Do your parents need life insurance?
Insurance needs changes according to your age, however the biggest test begins when a person reaches the age of 60 and retires. However the general beliefs state that with zero income, the need of a life insurance for a retired person is almost abysmal. If your senior citizen parents have life insurance policies which are due to mature within next 5-6 years, it is always advisable to turn them into paid-up policies because otherwise it’s a waste of valuable resources.
One of the pundits of leading financial advisory services says “They will be able to save the premium for that many years”. The logic is humble, but cruel. The idea of Life Insurance offered by MaxLife, Aegon, SBI Life, LIC, etc. is to replace the income of the policyholder.
However, you need to keep in mind certain points like second marriage, having a child at a late age, heavy property loans, etc.
In all possibility, your parents would choose life insurance only if there is a prevailing plan that has been in place for years. Your parents can use this amount to clear their own financial debts or fulfil their dream on going for a foreign vacation.
Let us look at the steps you can go through while having a conversation with your parents regarding life insurance
- Step 1
Always explain to your parents regarding the need and intent to take out life insurance.
- Step 2
Work with your folks and gather all the information you’ll need to apply for a policy. These might include basic contact information for doctors and a general medical history.
- Step 3
Run through the finances of you and your parents to narrow down the amount you need to take out. If you parents have huge debts, you should opt for a policy that covers the debts
- Step 4
Always decide between whole life and term insurance. Term insurance generally covers your parent for a pre-determined period, whereas whole life insurance provides benefit for his entire lifetime.