Can I Buy a Term Plan for my Mother?
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Women these days are focused on their careers as seriously as men. As more and more women earn, they have become equal partners for contributing to household expenses. Securing the lives of your loved ones is crucial. As a child, when you earn, it is vital that you have a life cover for your mother too. Also, if you are a working mother, it is essential to have a financial safety net for your family in your absence, too. Irrespective of whether your mother is working or a stay-at-home parent, a life cover is an important financial instrument to have. For most mothers these days, term policy seems to be the perfect type of life insurance as, along with life insurance, it protects mothers from any type of disability and critical illnesses too.
A term plan is a life insurance cover for a specific time. You are required to pay premiums until the tenure of your policy. In case something unfortunate was to happen during the duration of your policy, your nominee receives the sum assured. Term policies are popularly known for their low premiums and high sum coverage.
Why buy a term plan for your mother?
When you are browsing through different life insurance, it can confuse you, which is the best choice for your mother. Here are some benefits of opting for a term plan:
A financial cushion
When a mother has a term plan, the financial future of the family is secured. As it ensures that in case of her demise, there is enough financial cover to take of her children and other dependents. It also ensures that it does not burden the family with any debt or liabilities the mother might have.
Term policies are quite simple and convenient purchases. You can buy it online as well, with no hassle. Simply put your details in a term plan premium calculator of the insurance company and you will get an estimate of your premiums and sum covered. It is always good to compare different term plans before narrowing them to one.
Term insurance is one of the most cost-effective insurance available out there. When compared to other policies, the premiums of a term plan is significantly low. The affordability factor makes it quite popular amongst the passes. As you can easily fit the premium in your budget while getting sufficient cover.
When you are buying a term plan for your mother, ensure that you go through the riders available. As riders are add-on benefits that you can avail of by paying additional premiums. Most women opt for critical illness benefit rider as it covers the expenses of treatment and hospitalization when diagnosed with a critical illness.
There are some term plans that also offer monthly income for a specific tenure. During that tenure, your mother will receive a lump sum amount every month. This will prove to be an additional source of income for her.
The premiums that are paid on the term plan are exempt from taxes under section 80C of the Income Tax Act. Also, the sum assured received by the nominee is also deemed as tax-free under section 10(10D) of the Income Tax Act.
What sum cover does your mother need?
The term policy cover of your mother depends on several factors. It is also good to calculate the premium of the policy using a term plan premium calculator. Here are some key factors that you need to consider before buying a term plan for your mother:
Financial goals and responsibilities
Ensure that the term insurance you choose is enough for any financial responsibilities that your mother has. Be it her financial contribution towards expenses or her liabilities. Also, take into consideration the financial goals, be it buying a house or funding the education of her children.
Age during purchase
When you buy insurance, age is a major factor that is taken into consideration. The sum coverage and the premiums for your mother’s term plan depend significantly on her age and health.
Apart from the above factors, the annual income also plays a major role in determining the sum cover. You can also gift your mother a term plan as it provides her with a financial blanket. Select a term plan based on the requirements of your mother.