When you earn, you divide your income into various investments and expenses. At the same time, you want to give back to your parents and help them too. One such way of securing their life is by gifting them life insurance. What is life insurance? In a nutshell, life insurance is a financial instrument that provides life cover to the policyholder. When you buy one for your parent, all you need is their consensus and valid proof of insurable notice. Once you decide you want life insurance for your parents, then comes the toughest decision to make. Which life insurance to buy?
Factors to consider before buying life insurance for parents
There is no specific type of insurance that is best for all parents. The best one for each individual depends upon their individual requirements. Here are some factors to consider before buying a life policy for your parents-
Age is a major factor that is taken into consideration, no matter which type of life insurance you decide to buy. The more your age is, the more your premium will be. Therefore, always buy life insurance at an early age. The simple assumption that insurance companies depend on is that as a person ages, their lifespan reduces. When you are buying insurance for your parents, aged 50 and above, you might find the premium to be too much. Age plays a significant role in deciding the premium. Term insurances are a good option for them as they have significantly low premiums compared to other insurances. Also, term insurance offersa huge sum cover. When you are buying the policy, check the maximum age of renewal. It will signify till what age you can renew your parent’s insurance plan.
As your parents grow old, the chances of being diagnosed with critical illnesses also increase. While buying a policy for them, consider additional coverage provided as riders. Usually, for parents, a critical illness rider would prove quite useful.
When you buy insurance, a medical test is a usual process that most individuals go through. It gives your insurance company a clear idea about your health. Since the health of a person directly affects their lifespan, medical records play a major role in determining health insurance. When you are buying life insurance for your parents, one option is to opt for a life policy that requires no medical exam. Instead, give a declaration of your parents’ health. Most people who prefer this insurance provide declarations, as their parents may not be in good health. Instead of getting no insurance, this is definitely a better choice. However, the drawback here is that insurance for your parents without their medical test will cost you a higher premium.
Cost of the insurance
Parents of most working individuals are senior citizens. The premiums for senior citizens are quite high. Hence, it is advised to purchase insurance for your parents as soon as possible. You can immediately check the approximate insurance premium based on their age through a life insurance calculator. Ensure that the premium amount is affordable enough for you to pay throughout the duration of the policy.
Why buy life insurance for parents?
When you buy life insurance for your parents, you are protecting them from unforeseen circumstances in the future. Here are some benefits of buying a life insurance policy for your parents:
- In old age, parents feel left out and lonely. When you buy a policy, the gesture reflects that you care and means a lot to them.
- When you buy insurance for your parents, you can avail of tax benefits too. You can avail of deductions for the premiums that you pay for your parents’ policy.
- Some insurance companies also offer to take care of the medical expenses of your parents. This would come quite handy as they age.
- When you buy a plan for your parents, it not only secures their lives but your life too.
- There are several types of life insurance products with a saving or investment quotient to them. After your parents retire, the sum they receive from these investments will prove to be an excellent source of additional income.
- The add-on riders such as critical illness, accidental, or long-term care riders may help your parents in an unforeseen situation of an accident, diagnosis of chronic illness, or sudden hospitalisation. Life is uncertain and a life insurance policy provides the safety net to keep your parents secure.