It is quite normal to purchase a life insurance to secure the future of your children, but one can also purchase it to ensure the livelihood of his/ her parents. Most parents feel stranded during their old age, especially when they become dependent on their children. In the event of the sudden demise of one of the parents, children might face financial difficulty, but the insurance bought by their parents will help them in this situation. 

It provides financial security to the dependents in case of the policyholder’s sudden demise, by offering dependents with death benefit. It helps to bear the amount of income lost, paying off debts & liabilities, if any, fulfilling the financial requirements of the dependents in the policyholder’s absence. 

Types of Life Insurance for Parents

Provided are the types of life insurance available for parents:

• Term Life Insurance (h3)

A Term plan is a type of life insurance policy where a specific amount is paid to the nominee upon the policyholder’s demise. It is a cost-effective life insurance plan, which is considered to be quite useful due to the financial compensation being offered to the dependent family membersin case of a sudden demise. 

• Whole Life Insurance (h3)

Whole life insurance is a kind of Life Insurance that covers the entire life of the policyholder, i.e. about 99 to 100 years of age, guaranteeing the death benefits to beneficiaries upon their sudden demise. It helps protect the family members for their entire lives. The partial premium paid by the policyholder is allocated towards the sum assured, & the remaining portion is invested. The amount of profit is paid to the policyholder if they survive till the completion of the maturity period or they decide to withdraw the funds, depending on the fund’s performance. 

• Retirement Plan

A Retirement plan is an investment plan that is well-designed to fulfil all your day-to-day needs after you retire. One can also save by investing money either through regular payments or a lump sum over a specified period. These pension plans provide an assurance of a stable income during retirement years, ensuring financial security. 

Need for a Life Insurance Plan for Parents 

Provided are the reasons to buy a life insurance plan for parents:

• Income Replacement:

In the event of a parent’s sudden demise, life insurance provides a safety net to cover the lost income.This helps maintain the lifestyle& quality of lifewhile meeting the financial objectives of the remaining family members.

• Includes Outstanding Debts

It helps covering the outstanding loans, credit card balances, & debts, relieving the financial burden of the surviving family members. Hence, allowing them to concentrate on other important issues of the family.

• Covers Childcare & education expenses

It takes care of the childcare, education costs, or any other important expenses to be incurred for dependent children, setting up a stable future for them.

Choosing the Best Life Insurance for Parents 

Provided are the factors to be considered while choosing the best life insurance for parents:

• Future Financial Objectives

While planning for a life insurance plan for parents, the future financial objective should be clear, i.e. the purpose of buying this plan. It can be for their retirement, children education, or marriage, etc.

• Coverage

Consider the coverage required by factoring in income, expenses, present debt obligations, & future financial requirements, etc. Take into consideration inflation factor to ascertain the correct amount of coverage required.

• Right Sum Assured

Amongst middle class & upper middle class, a 1 Crore Term Insurance for life has been quite in demand. This is because of huge coverage it offers at an affordable premium costs, which makes it a wisest choice for parents. This substantial amount will help covering many huge expenses, such as education, home loans, routine living expenses, etc.

• Policy Features & Benefits

Assess, compare, & review the terms & conditions, features, & benefits of a life insurance plan to decide one that best suits your parent’s requirements& preferences.

• Comparative Analysis Of Premiums

Next, compare the premium cost, coverage, features & benefits offered, of all insurance companies. Choose a plan that best suits your parent’s needs & budget, considering an appropriate coverage.

• Reliability Of Insurance Provider

While finalising the insurance plan, it is important to check for the financial stability, claim settlement ratio, financial reputation, customer ratings & reviews of the insurance company. This will bring trustworthiness & reliability to make a well-informed decision.

• Terms & Conditions Of The Policy

Understand the terms & conditions of the life insurance plan before buying to know what is included & what is not. Consider certain factors, like lock-in period, claim settlement rules, all the details & information before making a well-informed decision.

Steps to Buy a Life Insurance Plan for Parents

Provided are the steps to be followed to buy a life insurance plan for parents:

• Evaluation of Needs

Make an evaluation of the certain details related to parents, such as coverage required, financial status, budget, number of dependents, etc. This will help you make a well-informed decision in choosing an appropriate insurance plan.

 

• Research & Comparison of Policies

Conduct a proper research to uncover the most appropriate insurance plans which offer suitable coverage & affordable premium cost suiting your requirements.

• Completion of Application Process

Complete the application process ensuring all the details & information has been provided with, including medical examination assessment, if required.

• Ensure Timely Payments of Premium

To ensure regular coverage & to retain the plan, premium amount should be paid on time.

• Regular Assessment of Policies

Review the plan regular to ensure whether the financial requirements of parents are being met or not.

Conclusion

Life insurance for parents offer financial security & wellbeing to them, ensuring them a secured future.Understand the varied types of available insurance plans, make an assessment of requirements of parents, selecting the appropriate coverage, will build trustworthiness & sense of security. Review the plan on regular basis, whether any additional riders are required or upgrade the plan to fulfil the financial requirements