (not as a lump sum). If the insured survives the coverage period, he receives the guaranteed maturity benefit.
This policy is based on a specified date, which is called the deferred date. The period between the policy start date and the deferred date is the payment period. The life insurance actually starts after the deferred date. When the child dies before the start of the coverage, the premium becomes returnable to the parent. If the parent dies before the deferred date, no further premiums will be charged.
Education endowment with life assurance.
This is an endowment plan that is designed to have funds by the time the child is ready for college. Depending on how the product is designed, it may also provide cover for either the life of a parent or of the child.
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