Life insurance for parents provides financial assistance in the event of death for a set period. It protects your family by providing financial security and support for the demands of your family. Death benefits, on the other hand, apply only to the policyholder and are paid to the policyholder’s family. The payments enable the family to live comfortably. The life insurance policy provides comprehensive coverage at a low rate.
In India, parents take many ways to financially secure their children’s future. Furthermore, once grown, children can compensate them by insuring their parents’ financial future with the best life insurance for parents in India. Comprehensive life insurance coverage can provide your parents with lifetime security.
What is Life Insurance?
A life insurance policy is a contract between the insured and the insurance company. The insurance company pays the policyholder or the designated nominee a sum assured based on the agreement. However, if the policyholder dies unexpectedly, the life insurance company will pay a lump sum amount in exchange for the payment of the premium made towards life insurance for parents in India.
Should I Buy Life Insurance for My Parents in India?
Indeed, life insurance for parents will assist them covers their bills. It can give them financial aid at any time. However, some qualifying criteria must be completed to obtain life insurance for parents. Your parents’ policy will be determined by their financial situation, age, and health. Furthermore, parents must have the best life insurance on parents in place to ensure financial security in the case of an untimely death.
Read more: Top 10 Best Life Insurance Plans in India
Best Life Insurance Plans for Parents in India
Several life insurances on parents for parents over 60 might help them avoid financial difficulties. The top life insurance on parents in India for elderly parents is listed here.
|Insurance Company||Name of the Policy||Claim Settlement Ratio (CSR FY20)|
|Bajaj Allianz India||Bajaj Allianz eTouch Online Term Plan||98.02%|
|Aegon India||Aegon Life iTerm Plan||98.01%|
|Aditya Birla India||Aditya Birla Sun Life Protector Plus Plan||97.54%|
|Aviva India||Aviva Life Shield Advantage Plan||97.53%|
|Ageas India||Ageas Federal Insurance Flexi Term Plan||96.47%|
1. Bajaj Allianz eTouch Online Term Plan
This is one of the low-cost term plans that can be bought online in just a few easy steps. The term plan from Bajaj Allianz provides a guaranteed annual payout to the family for 15 years. You can also get tax breaks for this plan under Sections 80D and 10D. However, the policy’s maximum maturity age is 70 years, with a 15-day free lock period. The plan provides rewards in two separate ways.
2. Aegon Life iTerm Plan
Aegon plans can also be acquired online in a straightforward manner. The minimum age to be eligible for this plan is 18 years, while the policy’s maximum age is 65 years. Nonetheless, the policy’s maximum maturity age is 80 years, and it gives tax benefits under Section 80D of the Income Tax Act of 1961. Furthermore, in the event of the policyholder’s untimely death, the death benefit is paid to the policy’s beneficiary. Also, a nonsmoker or female policyholder may qualify for a cheaper premium rate with this plan.
3. Aditya Birla Sun Life Protector Plus Plan
The Aditya Birla Sun life plan offers comprehensive financial security at a low premium rate and protects against rising living costs. It also allows you to increase the sum assured. The plan includes total and permanent disability coverage, which expands the policy’s coverage. In the event of death, the recipient is entitled to the death benefit as annual income. Policyholders are rewarded for leading a healthy lifestyle. There are other rider options available with this plan to expand the policy’s coverage. This plan allows you to save tax under Section 80D of the Income Tax Act of 1961.
4. Aviva Life Shield Advantage Plan
The Aviva life plan provides complete coverage for the policyholder’s family at a low cost. If the insured lives the duration of the plan, the premiums paid will be refunded. The premium can be paid in two ways: either as a recurring premium payment or as a single premium payment. Tax breaks are available under Sections 80D and 10D.
5. Ageas Federal insurance Flexi Term Plan
To extend the policy’s coverage, the plan has the option to add an accidental death benefit rider. The plan provides tax advantages under Section 80D of the Internal Revenue Code. For female policy buyers, the policy provides a refund on a larger sum insured amount.
What Type of Life Insurance Policy Should Your Parents Have?
There are three sorts of life insurance policies, and the best one for your parents will depend on their financial needs and ambitions. Assess their income and expenses, as well as their financial goals, before selecting life insurance for parents.
Below are the three types of life insurance plans that you can buy for your parents.
1. Term Life Insurance
Term life insurance on parents provides coverage for a set time. And the life coverage expires after the policy period. Term life insurance for parents is a wise investment that provides financial advantages to family members or dependents in the event of the policyholder’s untimely death. The insurance pays the nominee a predetermined amount equal to the sum assured under the policy. Term life insurance for parents in India over the age of 50 has a period of 10 to 30 years and provides only death payments.
2. Whole Life Insurance
Whole life insurance for parents covers the life assured for the rest of their life, hence there is no time limit on the policy. In the event of the policyholder’s death, the payout is transferred to the designated beneficiary or nominee. These plans have appealing features such as tax advantages, permanent protection, cash value increase, and continuous payment during the policy term.
3. Retirement Plans
You can also buy retirement plans for your parents, which allow them to invest during their working years and get a pension at the end of the policy term or when they reach retirement age. The retirement plans also allow them to withdraw a portion of the guaranteed income as needed. A retirement plan can assist your parents in maintaining their standard of life and becoming financially independent.
