As Indian parents age, many adult children start wondering: should I buy life insurance for them? It comes from a good place — a desire to protect the family from the financial shock of losing a parent, or to cover funeral costs and estate obligations.
The honest answer depends on three things. First: do your parents have outstanding financial liabilities that would fall to the family — loans, business debts, obligations that outlive them? If yes, insurance that covers that amount makes sense.
Second: does your family depend on one or both parents' income or pension? If a parent is still working or receiving a significant pension that funds family expenses, losing that income is a financial event — and insurance can bridge the gap.
Third: is it financially viable? Premiums for term insurance above age 55–60 are significantly higher, and above 65, options become limited. For older parents, a guaranteed savings or pension plan may serve a better purpose — generating income for their living expenses rather than a lump sum payout.
What's almost never the right answer is buying an expensive endowment plan for an elderly parent at the insistence of an agent. The premium-to-benefit ratio at high ages rarely justifies the cost unless there's a specific, well-defined financial need being covered.