Can You Get Life Insurance For Your Parents?

Can You Get Life Insurance For Your Parents?

Can You Get Life Insurance For Your Parents?

Life insurance is always an option to cover your parent's end-of-life expenses. It can offer you the peace of mind needed during such a stressful time. However, to purchase a policy on a parent, you'll need to get their consent and proof of insurable interest. The specific type of policy you buy will ultimately depend on their respective age, their financial situation, and what their health looks like. 

Obtaining life insurance is very important when looking to prep for the final-stages-life of a family member or loved one. You need to get the right life insurance for your parents that give you the most financial support to help you deal with the stressful and difficult period you'll be facing.

Here Is a Step-By-Step and Comprehensive Guide For Getting Life Insurance For Parents

When purchasing any kind of life insurance, you likely start with yourself. After all, everyone wants to leave their loved ones without worrying about financial stress. The burden that they have to deal with is big enough as it is. Having to pay unexpected end-of-life expenses will only add to that stress. By protecting them with life insurance, you are effectively protecting yourself. It's a good way to ensure you aren't hit with high unexpected costs that could negatively impact you financially. 

The majority of times, when a parent dies, the surviving family members are left having to pay the hefty bills. Unfortunately, many people don't have the emergency funds to pay for these unexpected life events. This could include hospital or hospice care and even medical bills. It can also include the costs of funeral arrangements.

By utilizing the steps below, you can better protect your entire family from the burden of having your parents pass. You will learn how to effectively purchase life insurance for your parents.

  1. Figure Out The Coverage Requirements

First things first, you need to analyze how much coverage they require. On average, the cost of a funeral can exceed $9,000. This average total cost might not even cover various additional services either. These additional expenses can include transportation, renting a funeral home, buying a burial plot, and even purchasing a tombstone. You want to try to obtain estimates from different local funeral homes, which can help you figure out the final costs and give you a better idea of what kind of services you need. You also need to add all of the debt or final expenses that your family has, including any unpaid medical expenses. This can give you a much clearer estimate of the coverage you need.

  1. Find and Get a Policy That Fits Their Needs

There are various kinds of life insurance policies out there. Before going ahead and choosing one, you need to look to see how the insurance policy works, what it includes and see whether or not it matches your needs. Don't choose a policy that is cheaper purely to save money. Instead, you want to identify a policy that fits your unique needs.

  1. Figure Out Who Will Own and Pay For It

Once you've decided to get a life insurance policy, it's time to figure out not only who will own it but also who will be responsible for paying for it. In most cases, you will require your parent's authorization to purchase a life insurance policy for them. Typically, this consent can be obtained by effectively having them sign the application form. However, some insurance companies will require a medical exam to be conducted. This is typically referred to as a life insurance exam.

To purchase it for someone else, you need to demonstrate what is known in the insurance world as "insurable interest." You would qualify for someone that has this type of interest if you would be financially impacted in the event of a death from the person being insured. You automatically qualify for this if it's a family member.

Along with demonstrating that you qualify for insurance interest, most companies will require a full exam to qualify. You'll find that these requirements will vary based on the total coverage amount and certain other factors.

For any smaller policies, a few companies may offer life insurance without requiring any medical exam. Typically, these policies are issued purely based on the answers made on the application itself.

Your circumstances would effectively determine the right person to own the policy. Usually, the person that owns the policy is the same one responsible for paying for it. Certain policies may require someone specific to be the qualified owner of it. Your agent can help you figure out who would be the right owner, and they can effectively walk you through the different options available to choose from.

Regardless of who owns the policy, you need it to be easily accessible. You need the owner to effectively understand the responsibility they have and who would be willing and able to be the point of contact with the provider.

What's The Best Insurance For Parents?

Besides looking at the health of your parents, when you are choosing a life insurance policy, the other big thing you need to look at is their age. You'll find that varying age groups will need to protect different things.

Those Ages 25 to 40: A term policy typically makes the most sense for younger parents. Why does it make the most sense? Because you generally want to protect various things like car payments and mortgage payments. When you get term insurance, you will usually have a much lower premium to pay monthly. Also, the coverage amounts of these policies are typically higher because term insurance is utilized to replace the income the family would be using. The specific coverage only lasts for a specific term. This term is typically anywhere from 10 to 30 years. To qualify for these plans, you would typically need a medical exam.

Those Ages 40 To 85: For those older in this age range, whole life insurance is usually the best option. Why is it the best option? Because these parents are either retiring soon or have already retired. These policies typically build out cash value and don't stop covering you after a set period as long as the premiums are being continually paid. 

In the majority of cases, you will effectively qualify without needing to take any sort of medical exam. This is true even if you didn't qualify previously. You can expect to pay lower premiums the healthier and younger you are. Therefore, you want to try to lock in a lower rate early, so you aren't forced to pay higher premiums if you get sick in the future. Any senior over the age of 60 can expect to pay much more than younger parents. The same is true for those 70, 80, and so on.

Get Affordable Life Insurance Options For Parents

When looking for life insurance for your parents, you're likely aware it's expensive. Luckily, there are different kinds of whole life insurance, including burial insurance, that will help in specific cases. This can help you budget better when looking to take proactive steps toward securing your family's peace of mind no matter what financial situation you find yourself in.

A good way to effectively keep your insurance costs low is to purchase life insurance early. You want to do this before you age and develop any health issues. Waiting around is only going to increase your insurance premiums. If you qualify for a standard plan, you could save hundreds every year in premiums by doing it early. 

If you don't qualify because of health complications, you can expect your insurance premium to be much higher because of the increased risk of insuring you. If you are a tobacco user, you can expect to pay higher premiums because of the health complications it can lead to. However, by getting your insurance early on in life, you can lock in a standard rate before these complications cause changes to your health and risk factor.

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