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How Long Can Children Stay on Parents' Life Insurance Policy?

dateKnowledge Centre Team dateJune 24, 2021 views232 Views
Child insurance plan | Buy Child Saving Plan | Child Education Plan

Growing up includes making choices for yourself. One such choice begins with a question; how long can you stay on your parents' life insurance plan? When you direct this question to yourself, you must know that you are going in the correct direction. You might have recently graduated from university or acquired your initial stable job, or perhaps, you ultimately got your well-being in your own hands.

Whatever the reason might be, you must always know the duration for which you can stay on your parent's life insurance plan. Find out the duration for which you are covered under your parent’s life insurance.

Till What Age can Children Stay on Parents' Insurance?

In India, sons can legally remain on their parent's insurance policies until 26 years. After completion of 26 years of age, they necessitate looking for a separate life insurance plan for themselves.

However, this provision is different for daughters in the country as divorced or unmarried daughters can remain on their parent's insurance policy endlessly, as long as the parents keep on paying the premium installments.

Apart from this, if you are the one who is solely dependent on your parents and do not have a steady source of income, then, in that case, you can extend the duration of being on your parent's insurance plan.

What After you Complete 26 Years of Age?

Once you complete 26 years of age, you will not be eligible to remain on your parent's insurance in normal circumstances. Hence, it becomes important for you to plan your finances properly and start investing your funds in an independent insurance plan.

Most individuals in their mid-20s in India are clueless about their spending patterns and set a fixed budget. This is the reason when their extent of staying on their parent's insurance plan gets completed. They become confused about moving forward with their investments and choosing the best life insurance plans to manage their funds right.

Hence, a child staying on the parent's insurance policy must always understand and plan for their future investments well in advance so that no time is wasted in picking the right insurance plan once you cross the age of 26. Also, it is advisable to buy a term insurance plan early in life.

In addition to this, to assist you with your choices, mentioned below are some popular life insurance plans you can contemplate buying in your mid 20's or early 30's.

1. Consider buying a health insurance plan

There is nothing more valuable than sound health. You might know that every year a lot of people's wealth gets spent on healthcare. Even after putting in the best efforts to keep up good health, certain circumstances are not foreseen, and health is always one of those circumstances. Rather than running from pillar to post at the last moment, it is always more suitable to cover your health expenses with an appropriate health insurance plan that provides adequate coverage.

Buy a Health Insurance Plan

Your health expenses will be taken care of at the most economical premium installments. Furthermore, the limitations on the health insurance claim will additionally be limited.

Also, you can buy a health insurance policy for yourself along with your existing and future family. For availing of a medical insurance policy, all you require to do is choose a suitable policy after assessing your needs and pay timely premiums so that you can redeem your policy at the time of any medical emergency.

2. Count on a life insurance policy

Most youngsters in the present times do not plan about getting a life insurance policy as they feel they are still too young to get a life insurance plan. However, this is not the right conception, and every individual who is above 18 years of age and holds a steady source of income must invest their funds in a life insurance policy.

A life insurance policy is an ultimate investment tool for those times when you need your loved ones or family to remain financially guarded. You may have a huge debt from an education loan, or maybe your wife or kids might be dependent on your income. Then, in this case, they could rely on the life insurance plan you purchased if something unfavorable occurs to you abruptly.

Apart from this, taking a life insurance policy at a young age will always be more economical when juxtaposed to obtaining a life insurance plan at an older age. In addition to receiving the mortality benefits, you can always add additional riders like critical illness cover for obtaining comprehensive coverage.

Understand who can buy a life insurance policy.

3. Get a vehicle insurance

If you own a two-wheeler or four-wheeler, or both, you should hold a motor vehicle insurance policy. Motor vehicle insurance presents you with monetary coverage against any loss or damage incurred to you or your vehicle due to man-made or natural hazards like an explosion, earthquake, fire, collision, vandalism, and various more.

