How a Term Insurance Plan Can Be Beneficial for Your Family ?

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The biggest concerns for most of us are always about the people we have familial ties with. This distress is magnified in case of a breadwinner who is responsible to provide for everyone. In a situation like this, the constant thought of your family getting into financial trouble in the event of your untimely demise can cause a lot of stress. Term insurance is a smart and affordable financial alternative that can help in taking this burden off of your shoulders. Term insurance for your family is meant to offer financial support to your dependents. Let’s go over some important factors and plans that you must know about before opting for term insurance for family as a financial alternative: 

Term Insurance Plans for Family

  • Standard Term Life Insurance Plans
  • Child Term Insurance
  • Joint Term Insurance
  • Unit Linked Insurance Term Plans
  • Decreasing Term Insurance

Standard Term Life Insurance Plans

The idea behind having a term life insurance plan is to empower the dependent family to sail through if the policyholder passes away. A basic term life insurance plan will help you do that as well. If you are the sole breadwinner of your family, you can take a term life insurance policy to ensure that your family will receive financial help in the form of death benefits. 

Child Term Insurance

Unlike normal term insurance for your family, the beneficiary of a child term insurance plan is the children themselves. Parents who buy the plan are supposed to pay the premium. Upon maturity of the plan, the beneficiary, i.e., the child, gets the accumulated sum from the term plan. This amount can be used for paying off student loans, university fees, or for any other purpose at hand. This is the best possible term insurance for the family that you can take to secure the future of your children. 

Joint Term Insurance

A joint or spouse term insurance plan is designed to cover two working members of a family. If you and your spouse both work and are breadwinners of the family, you can choose a joint term insurance plan to cover you both. Joint term insurance for a family is far more affordable and offers great death benefits to your family. This way, you will not only be able to save more of your current income but also ensure that your family and dependents receive handsome compensation as a death benefit. 

Unit Linked Insurance Term Plans

If you are trying to find term insurance for your family that will not only offer death benefits but also bring in investment returns, then ULIPs are the right choice for you. In unit-linked insurance term plans, a part of your premiums is invested in ventures and the returns are added to your account as benefits of the term plan. If the insured person, i.e., the policyholder, meets their demise during the tenure of the plan, unit-linked insurance plans offer a death benefit. 

Decreasing Term Insurance

After your demise, your debts may fall upon your family. To prevent this situation, you can opt for a decreasing term insurance plan. A decreasing term insurance plan is set as per the current due loan amount you may have in your name. As you keep repaying the debt, the premium of the plan keeps decreasing over time. A decreasing term insurance plan is the perfect way to make sure that your family never suffers from repaying your loans and debts. 

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Features of Term Insurance for Family

  • Multiple Plans for Multiple Occasions: Term insurance plans in the UAE may insure you on paper but they are actually designed to benefit your family. This means almost every single type of term insurance plan available in the UAE is at your disposal. You can pick one as per the requirements of your family without compromising on any front at all. 
  • Death Benefit: The biggest feature of term insurance in the UAE is that it offers a death benefit. A death benefit is a compensation amount that your beneficiaries are entitled to receive in case you meet your untimely demise during the tenure of the term plan. 
  • Added Benefits on Maturity: Many types of insurance plans offer benefits beyond the death benefit. This can include investment return, critical illness benefits, and terminal illness compensation. 
  • Supports Children: A special kind of term insurance for a family is designed to secure the future of your children exclusively. Known as child term insurance plans, these plans make children entitled to maturity benefits. Parents can pay the premium and accumulate the benefit amount for their kids to use later in the future. 
  • Covers Your Debt: Term insurance in the UAE can even help pay off your remaining debt if you happen to meet your demise before repaying it completely. This takes the pressure off your family’s shoulders and helps in completing your unfulfilled responsibilities. 
    Term Insurance - The Key to Secure Your Family's Future

