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Term Insurance Plan for Parents

When it comes to buying a term insurance plan, people usually think of it as a rule for young/middle-aged people. It is very usual to see parents buying term insurance plans to secure their children's future. However, one can always reverse this cover. This means you can also buy a term insurance policy to safeguard the livelihood of your ageing parents. 

Consider a fact that the technology and the financial planning services you can avail now, your parents had no access to the same 15 or 20 years ago. Despite that, they managed to save plenty of amounts for their post-retirement life; however, there is a 100% chance of urban inflation ruining their financial planning. In this scenario, you can come to the rescue and secure their future with a term insurance plan. 

Buying a term insurance plan for parents can provide several benefits to both you and your parents. 

Before that, let's dive into the importance of buying a term insurance plan for parents:

Ease in managing parents’ healthcare expenses

With gradual growth in the life expectancy of people, it must be taken into consideration that possibility of suffering from several diseases has also increased. Senior citizens are more prone to ailments and various life-threatening viruses. Consequently, this leads to an increase in healthcare expenses.

With the rise in the cost of medical treatments, your ageing parents might require finances to deal with healthcare costs. In this case, buying a term insurance plan for your parents could be very helpful for them. You can wisely choose riders to maximize the cover. This way, you can ensure that your parents can be financially secure and deal with their health care expenses in your absence.

Your Parents Would Feel Independent

Sometimes when an unfortunate event leads to the death of one parent, the financial burden comes down on the surviving and grieving parent. And with no income source to rely on this could result in a very distressing state. 

Nothing can replace the presence of a person, however, a term insurance plan can at least take care of the surviving parent and help them to deal with the financial burden independently. The sum assured offered surviving parent much-needed financial strength to stand on their feet.

Some term insurance policies even offer a monthly pay out option along with a lump sum payment option. This enables the surviving parent to stay financially independent and secure. Also, with some plans, there is an option of accepting a lump-sum amount with monthly payments. You or the surviving parent can always pick their preference.  

Ease In Managing Your Parents’ Liabilities

There is a certainty that any capable parent would keep dear savings to safeguard the future. However, while meeting several life objectives, one might run out of funds due to any uncertainty. For instance, your parents might have taken few loans to meet certain life objectives. There is a possibility of some unpaid debts and liabilities to be continued till their demise. In the unfortunate case of demise, the burden of repaying such debts could fall on the surviving partner or you. 

A term insurance plan for your parent can work as a plan B for both you and them. The sum assured that a nominee will receive can be used to repay these unpaid liabilities and debts. 

Early Buyer Benefit

If you decide to buy a term insurance plan for your parents when you are young, you can avail several benefits from it. In other words, buying a term insurance plan at a young age ensures that you receive high coverage at a low cost. Considering the inflation and other factors in mind, it is always advised to buy a policy in the early stage of life. This way, when in later stages of life you will get new financial responsibilities, you can rest assure to have your parent's financial security already in place.

Once you know the importance, the next step is about what factors to keep in mind while buying a term insurance plan for your parents. 

Parents' consent

Talk to your parents. Let them know why you are signing up for this financial responsibility. Asking for their consent can ease out all the doubts. It is also important because almost every policy that one buys for adults require signed consent. This will also help you with what kind of coverage they require as per their need. 

How much coverage they need 

A discussion around the term insurance plan with your parents can help you determine how much coverage they need and if there is any necessary rider required or not. For instance, added riders can help with paying the cost of funeral services as well. Calculating their present and future needs, you can figure out exactly how much coverage they'd require and his way you can make an informed decision in favour of your parents.  

Parents' Medical Condition

It is very important to consider what kind of medical conditions are eligible for buying a term insurance plan. It is advised to always disclose the insured person's recent medical check-up details, as well as their health condition in case of any illnesses. This way if a person is eligible, their future medical needs can be covered under the policy. Also, in future, if there will be a requirement of care at home or in a nursing home, monthly medical payments or other healthcare expenses, etc. can be covered based on the arrangements of the purchased policy.

Final Word

By choosing a term insurance plan for your parents, both you and your parent can avail of financial benefits in future.  And it is going to be a win-win situation for both you and them. Before choosing any plan make sure to do your research online and make an informed decision based on both your and your parent's needs. Compare available term insurance plans, investigate your options carefully. It is advised to opt for E-insurance so that the insured person enjoy maxim coverage at low rates.

Written By: PolicyBazaar - Updated: 02 June 2021
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