Why Life Insurance is Important for Parents?

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. It is encouraging many individuals to look beyond themselves and think of those who matter most. 

Among them are our parents, whose financial well-being is often overlooked.

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.
 

4 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. It also helps create a financial safety net for their loved ones, in case something were to happen to the policyholder. However, there are a lot of other reasons to buy a life insurance policy when it comes to doing it for your parents. Below are the top four reasons why you must buy life insurance 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 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. Unit-linked insurance plans by Canara HSBC Life Insurance are worth considering if you’re looking for an approach to build a corpus for them while ensuring their coverage.
   
   If you do not want to take any kind of risk, then you can also consider buying savings plans or retirement plans for a secure 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:

• 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 plans that offer 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.
• Saving Plans: Life insurance cum savings plans also offer life cover along with an avenue to save and grow your wealth. Take the example of Rajiv, who bought a savings plan for his retired father. Over the years, the plan not only accumulated a steady savings corpus but also ensured that his father remained covered under life insurance.
  
  When an unexpected medical expense came up, the plan’s maturity benefit helped cover the treatment without disturbing their household budget. It worked as both a savings vault and a safety net.
• Retirement Plans: You can also buy retirement and pension plans to protect the financial future of your parents.
  
  Consider Meera, a teacher who retired at sixty. Her son had invested in a retirement plan for her years earlier. Now, every month she receives a fixed income from the annuity, which covers her living expenses and healthcare costs. The peace of mind that came from not having to ask her children for money made her feel empowered and independent.

Conclusion

Buying life insurance for your parents ensures that the financial constraining situations they may have to face will have a cushion to rely on. Moreover, 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. However, you must go through their features and benefits before choosing the best policy for your parents.

At Canara HSBC Life Insurance, we provide you with a range of insurance plans, including term life, retirement plans, market-linked plans, income growth plans, etc. The purpose behind the wise range is to ensure that you are able to provide it all for your loved ones. Take the next step in caring for your parents by exploring our plans today. 

A few minutes of your time now can give them a lifetime of security and peace.