Can One Gift A Term Insurance Plan To Their Parents?
Updated On Oct 06, 2021
Table of Contents
Term plans are typically purchased by parents to protect their children's future. When it comes to the reverse cover, though, there are no hard and fast rules. Even children can purchase term insurance to ensure their parents' financial security. Remember that your parents did not have access to the financial planning services that you do now, and that even if they prepared diligently for their post-retirement years, urban inflation might deplete their savings, leaving them reliant on others. With a term plan, you can safeguard their future. A term plan provides financial protection in the event of the insured's untimely death. When the insured dies, the insurance company pays the sum to the beneficiary. The danger of death is covered by a term plan, which gives financial stability to the insured's family. With a term plan, you can give your parents a sense of security and comfort.
Why Should You Gift a Term Insurance Plan to Your Parents?
There are numerous reasons to purchase term insurance for parents, in addition to providing you and your parents with a strong sense of financial security. Some of these are described below.
It Helps in Paying For Your Parents' Medical Expenses
People's life expectancy has increased dramatically over the decades. It also indicates that the risk of contracting illnesses and disorders has increased. When we consider older individuals and the elderly, this number appears to grow enormously. As your parents get older, their healthcare costs may climb as well. With the rising costs of medical treatment, your parents may require financial assistance to deal with the rising healthcare bills. Term insurance for parents comes in handy in this situation. A term policy, when combined with appropriate riders, can assist your parents better manage critical illness and disability-related expenses after your demise.
It Enables Your Parents To Stay Self-Sufficient
If one of your parents passes away, the surviving parent's financial security may be jeopardised. They may find themselves without a source of income as a result of such a traumatic experience. This could be quite upsetting for your surviving parent, especially in the aftermath of their spouse's death. Nonetheless, with a suitable term insurance plan for your parents, all of these difficulties can be managed gracefully. The insurer's lump-sum death benefit payment can provide much-needed financial security and the strength to get back on their feet. Some term insurance policies can provide a monthly payment option in addition to a lump sum payment. This allows the surviving parent to maintain financial stability and independence.
It Helps In Managing Your Parents' Loans And Debts
Your parents may have taken out loans to buy a house or a car or accomplish various life goals over the years. These accumulating debts and liabilities may stay partially unpaid until their demise, depending on the term. In situations like these, the onus of repaying the debts may fall on the family's surviving members, such as yourself. A term insurance policy, on the other hand, can benefit you in this situation. You can use the death benefit you receive to pay off these unpaid debt repayment obligations and liabilities, preventing you and your family from having to shoulder the financial burden.
Both you and your parents would benefit greatly from term insurance for parents. However, you should always be sure to thoroughly research your alternatives before selecting a term policy for them. Your parents will be able to receive most coverage for the least amount of money. Also, when you choose a term policy, make sure you use a term insurance calculator to figure out how much life insurance you'll need so you can make an informed decision.
Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.