Apart from this, the Government of India, under the Motor Vehicles Act, 1988, has made it compulsory for every vehicle owner in the country to hold suitable vehicle insurance to safeguard themselves from third-party insurance or any damage taking place in a road accident.

Hence, it might not be wrong to state that an extensive motor vehicle insurance policy assists in covering the accident expenses and obtaining servicing bills at the time of application for the claim.

After looking at all the points mentioned above, it is evident that obtaining an insurance policy has become a necessity in contemporary times. Once you have crossed the specific age and are no longer a part of your parent's insurance plan.

It is high time that you start looking for an independent insurance policy to safeguard your coming future. You may choose the best life insurance plan from Canara HSBC Oriental Bank of Commerce at the most affordable premium rates for your financial requirements and goals.

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Frequently Asked Questions (FAQs) for Life Insurance

The premium is one of the most important factors to consider before buying a policy. Many people buy a life insurance policy with a high sum assured but are unable to process the premiums for the entire premium payment tenure. You can get a better idea of the premium outgo with the premium calculator available in the 'Tools and Calculator' section of www.canarahsbclife.com.

Life insurance plans come with several riders which increase the efficiency of the policy for the buyer. For instance, if you have a history of terminal illness in your family it would be advisable to opt for terminal illness rider with your term insurance. Riders or add-ons help in customising the standard policy benefits for the requirement of different families. The iSelect term insurance plan comes with a built-in cover for terminal illness, and option for protection against accidental death or disability. You can also opt to cover your spouse's life under the same policy by paying an additional premium.

Insurance companies calculate the premiums based on several factors such as age, gender and occupation.

Age:It is one of the biggest factors that influence life insurance premiums. Premiums tend to be low when the life insured is younger as the chances of contracting diseases is low. Young people also opt for policies with longer tenures and pay premiums for a longer duration, which makes the policy cheaper for young people.

Gender:The insurance premium for women is generally lower when it comes to life insurance plans. Women live longer and pose a lesser risk of a claim leading to lower premiums for them.

Lifestyle habits:The premiums for people who smoke or drink is always higher due to higher health risks.

Policy term:Policy terms are also taken into consideration by insurers while deciding the premium amount. Policies with longer tenure are cheaper as compared to short-duration policies.

Mode of purchase: The platform that you use to buy the policy also determines how much you will have to pay for the plan. People who buy life insurance policies online have to pay lower premiums as compared to offline policies.

Occupation:The nature of your work is an important factor that influences the premium amount. Certain occupations like shipping and mining are considered more dangerous as compared to jobs in services industries. The insurance premium rises with the risk profile.

Processing life insurance claim is a transparent and smooth process with Canara HSBC Oriental Bank of Commerce Life Insurance.

In case of the death of the life insured, the nominee will have to intimate the company by filling a Death Claim Form and sending it to the nearest branch office.

Once the form is received, the claim is registered by the insurer.

After the registration of the claim, the company will send the claims pack along with the related forms such as physicianâ s statement form and employer certificate that need to be filled.

Along with the duly filled forms a few documents such as original [policy document, death certificate, copy of bank passbook, hospital or treatment records, photo identification and address proof have to be provided.

The claim is processed on the submission of relevant documents. Once the documents are verified, the claim amount is released post all due diligence.

Household expenses rise with age. The cost of children's education increases along with other lifestyle expenses. The iSelect term plan offers an option to increase the cover according to the life stage. If opted, the insurance cover increases by 25% at every 5-year terminal till the 20th policy year.

Even though a life insurance policy is bought to protect your family in your absence. There are chances of the claim being rejected due to several factors.

False information: If the policyholder provides false information or conceals important information while buying the policy, the insurer has the right to reject the claim after his/her death.

Type of death: Deaths due to suicide in first policy year, intoxication or pre-existing disease is not covered under life insurance.

Premium payment: The payment of premiums on time is of utmost important to avail the benefits of life insurance. Life insurance policy may lapse on the failure to pay the premiums

Nominee details: An insurance company can put the claim on hold if the nominee details have not been filled or not been updated by the policyholder.