Factors to Consider While Purchasing Life Insurance for Parents
Before investing in life insurance for parents, there are various factors to consider. These elements may differ from individual to person, but the fundamental necessities remain the same.
1. Age of Parents
Those who purchase life insurance for parents at a later age pay greater premiums. But, if the insurance plan is obtained early on, the premium rates are lower. This is because the risk of sickness increases with age. As a result, the premium rates for life insurance on parents are entirely determined by the policyholder’s age.
As a result, obtaining life insurance for parents over the age of 50 is extremely difficult. It also comes with a few disadvantages that people of these ages encounter, including age, health, and higher rates.
2. Medical Conditions of Parents
Another consideration is your parents’ medical condition; if they have a pre-existing condition and require medical attention before the lock-in period, they will not be covered by insurance. As a result, to obtain life insurance for parents in India, you must give the plan issuer a declaration of being active and healthy. This primarily pertains to parents who have bad health and are denied an insurance plan on medical grounds.
3. Lock Period
A lock period is a time frame in which you can select the amount of money put in the plan. You should always select a plan with a short lock time.
4. High Premium
The life insurance for parents rates is typically greater than those of younger people. As a result, it is advised that parents obtain insurance as soon as feasible. Also, parents can lower their premiums by staying active and healthy.
4 Reasons Your Parents Need Insurance Cover
The primary purpose for purchasing life insurance for parents is to guarantee their financial future. Furthermore, it will provide financial security for their loved ones if the policyholder dies. But, there are numerous more reasons to purchase life insurance for parents.
1. Guarantees financial security
If someone’s partner dies, the financial burden may fall on the other person. In such cases, the best life insurance for parents in India might be extremely advantageous. It can provide a lump sum payment to a policyholder’s family member so that they can live a dignified life without worrying about their financial security. This is especially important when one spouse is financially dependent on the income of the other. As a result, buying the best life insurance for parents might provide them with financial security.
2. Helps in debt repayment
Your parents are likely to have acquired debts during their lives. Your parents may have been paying off debts for years and are still struggling to do so. In this case, their sudden death may place the burden of repaying their debt on the shoulders of the remainder of the family. Life insurance for parents can help ensure that such debts and liabilities do not put one’s family in financial jeopardy. There is also the option of selecting a declining life insurance for parents, in which the coverage diminishes over time to keep up with the diminishing liabilities.
3. Helps in retirement planning
Life insurance for parents can help you plan for your parents’ retirement. There are insurance programs that give life insurance while also assisting parents in building a significant corpus for a pleasant retirement. Furthermore, the best life insurance for parents in India can be modified based on risk and market movements to provide higher profits. If you do not want to incur risks, you might choose a savings or retirement plan for your parents’ secure retirement.
4. Helps in reducing medical expenses
With your parents’ age comes an increased risk of sickness. Because the immune system diminishes with age, it is easier to become unwell. Furthermore, if a small ailment is not treated swiftly, it can progress into a catastrophic disease. Life insurance for parents in India can help your parents in this situation. With a few riders, the best life insurance for parents can cover the costs of hospital and surgical care. These riders pay a predetermined quantity of money upon diagnosis of the aforementioned medical problems. You don’t need to buy separate life insurance for parents to cover such high costs with these riders.
Life insurance for parents is a requirement, especially if you have dependent family members. Although life is extremely valuable, life insurance for parents can alleviate financial troubles following the death of a loved member. As a result, ensure the future of your parents and dependant family members by having life insurance for parents.
Best Life Insurance for Parents – FAQs
When should I purchase a life insurance policy for my parents?
Ans. There has never been a better time to get term life insurance coverage. Purchasing life insurance coverage now is preferable to never. Ideally, the best life insurance for parents in India should be purchased immediately after starting new employment. Purchase of term insurance early results in lower rates paid to insurance firms. The term insurance premium is determined by the proposer’s age and so rises with age.
Are there any age restrictions for purchasing life insurance for parents?
Ans. Most insurance firms set the maximum age for purchasing life insurance for parents in India at 65 years old. This is because, in general, most individuals retire between the ages of 60 and 65, and they are free of all financial commitments and liabilities, thus there is no need for a term insurance policy. A term insurance policy’s minimum entrance age is 18 years, while the maximum entry age is 65 years. Once the term policy is adopted, the proposer can choose the term duration; the younger the proposer, the longer the term period.
Why should I purchase life insurance for my parents?
Ans. Life is unpredictable, and we must a contingency plan to guarantee financial stability for our family. In the event of sudden death, the family may face financial difficulties as a result of the loss of the family’s earning member. Life insurance for parents in India pays down outstanding loans and provides income to the policyholder’s family in the event of the insured’s untimely death.
Are life insurance proceeds taxed?
Ans. According to Section 10 (10D) of the Income Tax Act of 1961, any sum insured amount received under the policy, as well as any bonus paid by the policy at the time of maturity or on the life assured’s survival, is tax-free. However, some conditions must be met before the policy proceeds can be taxed.
How much life insurance coverage is required for my parents?
Ans. When it comes to life insurance, one person’s needs will be different than another’s. The quantity of life insurance coverage required is determined by a variety of factors such as income, liabilities, and expenses. After analyzing all of these factors, you may decide how much life insurance coverage you need.