Life Insurance for Parents

2024-08-02

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In India, life insurance penetration is still dismally low. While the life insurance industry is poised to grow in the coming years, it will be a long and arduous uphill climb.

These low penetration rates are partly on account of a lack of awareness. However, with the introduction of affordable life insurance plans, innovative coverage solutions, and ease of accessibility online, people are gradually understanding the benefits of life insurance policies.

Parents take a number of steps to financially secure their children’s future. Children, too, once grown up, can repay them by securing their financial future with a life insurance policy. A comprehensive life insurance plan can guarantee a lifetime of security for your parents.

Four Reasons your Parents Need a Life Insurance Policy

The foremost reason for anyone to buy a life insurance policy is to secure their financial future and to create a financial safety net for their loved ones, in case something was to happen to the policyholder. However, there are a lot of other reasons to buy a life insurance policy for your parents.

1. Financial Security

When someone’s partner passes away, financial strain can fall on the other person. In such cases, a life insurance policy can prove to be highly beneficial. It can provide a sum of money to help the spouse of the policyholder lead a dignified life without worrying about financial security. This becomes even more crucial if their spouse is financially dependent on the income of the other. Ensuring that your parents have a life insurance policy can guarantee this financial security for them.

2. Helps in Paying Off Debts

Debts tend to accumulate throughout the course of a person’s life, and your parents are no exception. Your parents may have accumulated debt over the years and are still working to pay it off. In such situations, in the event of their death, the burden of paying off the debt would fall on the shoulders of the rest of your family. Thus, a life insurance plan can ensure that such debts and liabilities do not leave one’s family financially vulnerable. You can also opt for a decreasing life insurance plan, wherein one’s coverage decreases over a period of time, keeping pace with their decreasing amount of liabilities.

3. Assist in Planning Retirement

A life insurance policy can play a significant role in planning retirement. Unit-linked life insurance plans provide a life cover while helping your parents build a large corpus for a comfortable and financially secure retirement. Their life insurance policy can be tailored according to their risk appetite and market movements to guarantee high returns. Invest 4G by Canara HSBC Life Insurance is a ULIP that you can consider.

If you do not want to take any kind of risk, then you can also consider buying saving plans or retirement plans for a secured retirement.

Thus, a life insurance policy can be an integral part of retirement planning for one’s parents.

4. Reduces Medical Expenses

With age comes an increased risk of illness. As the immune system weakens, it is much easier to contract illnesses. Furthermore, minor illnesses can progress to major diseases if not treated promptly. This is why life insurance can often be a boon for your parents. With the availability of critical illness riders, hospital and surgical care covers, and terminal illness riders, one can ensure that hospitalisation expenses and treatment costs are well taken care of. Such riders dole out a predetermined sum of money upon diagnosis of the concerned health conditions. These riders ensure your parents don’t need to take out a separate insurance policy solely to cover such hefty costs.

What Type of Life Insurance Policy should your Parents Have?

The right type of life insurance policy depends on the financial needs and goals of your parents. Assess their income and expenses, understand their life and financial goals, before choosing the right type of life insurance policy for your parents.

Here’s a list of the type of life insurance plans that you can buy for your parents:

1. Term Insurance Policy

Term life insurance plans are pure protection plans that your parents can buy for their financial security. These are affordable life insurance plan, which offers a life cover along with death benefits. You can also buy a term insurance plan in your 50s, and choose the cover to continue till 99 years, if the plan offers a whole life cover. A few term plans offer whole life cover that continues to protect the life assured till they turn 99.

2. Saving Plans

Life insurance cum saving plans also offers a life cover along with an avenue to save and grow your wealth. Guaranteed Savings Plan by Canara HSBC Life Insurance offer life cover with guaranteed maturity benefits to help you build retirement corpus.

Learn more about Guaranteed Savings Plan.

3. Retirement Plans

You can also buy retirement and pension plans to protect the financial future of your parents. Guaranteed Income4Life Plan by Canara HSBC Life Insurance is a savings plan that can be considered to secure the retirement of your parents.

Buying a life insurance for your parents ensure that the financial shocks that they may have to witness will have a cushion. And also, a life insurance policy helps in planning the finances in a sorted manner that will later on lead them to achieve financial independence. You can browse various life insurance policies; understand the features and benefits each one has to offer before choosing the best policy for your parents.

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