Why is it Crucial for Parents to Have a Term Insurance?

What are the financial challenges that parents have to face while bringing up their children?

If you’re a husband & wife, there are chances that you’ve already transitioned to being a father & a mother. You already know that your financial responsibilities have gone up considering that there's a new dependent member added to your family. As parents, you will need sufficient funds to take care of your child’s medical needs, education, career & even marriage.

How does term insurance help in overcoming these financial challenges by planning your child’s future?

As parents, we all would love to see our child grow up and fully blossom into a successful professional & good human being. However, there are many parents who desired the same & couldn’t fulfil these dreams. Cases of sudden cardiac death, accidents & stage 4 cancer have happened with many parents leaving their children behind with no financial protection for life. The single greatest advantage of term insurance for parents is that in case either or spouse passes away, the child will be protected financially for the rest of his or her life. The amount is sufficient enough to take care of your child’s education, health & marriage expenses.

Why term insurance plans are your best option to protect your child’s future?

An SIP or any other type of investment needs a long term investment. In case of your unfortunate demise, that investment will stop and its returns will also be less. Term insurance for parents is the only option in which, in case you pass away during the policy tenure, your child gets the exact huge amount that was pre-decided while you were buying the term plan. This is regardless of the fact that you may have paid only three to four annual premiums before your unfortunate demise.

Which are the best term insurance plans for parents?

There are many pure parent term insurance plans. It’s highly recommended that along with base life coverage, you should also go for options that have a combination of life cover & monthly income. In this way, your family may not only receive a lump sum amount, but will also receive a monthly income just like a pension, that will take care of your child & spouse’s lifetime expenses.

Term Insurance Plans are Must for Parents

A new born in the family changes everything. Now, you are no more just a married couple, but a parent. A family with a kid. That makes a picture perfect and a complete family.

As a parent, you start planning everything keeping your child's future in mind. Even if it just means a family tour to a new place. And also about your child's childhood, schooling, college, what to gift when they will turn legal, higher studies, marriage, and so on. You want it everything to be smooth and perfect for them without any bummer.

Then you start thinking about managing your financial portfolio. Financial planning becomes prime important. And then you start looking for some guidance and may seek an expert's advice.

However, one may get overwhelmed with the number of options available in the market that seems viable and most promising option when it comes to secure one's family financially. For instance, an endowment plan, unit linked insurance plan, child plan, mutual funds, etc. But ask any financial guru and the first priority advised will be to opt for a term insurance plan.

A term insurance plan is the best option for parents.

The cheapest way to protect your child's dream – Term Insurance

A term plan is cheaper than the most smartphones. Yes, believe it or not, but it is a fact, it is much cheaper than any other life insurance product that provides life coverage.

Term insurance for Couple – Joint Term Insurance for Parents

Here's what all the life insurance companies are doing to help all parents. They are offering joint term insurance plans for the married couples. As parents, you can opt for a joint term insurance plan.

Joint term insurance covers both the parents. A joint term plan can be bought when both the parents are working and also even when only one parent is working.

In a case, where both the parents pass s away at the same time, the legal heir will receive the coverage amount. This way, you as a parent are leaving a lot more than just a legal heritage and life long’s savings.

A joint term insurance is another surest way for parents to provide financial security to their children, even in case where both the parents are not alive for child’s upbringing.

Recommended Read: Which plan to opt as parents – Joint term insurance or two separate plans?

What's more – Term insurance premiums and payouts get Tax Benefits

This comes as an additional benefit of buying a term insurance, you can avail tax benefits. All the premiums paid are deductible from taxable income under Section 80C of the Income Tax Act. And the payout received in case of claim is completely tax free under Section 10(10D) of the Income Tax Act.

That means, your family, spouse and children, will receive full coverage amount, which will provide them life-long financial support.

Handpicked Guide to Buy Term Insurance for Parents

It is crucial to buy a right term insurance as a parent.

The following simple steps will help you to choose the best term insurance plan

• Assess how much cover would you need to provide financial security to the family.
• Thumb rule to buy a term insurance is to have the sum assured equivalent of 15 - 20 times the annual income.
• Once you have planned the basic coverage, go online and compare term plans.
• Enter your age, annual income, lifestyle detail, and compare term insurance plan.
• Compare term insurance plan details, check inclusions and exclusions, and premiums offered by different insurance companies.
• Assess if you need to buy an additional optional rider.
• Check if the required rider is available as an in-built feature in any of the term insurance plan.
• Seek experts' advice if necessary before purchase.
• Inform about it to the nominee.

Let me simplify the process of assessing the needs and requirements to buy a term insurance as a parent.

The below questionnaires will help you.

Questions you should ask before buying term insurance as a Parent

• How long your child will be financially dependent on you?
• How long your children will be financially dependent on you? If they are in their teens, then consider how long it will take them to be on their foot.
• How much coverage would be appropriate?
• At what age you will retire?
• Is your spouse working? If yes, then how long will he/she be working?
• Can you consider a joint term insurance plan as parents?
• Should you opt for a lump sum, income replacement or increasing income replacement term plan?
• Do you have any liabilities? If yes, how much is the amount and when your liabilities will end?

These questions will help to narrow down your actual needs. Further, it will help you decide the right term insurance as parents.

Note: If both parents are bread earners, it is crucial for both to have term insurance policies, which would build a bigger corpus for their child.

The Perfect Way to Buy Term Insurance as a Parent

Compare term insurance plans online

Today, there are so many life insurance companies providing term insurance. On top of that, most of these companies offer variants of term insurance to suit different needs. In a way, as a parent you can customize term insurance plan as per your needs.

But how to customize term insurance plans?

Or how can you find the perfect term insurance plan as a parent?

The key to find the right term insurance plan as a parent: Compare term insurance plans online.

By comparing different term insurance plans, you get an opportunity to customize the plan and select the most suitable term insurance as a parent.

As a parent you must buy term insurance at the earliest to pay lower premiums

With the increase in age, the annual premium of term insurance increases. It is advisable to buy at an early age. As you will see in the below example, how term insurance premium increases with the increase in age.

Let's say, Akshay, a 30 year old and breadwinner of the family, if decides to buy a term insurance with the coverage of Rs.1 crore till the age of his retirement, 65 years.

You will notice that the delay in buying a term insurance would do no good, in fact, it will only increase the annual premium to be paid.

Please note: The prices are indicative and subject to change based on various factors.

So you can clearly see, if Akshay as a parent, buys a term insurance now, at the age of 30 years, he would be paying lower premiums than if delays and buys at the age of 40 years.

Don't Let Your Child's Dream be Just a Dream: Protect it with Term Insurance

Do worries about your family’s financial security keep you awake at night?

Are you concerned about your child’s future in your absence? Or maybe you would like to provide some financial security to your family so that none of the things that you have planned go awry.

If you have agreed to the above asked questions, it's time to take the right decision before it's too late to be sorry.

In Conclusion

• Term insurance is the safest option which ensures that your child’s future is secured.
• It’s the cheapest option available in the market where your child gets a huge cover amount.
• It doesn’t require you or your nominee to continue paying premium in case of your death. They still receive the cover amount.
• To know more in detail on how you can buy term insurance of Rs. 1 CR starting at just Rs. 600/- per month, request a call back or get in touch with our insurance experts.

Leave an unsaid promise to your child about you being their shoulder all the time. There might be thousands of other things rolling up on your sleeves. But before it's too late, get expert's advice from Coverfox.com on buying the right term insurance plan as parents.