Purchasing term insurance is a great way to protect your family’s future financially and help them achieve their life goals. Most people tend to focus on getting a term policy for themselves or their spouses alone. When shopping for an insurance plan, parents are often not part of the equation. However, purchasing a term insurance for parents can offer both you and your parents a whole world of benefits. Here is a closer look at the benefits of term insurance for parents and some reasons why you should purchase it.

Why should you buy term insurance for your parents?

Apart from giving you and your parents a strong sense of financial security, there are plenty of other reasons why you should buy term insurance for parents. Some of these are briefly explained below –

• It helps take care of your parents’ healthcare expenses

Over the decades, the life expectancy of people has gone up significantly. It also means that the possibility of suffering from ailments and diseases has shot up. This number seems to increase exponentially when we take senior citizens and old people into consideration. As your parents age, their healthcare expenses may also rise.

With the costs of medical treatment escalating, your parents might be in need of financial help to deal with the rising healthcare costs. This is where term insurance for parents proves to be useful. When paired with suitable riders, a term policy can help your parents handle critical illness and disability related expenses better in your absence.

• It lets your parents stay independent

In the unfortunate event of one of your parents’ demise, the financial security of the surviving parent might suffer. Such a distressing event can leave them with no source of income to rely on. This could prove to be very distressing for your surviving parent, especially in the wake of the loss of their spouse.

Nevertheless, all of these issues can be handled gracefully with a good term insurance plan for your parents. The lump sum death benefit payment that the insurer pays out can give the surviving parent the much-needed financial security and the strength to get back on their feet. Some term insurance policies even offer a monthly payout option along with a lump sum payment option. This enables the surviving parent to stay financially independent and secure.

• It allows you to take care of your parents’ debts and liabilities

Over the years, your parents might have availed loans to fund certain major purchases or to meet various life goals. Depending on the tenure, these accumulated debts and liabilities may remain partly unpaid until their demise. In cases like these, the burden of repaying these debts may fall on the surviving members of the family, such as yourself.

However, a term insurance plan can help you here. The death benefit that you receive can be used to repay these unpaid debts and liabilities, thereby safeguarding you and your own family from having to bear the burden of repayment.

Term insurance benefits for parents

By purchasing term insurance for parents, both you and they stand to benefit greatly. Read on to know more about the benefits that such a term insurance policy offers.

• Tax benefits

One of the most important advantages that term insurance for parents offer is the ability to reduce taxes. According to the Income Tax Act, 1961, the purchaser of a term insurance policy is eligible to claim the premiums paid toward the plan as a deduction from their total taxable income. You can claim deduction of up to Rs. 1.5 lakh in a single financial year, which can help reduce the tax outlay. In addition to that, the death benefit sum assured is also tax-free on the hands of the beneficiary. Tax benefits are subject to provisions of Income Tax Act, 1961, as amended from time to time.

• Flexibility to add riders

Another major advantage that term insurance plans offer is the flexibility to add riders of your choice. With the rise in diseases and ailments, opting for riders to cover healthcare and medical costs becomes essential. You can choose between plenty of different riders such as disability coverage, critical illness cover, terminal illness cover, and even accident coverage. Term insurance for parents also allows you to add multiple riders to the base plan.

• Affordability

Unlike traditional life insurance plans, term insurance is relatively more affordable and economical. Since term insurance essentially offers a pure life cover, the cost of premium is lower and more nominal. By purchasing a term insurance for parents, you can give them the gift of a protective life cover without having to deal with exorbitant insurance premiums.

Conclusion

By opting for term insurance for parents, both you and they stand to gain a great deal. Before choosing a term policy for them, always ensure to explore your options carefully. This way, your parents get to enjoy maximum coverage with the least amount of financial outlay. Also, before choosing a term policy, make sure that you use a term insurance calculator to determine the amount of required life cover, so that you are prepared to make an informed choice.