Yes, You can gift a term life insurance policy. Let us dive into it.
Term life insurance can be an excellent gift for your parents, spouse, children, or loved ones. It provides financial security in the event of your death, and can help to ensure that your loved ones are taken care of financially.
In this article, we discuss the benefits of gifting term life insurance, as well as some important things to keep in mind when purchasing a policy as a gift. We also provide some tips on how to choose the right policy for your loved ones.
If you’re looking for a thoughtful and meaningful gift that will provide financial security for your loved ones, consider gifting them term life insurance. It’s a gift that they’ll appreciate for years to come.
The big question is whether you can gift term life insurance to your parents or other loved ones. The answer is undoubtedly yes. Here’s learning more about the same below.
Gifting Term Life Insurance – Things That You Should Know
Term insurance can be given as a gift. However, a majority of policies may only be gifted to immediate family members or individuals who are related to you. There are some policies that may allow gifting to extended family members and friends. It depends on the type of policy that you select, although most plans may be purchased as gifts for parents, spouses, and children.
Gifting term insurance to your loved ones is a good idea, considering the uncertainty of life. The coronavirus pandemic has made us all realize how life is uncertain and tragic events can take place anytime. Senior citizens and children are even more vulnerable, along with women who are not professionally employed. You should thus gift them term life insurance as a measure of financial security to tackle any crisis.
Elderly individuals usually have the toughest time tackling rising inflation and health issues. You can help your parents spend their sunset years comfortably by gifting them term insurance. At the same time, you can also financially secure your family by gifting term insurance to your spouse or any other relative. Gifting a plan to your child ensures that financial planning and future security begin for him/her from an early age.
Important Points That You Should Keep In Mind
Here are a few aspects that you should remember while buying term life insurance as a gift.
- Remember To Take The Consent Of Your Loved Ones
Make sure that you provide the signed consent of the policyholders along with your own. This will, anyway, be required by most term insurance policies. Always discuss the modalities of the policy with your parents, spouse, or other family members.
- Choose Your Coverage Wisely
You can use a term insurance premium calculator to understand the amount that is payable for a certain coverage amount. Discuss the coverage with the policyholders and figure out how much they actually require. You can also choose riders to widen the scope of coverage, including critical illness, hospital care, and others that may be useful for specific age groups.
- Assess Medical Conditions And Other Factors
Most insurance policies will require the medical background and history of the policyholders, along with information on pre-existing conditions and check-ups. Being clear about this information is necessary while avoiding concealing anything from the insurance company while buying the policy.
- The Payout Option
You should choose the payout option for the sum assured while purchasing your term life insurance policy. This can be a lump sum amount or monthly payments for a specific duration. Consult the policyholders before choosing the same.
These are some aspects that you should not forget while buying term insurance as a gift for your parents or other family members.
Why Term Insurance Is The Best Gift For Your Family
There is nothing like term insurance when it comes to finding a perfect gifting option for your family members. Here are some reasons worth noting in this regard:
- Term insurance brings greater peace of mind to your family members, knowing that their loved ones will be financially secure in their absence.
- Gifting a loved one term insurance means that you care about their psychological well-being and sense of security.
- This gift also means additional financial security for your household, especially for your children or other relatives.
- You can ensure greater financial stability for the family while acknowledging the human life value of the policyholder with this gift of term insurance.
- Term insurance plans come with several tax benefits that the policyholder can get if he/she starts paying premiums for the same in the future. If you pay them yourself, then you will also get these benefits. These include deductions on premium payments up to Rs. 1,50,000 under Section 80C and exemptions on the sum assured payout under Section 10 (10D) in the hands of the policyholder’s nominees/beneficiaries. At the same time, adding health-related riders can help you get additional tax deductions under Section 80D on these premiums. This is either Rs. 25,000 for non-senior citizens or Rs. 50,000 for senior citizens.
These are some reasons which illustrate how term life insurance is an ideal gifting option for your parents, spouse, children, and even other family members. Just ensure that you discuss things with your intended recipient before going ahead.