Need of Life Insurance in a Family

We are considering a family of four members i.e. Husband, Wife, Son, and Daughter as given in Fig. 1. In this family, Husband is the source of income while wife, son and daughter are financially dependent on Husband.

Fig. 1 A family and its need

This family will have to face six major needs i.e. education requirement of daughter, education requirement of son, marriage requirement of daughter, marriage requirement of son, old-age requirement of husband and old-age requirement of wife. This need distribution with husband age-wise is given in Fig. 2.

Fig. 2 Husband Age-wise family need distribution

This need can be managed with number of methods like Life insurance (LI), public provident fund (PPF), mutual fund (MF) etc. LI is the only option which meet above mentioned need in the sudden loss of husband (source of income).