How many Life Insurance policies should my Parents have

2024-08-02

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A life insurance policy provides financial freedom to the policyholder’s family in the case of any unfortunate eventuality. Life insurance is slowly transitioning from a luxury to a necessity for Indian households. While working-class Indians should ensure that life insurance forms a critical part of their own financial portfolio, they must also ensure it figures in their parent’s portfolio. With age, the risk of mortality rises, and it is, thus, recommended that your parent’s purchase life insurance well in advance, in order to benefit from more comprehensive coverage at lower premium rates.

Life insurance comes in numerous types and forms. These include ULIPs (Unit Linked Insurance Plans), Whole Life Insurance, Endowment Plans, Term Life Insurance, Money Back Life Insurance, and more. Considering the range of options one has at their disposal, one of the most difficult conundrums can be how many life insurance policies one’s parents should select to gain an optimum amount of coverage. This debacle, however, can easily be solved.

When debating the number of life insurance policies your parents should opt for, you should take into consideration the following factors:

Spousal Coverage: With spousal coverage, the policyholder of a life insurance plan is given the opportunity to add their spouse to the very same plan, often at discounted rates. This saves one the trouble of opting for two separate life insurance policies for each of their parents. However, if either of your parents have opted for a life insurance plan which does not offer spousal coverage, the parent lacking insurance coverage would need to invest in a separate policy.
Retirement planning: Buying multiple life insurance policies becomes even more important if your parents don’t have access to pension/retirement funds. Taking into account the rising cost of living, and the loss of income your parents would experience upon retirement, a life insurance policy can also act as a step towards retirement planning. If your parents have opted for a pure life insurance plan without a retirement and/or savings component, opting for a separate policy can help aid their retirement planning.
Availability of Riders: Riders help enhance the coverage of a life insurance policy. If your parents’ life insurance policy comes with multiple in-built riders that cover a variety of conditions and situations, the need for multiple life insurance policies is negligible. For instance, the chances of contracting a critical illness increases along with age. A life insurance policy with a critical illness cover can help mitigate this risk, and avoid the purchase of a separate critical illness insurance policy.

What’s the verdict - single or multiple life policies?

Though your parents can purchase multiple life insurance policies, it can become expensive and time-consuming. Instead, you can select a life insurance policy, which provides comprehensive benefits, like critical illness coverage, cover against accidental death/ disability, spousal cover, and more! Insurance plans are evolving to offer all-inclusive benefits to policyholders, and your parents can take advantage of such policies.

However, the ultimate decision of whether to purchase single or multiple life insurance policies rests on your parents, their unique needs and your own future goals. Depending on these needs and goals, your parents can decide on either a comprehensive life insurance policy or multiple life insurance plans that cater to different needs respectively. They must, however, arrive at this decision after conducting comprehensive research, comparing and contrasting plans online and understanding the scope of their own requirements thoroughly.

Conclusion: Your parents can consider Canara HSBC iSelect Smart360 Term Plan which can provide far-reaching financial benefits. There are multiple covers to choose from, including Accidental Death Benefit (ADB), Accidental Total & Permanent Disability (ATPD) - Premium Protection, Accidental Total & Permanent Disability (ATPD) - Premium Protection Plus, and Child Support Benefit (CSB). In addition to that, spousal coverage is also offered at discounted rates. Policyholders have the utmost flexibility and can tailor their plans to their unique needs. There are multiple premium payment options, multiple payout options (ranging from lump-sum payouts to monthly income payouts), and multiple coverage options (ranging from increasing coverage to decreasing coverage). What’s more, policyholders are also offered the return of premium benefit! The iSelect Smart360 Term Plan makes for the most comprehensive plan your parents can benefit from.

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