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Why Buying a Term Insurance is Important for all Parents

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  • 6th May 2019
  • 1,777
Why Buying a Term Insurance is Important for all Parents

If you are a parent to a little child then you will surely understand that it is quite terrifying to see him or her grow up in a world that is not as safe as you would want it to be. Imagine a scenario of you not being there to protect your child when he or she needs you the most. At some point, you have to trust that your child will be fine even if you are not around. However, one thing that you can still do for your child is to buy term insurance for parents in order to secure your children financially.

Understanding the term insurance for parents

Before you buy a term life insurance for parents, you need to understand what a term plan is and how it can benefit your children. God forbid, if something happens to you before your son or daughter could grow up to secure a job, they suddenly lose the financial security that you used to provide them. This is even truer for a household with one earning parent. If you buy a term plan and set your children as nominees, they will get the pre-determined sum assured from the insurer, in case if an unfortunate incident takes place before the maturity of the plan.

Why term life insurance for parents is important?

One of life’s most excruciating truths is its uncertainties. You can never know for sure what might happen to you the next moment. Accidents can happen to anyone and at any moment. It takes only one second of miscalculation from a driver and your child can lose their parent. Apart from the emotional struggle, the financial insecurities too can make their life very difficult. The term insurance for parents can be helpful in that case. The term insurance cover is a pure life insurance policy. This means that it pays only when the policyholder dies untimely, before the end of the policy term. So, it comes with lower premiums but higher returns. When you buy term insurance, you can peacefully live with the knowledge that you have secured your children’s future financially.

If you look at the current inflation rate then you will understand how fast everything is becoming more and more expensive. From healthcare to education, the cost of basic human needs is rising drastically. If you have a newborn then it is time for you to realize that everything will become even more expensive when they grow up. It is important that you start planning for their future at the earliest. You need to start saving for them, and investments in the right insurance cover is a part of that. Term insurance plans can be very rewarding if you start early.

If you are a 30-year-old then buying a term plan now will cost you less in order to avail of an INR 1 crore cover compared to a 35 or 40-year-old parent. To get a cover of that amount, you only have to pay around INR 8,500 annually as premium for 35-years. This may vary depending on your health condition and the insurer, but it is still a smart idea to start early. Remember, buying the right term life insurance for parents is not only a necessity but it is an obligation for you as a parent.

- A Consumer Education Initiative series by Kotak Life


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