Life Insurance for Parents
- You can buy life insurance for parents if you have their consent and you can prove insurable interest. Learn what you need to buy life insurance for parents.
You can buy life insurance for your parents if you have their consent and can prove insurable interest, which is proof that you will suffer financial hardship as a result of their death — for example, they serve as a caregiver for your children or have significant debts to pay off that would fall on you to handle.
Can You Buy Life Insurance for Parents?
You can buy life insurance for your parents if you meet the two criteria: proof of insurable interest and have their consent. Without it, an insurer will deny your application. Typically, a permanent life insurance policy that covers after-life expenses is sufficient for a parent. If you’re concerned about funeral costs and debt, you may want to consider a savings account or a pre-need insurance plan that is easier to purchase.
How to Buy Life Insurance for Parents
Whether you have a close relationship with your parents or not, you will need to include them in this process. There is significant information you will need to get started:
- Full name and date of birth
- Contact information
- Social Security number
- Driver’s license number
- General medical history
- Primary doctor information and contact
You parents will need to answer some brief questions about their health and possibly undergo a medical exam — a company representative may visit to check your parent’s blood pressure, note their weight and height and collect a urine sample. Regardless of the type of life insurance policy you purchase for your parents, the insurer will require their signature.
You do not want to lie about buying life insurance for parents. If you forge their signature, falsify their medical information or buy a plan without their consent, the insurer could deny your claim and even file criminal charges against you. If you’re purchasing life insurance for a parent who suffers advanced dementia or Alzheimer’s, discuss your concerns with an insurance agent before you start the buying process.
Why Would You Buy Life Insurance for Parents?
Buying life insurance for parents gives you the financial protection you need in the event one or both of your parents die and they have significant medical expenses, outstanding debt or zero savings to cover funeral and burial costs. The death benefit payout can help:
- Pay off financial debts: If your parents have outstanding credit card debt or loan payments, these will still need to be paid for after your parents have passed away.
- Reduce or eliminate medical bills: Your parents may have died while in the hospital due to health issues, leaving you with significant medical bills that can add up quickly.
- Funeral and burial expenses: Typical funerals cost $7,000 to $12,000 and can be a large financial burden for family members if they need to pay for a parent’s funeral out of pocket. Even a funeral with cremation can run between $3,000 and $,7000.
- Living expenses for a remaining parent: When one parent passes and leaves a living spouse, adult children will often move the family member closer to them to help care for them daily. Unexpected moving and living expenses can add up quickly.
There are important conversations you should have with a parent before you purchase life insurance. For example, what are their medical needs, end-of-life wishes and funeral plans? Another factor to consider is whether your parents own a home or have a mortgage balance that will need to be handled.
Best Life Insurance Policy for Parents
The best way to get life insurance for parents is to encourage them to apply for their own policy and list you as a beneficiary on their plan. You can help them navigate the process and pick out the best coverage that will meet their needs. Depending on their age and health, a guaranteed universal life insurance policy could be a great option, especially if they don’t know whether they want a term or permanent plan but still need lifelong coverage. It’s a cash value account that is guaranteed to not drop below zero.
A final expense life insurance policy is another option that will help pay for parents’ funeral and burial costs when they pass away. It is also known as burial insurance and is a type of permanent life insurance that lasts until your parents pass away as long as the premiums are paid and current. Average premiums can range from $50 to a few hundred dollars a month and offer death benefit amounts from $5,000 to $25,000. This type of plan does not require a medical exam, but you will still need your parent's consent and signature. They will also likely have to answer a few brief medical questions.