Sunday, May 25, 2008

Family Security = Life Insurance Policies

In order to preserve some kind of family security for the future, young couples with children can make a great use of a life insurance policy. Although this is the last thing that a young couple wants to think about after they got started with their new lives with many payments like rent, child-care and other, the policy is like a family security blanket for the future.

How much money coverage does family security need?

The basic rule is to buy a policy that would pay out 6-8 times your annual income in case of your death. The main idea for family security is that this amount of money would cover a part of surviving spending for a couple of years until he or she has time to adjust the balance. But sometimes for a better family security some couples want more then just 6-8 multiple if they want to cover some other expenses.

For your family security the next question will be if you want term or a whole life insurance.

A term insurance policy provides coverage for a specific period of time. Whole life insurances provide a cover for your family security as long as you live. Although, it is recommended for young couples to start with a term insurance that is a lot more affordable then a whole life insurance. However, later, if the family annual income rises up, for a better future family security the couple can have a whole life insurance.

The suggested policy for young families is considered to be a 20-year level term insurance. That could be coupled with a ULIP for a bigger blanket over their family security. This means that a 30-year-old person in good health could be expected to install family security by paying about Rs.3,000 a year for the level term policy of Rs. 15,00,000 and about Rs. 25,000 a year for the Rs. 15,00,000 ULIP life insurance. Still, there are all kinds of insurance policies made to preserve financial family security for all families out there that have a minimum income.

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