Diwali, a radiant festival of lights and new beginnings, is deeply rooted in prosperity and considered highly auspicious for life-changing milestones like buying a new house or car. In these precious moments when families gather, they truly connect, giving everyone a beautiful opportunity to bond and wish for a lifetime of happiness and well-being for one another. The spirit of this festival becomes infinitely more meaningful when celebrated as a milestone chapter such as the First Diwali after Marriage or First Diwali as Parents.
Yet, while wishing for the well-being of spouse or child, an important question often goes unasked: does the life insurance cover you have today still reflect the life you are building? Marriage and parenthood can change not just how much protection a family needs, but also what that protection should do. Here are five insurance decisions worth revisiting.
- Understand who now depends on you financially
Marriage does not necessarily mean one spouse becomes financially dependent on the other. In dual-income households, however, both earnings may support shared commitments such as rent, home loan repayments and everyday expenses. Losing either income could affect the household’s ability to maintain these commitments.
Parenthood brings longer-term responsibilities, including childcare and education. Couples should consider how their household would manage without either partner’s contribution, including the financial value of caregiving when one parent takes a career break.
- Calculate the protection gap and explore flexibility
Choosing life cover solely as a multiple of annual income may overlook a family’s actual requirements. A more practical approach is to estimate future household expenses, outstanding loans and major commitments, then account for suitable existing savings and insurance coverage.
For instance, a couple taking a home loan should consider whether their existing cover would be sufficient to help their partner manage repayments alongside other expenses in their absence.
Once the gap is identified, the next step is to examine whether existing coverage can be increased or additional protection is needed. Certain term insurance plans allow eligible policyholders to enhance cover following marriage, childbirth or home ownership, subject to policy conditions and additional premiums. This flexibility can help them with financial protection that keeps pace with changing responsibilities.
- Choose protection and payout options that suit your family
The amount of life cover and how the family receives the benefits are two separate decisions.
Pure term insurance focuses on financial protection, generally at relatively affordable premiums. Savings-oriented life insurance plans combine protection with benefits designed for longer-term financial goals. The choice should depend on individual priorities, affordability, and the ability to maintain premiums.
Equally important is the payout structure. Some policies offer a lump sum, regular income or a combination of both. A lump sum may help settle outstanding liabilities, while periodic income could support household expenses over time without the need to worry about investment planning with a huge one-time lump sum in hand. Understanding these options can help families select benefits that match their circumstances rather than focusing only on the sum assured.
- Safeguard your child’s future milestones
For new parents, planning for a child’s education often begins with estimating future expenses and setting aside money regularly. But what happens to that plan if the parent funding it is no longer around?
Adequate life cover can help provide financial support in such circumstances. Certain child-oriented savings insurance solutions also offer premium-waiver features, under which future premiums may be waived following the insured parent’s death while planned policy benefits continue, subject to policy terms, thereby giving assurance that child goals remain intact.
The important consideration is whether the arrangements made today can continue supporting a child’s goals even if the family’s circumstances change unexpectedly. Hence, periodic review of the life cover is an important step that parents need to be mindful of.
- Ensure your family can access the benefits
A life insurance policy serves its purpose only when the intended beneficiaries can access its benefits.
Marriage and childbirth are appropriate occasions to review nominee details, contact information and existing policies. Where a minor child is nominated, an adult appointee can be designated to receive the proceeds during the child’s minority, subject to applicable law.
Family members should also know which policies exist, where documents are kept, and how to initiate a claim. Accurate policy information and accessible records can help avoid unnecessary difficulties when support is needed.
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This Diwali, alongside celebrating a new chapter, take time to review whether your insurance arrangements still work for your family. The right decisions are not necessarily about buying a new asset. They are about having suitable protection, choosing benefits that meet real needs, making sure loved ones can rely on those arrangements and benefit from those assets or financial plans when it matters most.
Views expressed by: Vikas Gupta, Chief Product Officer, ICICI Life Insurance Limited
