Life Insurance for Parents in India

What is Life Insurance for Parents?

Life insurance for parents is a life insurance policy that offers death benefits to the nominee or child in case of the parent’s untimely death during the policy term. With this policy, parents can ensure their kids have enough funds in their absence to fulfil their financial goals liked pursuing higher education or getting married. Not only that, the parents can also claim life insurance tax benefits on the premiums paid towards their life insurance for parents.

Can I Buy Life Insurance For My Parents in India? 

Yes, you can easily buy life insurance for your parents that helps cover their expenses. It provides peace of mind to your loved ones during any unfortunate events like death, disability, or critical illnesses. To purchase a life insurance policy for parents, you need to compare the available plans in India to find the most suitable plan for your parents. The policy type you purchase will depend on the parent’s financial condition, age, and health status. It is important to buy life insurance for parents in India that will provide financial security to you on one of the unfortunate events of your life. 

What is the Need for Life Insurance Policy for Parents?

One of the major benefits of investing in a life insurance policy for parents in India is that it can replace their income and offer them much-needed financial backup. Also, in case of an unfortunate demise of the senior citizen of the family, their children may face financial difficulties. A life insurance policy for parents helps in avoiding such situations by acting as a network for savings and providing income at the last of the policy term. You should consider buying life insurance plans if you have outstanding debts, financially dependent kids, or you want to leave behind a legacy for your children.

What are the Types of Life Insurance for Parents in India?

There are different types of life insurance for parents over 60 to help them avoid the financial crunch. All these life insurance plans for parents in India generally fall under 3 categories: Term life insurance plan, Whole Life Insurance Plan, and Retirement Plans.  

1. Term Life Insurance

   Term insurance for parents/senior citizens offers coverage for a specific time period. This plan provides financial cover to the nominees or dependents in the unfortunate demise of the parents. The insurer pays a fixed sum to the nominee, equivalent to the policy’s sum assured. Moreover, term insurance for parents allows you to secure a large life cover at affordable premiums. Many insurers offer term insurance for parents to cover till the age of 99/100 years.

2. Whole Life Insurance

   Whole life insurance for parents can provide insurance coverage to the life assured for his/her whole life i.e., till 99/100 years of age. In case of the unfortunate demise of the life assured, the payout is paid to the assigned beneficiary/nominee. They have attractive features such as tax benefits, permanent protection, cash value growth, and consistent payment of a premium over the whole policy term.

3. Retirement Plan

   These days, various life insurance policy for parents allow them to save through all their working years and draw a pension at the last of the policy term or after acquiring the retirement age. These retirement plans also help them to partially withdraw the accrued sum as needed. This helps parents to maintain their living standards and be independent financially.

What are the Benefits of Life Insurance for Parents?

Life insurance for parents offers several benefits to maximize overall life coverage and to provide much-needed financial backup. The benefits are:

• Financial Security: Investing in life insurance for parents ensures financial security and helps in reducing financial uncertainties like death, disability, and illnesses in the future.

• Death Benefits:In case of your parents’ unfortunate demise, the dependent children will get the sum assured amount. They can use the benefit amount to take care of their monthly expenses.

• Benefit Payout Options:A life insurance policy for parents can offer the benefit of regular income in your post-retirement years.

• Tax Benefits:You can claim tax benefits on the income you will receive as per the prevailing laws of the Income Tax Act, 1961.

• Peace of Mind:Parents feel respected and don’t feel lonely and ignored in their old age. This is very important for them to feel healthy and active, both mentally and physically.

What are the Factors to Consider Before Buying Life Insurance for Parents?

As discussed, there is a number of factors one needs to consider before investing in life insurance plans that can vary from one person to another. Read on to know more: 

1. Age

   If you buy an insurance plan at later ages, you will have to pay a higher premium. However, if you plan to opt for a life insurance plan at an early age, the premium rates will be lower. With the advancement in age, chances of disease also increase. So, the premium rates of life insurance depend on the age when you are buying life insurance.

   • Obtaining Life insurance for Parent over 50 years is quite difficult as few challenges are faced by people of these ages such as in age, health, and higher premiums. Term insurance, permanent life insurance, and life insurance with no medical exam are the best life insurance for parents over 55. 

   • Various companies offer the best life insurance for parents over 60, but choosing one is difficult. Below are some of the terms that should be taken care of while buying life insurance for parents over 60 years of age

   • Check for the maximum renewal age i.e., the age till when the policy gets renewed for the life insurance plans. 

   • Explore if you can avail of increased coverage in the form of riders, critical illness, and more. 

   • Find the medical centers and hospitals where you can utilize your policy 

   • If you are investing in Life insurance for parents over 70, then you do not have to be bank drained or hard working. At these ages, you should seek guidance if you are not sure.

2. Medical Conditions

   If someone is suffering from a pre-existing ailment, and it requires medical assistance before the lock-in period, they will not be able to pay for the stated medical expenses through the insurance. So, in the case of life insurance for parents with no medical exam, you are required to provide a declaration of being active and healthy to the company. This is majorly for those having poor health and have been denied insurance on a health basis. 

3. Waiting Period

   This includes the time before which one can determine the funds invested in the plan i.e., called lock period. Always choose a plan that does not offer a long lock period. 

4. Premium

   The premiums of life insurance policy for seniors would be higher than that of younger people. While it is suggested to buy a policy as soon as possible. Also, senior citizens can easily decrease their premiums by ensuring that they are maintaining a healthy lifestyle. 

Wrapping It Up!

You must buy life insurance for parents, especially if you have dependent children to take care of. While life is truly valuable, the profits of a life insurance policy for parents can be used to reduce the financial hardships that the kids may face in the absence of their parents. You can easily buy the most suitable term insurance for parents and secure the life of the dependant kids while saving on yearly taxes.