Suicide: If the life insured commits suicide within 12 months of buying the policy, the insurance companies generally pay 80% of the total premiums paid.

Buying life insurance online is not only safe but a better option. Online life insurance policies have lower premiums and the individual is not required to visit the insurer's branch or a bank. Online insurance policies also offer higher benefits. Customers should, however, buy online policies only from credible insurers and should check for SSL certificate on the website to ensure that the website is legitimate.

The cost of life insurance policies varies depending on factors like age, gender and occupation. The average cost of life insurance plans, especially term plans, is very low compared to the amount of coverage offered.

An individual is allowed to have multiple life insurance policies. People opt for more than one policy to increase the cover or avoid claim rejection. In case of multiple policies, even if the claim is rejected by one insurer, the beneficiaries may receive the benefit from a different insurer.

Life insurance policies are of different types. In the case of unit-linked or endowment policies the policyholder receives the maturity benefit at the end of the policy term. However, in the case of term insurance plans, there are no maturity benefits. The death benefit is only paid out after the death of the life insured.

When you buy life insurance, the insurance company asks for the nominee details. Only the person named as the nominee in the policy can cash out a life insurance policy in case of death of life insured.

A life insurance policy is generally taken for a specified period. After the policy duration of a term plan gets over, the policy simply terminates and ceases to exist. However, in the case of unit-linked plans or endowment, you can use the policy as a tool for retirement planning and the accumulated corpus is used by the insurer to pay you monthly amounts for your entire life.

If a policyholder purchases a term plan for 25 years and dies during the policy term. The family receives the death benefit. In the case of iSelect term plan, the policy provides four payment options to the beneficiaries. If the regular payment options are chosen the policy works as a source of regular income.

It is a popular misconception that life insurance is only for accidental deaths. A term life insurance plan like iSelect also covers terminal disease along with death. A terminal illness cover is important as health insurance pays only for the cost of treatment and hospitalization, but a terminal illness cover pays you a lump-sum amount which takes care of other expenses. On the other hand, unit-linked policies such as Invest 4G cover death and also provide decent returns for other financial goals such as buying a house of child's education.

It is ideal to buy life insurance in your early 20s because it’s is the time when people have just started with their professional life and so there are lesser responsibilities and financial liabilities to take care of. Also, if you buy life insurance at this age, you will be paying relatively lower insurance premiums since it’s a due fact that mortality rate in case of young people is low. And that is why insurance companies offer lesser premium rates to younger people as they think that they are most likely to be fit and healthier with less chances of filing a claim in future.

Once you have cancelled your life insurance policy, you will instantly lose your life insurance cover. Afterwards, your insurance company will get in touch with you and ask for valid reasons regarding the cancellation of your policy. In case you cancel your life insurance policy within the grace period, i.e. 15 to 30 days, depending on your insurer, then insurance company will reimburse the premium amount paid by you. But, no refunds will be paid to you if the policy is cancelled after the grace period.

Yes, you can take life insurance under Married Women’s Property (MWP) Act, 1984 only if you are a married man and a resident of India. Buying a life insurance plan under MWP Act would be helpful in saving your family’s financial well-being when you are not around. As per this policy, only wife and children would be eligible to receive the death benefits. You can also buy a policy if you are a widower or a divorcee. However, in that case, you can give your child’s name as your beneficiary. It is very simple to buy a life plan under MWP Act. All you need to do is to fill up an MWP addendum while purchasing an insurance policy.

Yes, there are different payment options for you to pay premiums. Here’re some of them

    1. Regular premium payment option – This premium payment option allows you to pay premiums equal to your policy term either monthly, quarterly, half yearly or annually.

    2. Single payment option – Through this premium payment option, you can pay the lump-sum amount in one single payment.

    3. Limited payment option -In this premium payment option, you can pay premiums for a specific period of time less than policy term either monthly, quarterly, half yearly or annually, but benefits of insurance can be enjoyed for a longer period of time.

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