Benefits of Having Term Insurance for Your Family

  • Secure Financial Future: Term insurance for a family is one of the best ways to secure your family’s future. You can not only set up a plan to pay off death benefits in the event of your untimely death but also start a separate fund for your children to use in the future. 
  • May Generate Returns: Term insurance for your family may also help you get some returns on investments. Depending on the type of plan that you choose, a term insurance plan will not only offer the death benefits but also ensure that you get to make some additional profit by investing a part of your premium. 
  • Reduces Burden for the Family: Untimely death is enough of an emotional and mental burden for your family to handle. Adding your unpaid debt to it can cause further discomfort to them. A term insurance plan helps with this dilemma. 
  • Goes Beyond Death Benefits: As is evident, different types of term insurance for the family can offer different benefits according to what you choose. They are not only limited to death benefits now. From investment returns to illness covers, the possibilities are endless. 
  • Peace of Mind: Knowing that your family will be well-protected even when you cannot be there to support it anymore brings peace to you as the breadwinner of the family. Term insurance plans can lend a helping hand in that regard. 

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How to Choose the Right Term Insurance for Your Family?

  • Correct Time to Buy: Know the right time to buy term insurance for a family by estimating what and when your family will need it in the future. Buying your term plan too late may lead to heightened premium amounts, while buying it too soon may result in you paying more money in the form of lesser premiums for a long time. If you have a family history of a critical illness, buying a term insurance plan makes sense when you start earning as the sole breadwinner. If your whole family depends on your income, buying term insurance for your family when your kids are young is a good idea. However, getting a term plan when your children are almost at the earning age themselves may end up being a waste of funds. 
  • Cost-Effectiveness: While affordable term insurance for a family is quite an attractive concept, it is not always practical. Your goal should be to find a cost-effective plan that fits your budget instead of focusing on finding a cheap one. Cost-effective term insurance for families, which is also budget-friendly, will not only offer sufficient coverage but will also be easy on the pocket. 
  • Compare Available Quotes: Never buy term insurance for the family before comparing all the available options that you have. The best approach here would be to choose a few final contenders and then get quotes for them. Compare the benefits as well as prices for these plans. Once you find the most cost-effective option, finalise it and then make the purchase. 
  • Additional Benefits: Consider additional benefits apart from the basic death benefit. Term insurance for families is a rather wide area to explore. From child care plans to investment options, there is a lot to figure out. Make sure to weigh in on these factors as well when you are choosing term insurance for your family. 
  • Take Future Trends into Consideration: Inflation is a harsh truth that we face every day. When you are planning to get your family the financial help they may need in the future, you will have to take the future trends for inflation and other market forces into consideration as well. This will help you choose an assured sum good enough to offer the support needed. 
5 Best Term Plans for Family in the UAE -Types & Benefits

Weigh the Requirements of Your Family: Every family has a unique structure and hence unique needs as well. This means that one of the most important things you need to do to buy the right term insurance for your family is to examine your individual, unique needs of yours.

FAQ's for Term Insurance for Your Family in UAE

Can term insurance for the family cover all members of the family?

No, term insurance is meant to cover an individual only. In the case of joint term insurance, two people (spouses) can be covered by the same plan. However, no term insurance plan can cover the whole family under one policy.

Can non-working members of my family get term insurance?

No, most term insurance plans can only be bought by employed people who are the breadwinners of the family. 

 

Do I have to submit proof of income to get a term insurance plan?

Yes, the majority of term insurance providers require you to submit proof of income when you go out to buy a plan.

Who becomes the beneficiary of a child term insurance plan?

The children themselves are the beneficiaries of child term insurance plans. Parents pay the premiums of the plan and the maturity benefits are received by the children.

Can I make withdrawals from a child term insurance plan before maturity?

Yes, most child term insurance plans allow you to make withdrawals before the plan matures. However, this depends on each plan and provider independently.

Can I buy a term insurance plan for my non-working spouse?

Yes, many insurance companies allow earning individuals to add their non-working spouse to a term insurance plan. You can either buy a joint term insurance plan or get two separate plans.

What riders can I take with my term insurance for family?

Critical illness benefits and terminal illness cover are two of the most common riders available with most term insurance plans in the UAE.

Can I cancel my term insurance in the UAE when I need to?

Yes, just like any other type of insurance plan, term insurance in the UAE can be cancelled at any time you see fit.

Will decreasing term insurance offer a death benefit to the dependents?

No, a decreasing term life insurance plan only covers your remaining debt, if any. Dependents do not get any death benefit compensation here.

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