If we start using family iCloud storage will the individual 50G plan be automatically cancelled?

I'm not sure that I understand your question, but Share an iCloud storage plan with your family - Apple Support states:

"When you share your iCloud storage, any family members using the free 5GB plan are added to your family plan automatically.

If a family member is already paying for their own iCloud storage plan, they can choose to switch to your plan or keep their own and still remain part of the family. When they switch to the shared family plan, they get a refund for the remainder of their personal plan. They can't keep their current plan and use the shared family plan at the same time."