Term Insurance for Father
Table of Content
What is Term Insurance for Father?
Being a father gives you the obvious joy of having children and spending quality time with them, but it also comes with its own set of responsibilities. At the same time, it is understood that you would make all possible efforts to give your children a happy and comfortable life; it's important to realise that life is uncertain. Your absence can jeopardise your children's future, which is why buying term insurance as a father is crucial.
A term insurance for father becomes important to secure the future of his child. The term life insurance bought by the father provides an assured sum to the nominees in case of his unfortunate and untimely death. This amount helps your loved ones financially, carrying forward their lives even though the emotional loss can never be repaired.
Why Term Insurance is Essential for Fathers
Term insurance is important for fathers to financially secure their children's future so that their education, day-to-day expenses, marriage costs, etc, do not get impacted in case of the father's untimely demise. An adequate sum would help the nominees to continue their lives and at least not be too worried about the monetary aspect. This is why it is essential to buy term insurance for father to protect the child's future financially. After all, knowing that your child's financial future is secured will certainly give you peace of mind as a parent.
Key Benefits of Term Insurance for Fathers
Listed below are the key benefits of buying term insurance for fathers:
1. Pocket-friendly due to affordable premiums:
As a father, you can buy term insurance plan without worrying too much about the premiums, as they are very affordable when compared to the high cover amount they offer in return. Moreover, to make premiums even more affordable and pocket friendly, try buying term insurance for father as early as possible, as the earlier you buy, the lower your term insurance premium is likely to turn out to be. You can take benefit of an online term insurance calculator to check the expected premium, too.
2. Financial protection for children:
One of the biggest benefits of term insurance bought by a father is the peace of mind that comes from knowing that your children's future is financially protected through the sum assured in your unfortunate absence.
3. Income tax benefits:
Buying term insurance also comes with income tax benefits1, which can help you, as a father, in reducing your total tax outgo. The premium paid towards term life insurance is eligible to be claimed as a tax deduction up to Rs 1.5 lakh every year under Section 80C. Moreover, the sum assured received as maturity amount is also fully tax free.
4. Add-on riders for wider coverage
Besides offering sum assured as cover, term insurance also provides add-on riders that further enhance overall coverage. These usually include critical illness cover, accidental death benefit rider, etc.
5. Multiple payout options to choose from
When buying term insurance for father, keep in mind that your nominees will have the benefit of choosing the payout option, whether they want a lump sum payout of the cover amount, a combination of lumpsum and income, or a monthly or yearly income payout.
6. Different types of term life insurance
Another benefit is that there are many types of term life insurance to choose from, like Level Term Plans, Decreasing Term Insurance, Increasing Term Insurance, Term Insurance with Return of Premium, etc.
How to Choose the Right Term Insurance Plan for Fathers
Firstly, remember that there is no one-size-fits-all approach when buying term insurance for father. Based on your financial obligations, assets, and dependents, you should decide upon the type of term insurance plan and the appropriate insurer, too. Factors such as your age, cover amount, required tenure, add-on riders, premium cost, financial goals, flexibility in policy terms, etc., should be considered when going for the right term insurance plan.
7 Poor Excuses for Not Buying Term Insurance
My wife will look after the child.
In case of your untimely death, yes, your wife is likely to do her best to take care of the child and the household. But when you can make her life a little easier through term insurance, why not do it? The insurance cover will help her financially handle everything in a better manner in your absence. This will prevent her from being over burdened suddenly if you unfortunately pass away.
I’ve Already Invested for My Child
Even if you have already begun investing in your child's school education or higher education through options such as ULIPs or mutual fund SIPs, what if you are no longer? Who will manage those investments and continue the needed and pending contributions for further life goals like a child's marriage? This is where a term insurance can help by providing a big cover amount to financially secure your loved ones' future.
I Already Have a Life Insurance Plan
You might think that you already have a life insurance plan, like a money-back plan or endowment plan. Then why buy term insurance plan? But that is where you go wrong. You need to solely have a term insurance plan as it directly gives the benefit of purely the sum assured as cover when you unfortunately die. There is no unwanted mix of insurance with investment in this case, which also helps term plans offer affordable premiums.
My Employer Offers a Term Insurance Plan
Despite your employer offering term insurance, always buy a separate term insurance plan for your loved ones. This is because as and when you keep changing jobs throughout your career; your employer's term insurance won't get extended to cover you once you leave that company. Moreover, if someday you want to own a business, you would be left without a term insurance after leaving your job. This would leave your children's financial future uncertain upon failure to buy term insurance for father.
I'll Buy a Term Plan Later; I Have EMIs to Pay Now
Tomorrow may never come. That is why you should not keep delaying the decision to buy term insurance, thinking that you have so many EMIs right now to repay. Given that term insurance premiums are affordable, buy them as early as possible to protect your loved ones’ financial future.
I have very little money left after taxes.
Here, remember that the premium paid towards term life insurance is eligible to be claimed as an income tax deduction up to Rs 1.5 lakh every year under Section 80C. Moreover, the sum assured received as maturity amount is also fully tax free.
I'm young, so dying seems unlikely.
In recent years, especially post COVID, many youngsters have become prone to heart attacks or cardiac arrests, even those in their 20s or 30s. As life is always uncertain for every age, ensure that you buy term insurance for your family as early as possible, which will also result in smaller premiums since you are young.
When Is the Right Timse to Buy Term Insurance?
Buy term insurance as early as you can in life, ideally in your 20s itself. The earlier you buy, the lower your premium can turn out to be, and hence the better it is for your later stages in life when you become a father and have added financial responsibilities and expenses. On the other hand, the later you buy, such as in your 40s or 50s, the higher your premium cost would be since you are no longer young and now more prone to health issues than in your 20s or 30s, thus increasing the risk for insurers.
Summary
It's understood that being a father is both a joy as well as a responsibility. Besides earning money for your family, it's important to purchase term insurance for the father, as the coverage would help secure your children’s financial future.
FAQs on Term Insurance for Father
Q: Can I buy term insurance for my father?
Ans. Yes, you can buy term insurance for your father to financially secure his future, especially if he is dependent on you.
Q: What is term insurance for father?
Ans. The term life insurance bought by a father provides an assured sum to the nominees in case of his unfortunate and untimely death. This amount helps your loved ones, such as children, financially carry forward their lives.
Q: Are there any tax benefits for term insurance for fathers?
Ans. The proceeds received under a term insurance policy on death of the life assured shall be fully tax free in the hands of the recipient.
Q: How does age affect term insurance premiums for fathers?
Ans. The earlier you buy term insurance as a father, like in your 20s or early 30s, the lower your premium amount is likely to be. Whereas the more you delay, the higher the premium amount can become.
Q: What is the process to buy term insurance for father?
Ans. You can visit one of India's leading insurers, HDFC Life, when planning to buy term insurance for father. Check the insurer's claim settlement ratio and financial stability before finalising and buying from any insurer. As far as the process is concerned, you can visit the insurer's website, branch or through a third party portal to buy term insurance.
Related Articles-
- Term Insurance for NRI in India 2024| HDFC Life
- Buy Best Term Insurance for Women in India 2024| HDFC Life
- Term Insurance for Parents: Affordable Coverage and Benefits
- Buy Best Term Insurance for Self Employed in India 2024| HDFC life
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1. Tax benefits are subject to conditions under Sections 80C, 80D, Section 10(10D) and other provisions of the Income Tax Act, 1961.
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