Family Life Assurance.Useful Tips & Hints
Planning family life assurance is essential, because even though nobody likes to think about the probability of an early or unexpected death, there are unfortunately such cases. If the person who dies suddenly is not insured, the surviving spouse often finds it very difficult and even impossible to cope with the daily expenses, the mortgage, credit card debts, education of the children and other expenses. Having a life assurance of some kind will ensure that you or your spouse will receive a lump sum of money in case of the death of the other.
Some useful tips when getting a family life assurance, which are good to know are that there are various types of life assurance products, including: single life assurance, joint assurance and dual life assurance, family protection policy, children’s deferred policy and education endowment with life assurance.
Here is the brief explanation of all these types of life assurance policies available for families:
1. The single life assurance is a policy, which is most suitable for the household’s breadwinner, or the one with the largest income. In case of his or her death, the financial impact on the surviving family members will be greatest, so a lump sum paid by the insurance company will be very useful in this case, in order for the surviving spouse to cope with the debts, mortgages, education fees, and other expenses. Even better, if the person insured with a single life assurance policy survives to the maturity date of the policy, then he or she will receive a lump sum plus the dividends.
2. The joint life assurance is suitable for households in which the income of each of the spouses is equally important for the family budget. This includes families in which one of the parents stays home to take care of the children, because this too will cost money for substitute daycare necessary if this person suddenly dies. The joint life assurance is great for couples, which are just starting a family, maybe have bought a house with a mortgage loan, and have small kids, who will remain at home for years and will need to be educated. The joint life assurance policy will pay out a lump sum to the surviving spouse and the family in case of the death of the other spouse. The joint life assurance though provides coverage only for one death of the two people – either the first or the second death.
3. The dual life assurance is a policy offering coverage of two people at the same time. In other words, in case one spouse dies, the other will receive the insurance money, but will still remain covered. In case of the unfortunate death of both parents, then the insurance company will pay a lump cover sum for both spouses to the children or other beneficiaries of the policy. This type of life assurance is still cheaper than getting two individual ones for both partners.
4. The family protection life assurance policy is signed for a certain term life insurance, and in case the person insured dies during this period of time, the family (or other beneficiaries) will receive the cover cost divided in “portions” on a monthly or other basis, rather than as a lump sum. In case the person insured survives until the maturity date, then the insurance company pays him or her the entire guaranteed sum.
5. The children’s deferred life assurance policy is signed for a specified date, when the actual life assurance begins. Before that, between the signing of the policy and the “deferred” date, is the period when the policy must be paid for. The children’s deferred policy means that if the child dies before this date, the parent receives the whole lump sum, and if the parent dies before the specified date, the remaining premiums until the deferred date are annulled.
6. Education endowment life assurance is an insurance policy for planning your child’s college and education. This policy is paid out when the child is old enough for college. It can also pay out cover for the death of either the child or the parent, depending on the type of agreement signed in the policy.