Life Insurance For Parents
Why would you want to buy life insurance for your parents? Buying life insurance whether permanent or term may not be a pleasant experience for you; however there are many credulous reasons why it may be the wisest thing to do. If they are on a tight budget and can’t afford the premiums but have concerns pertaining to burial expenses or perhaps a debt due to recent medical bills, then having life insurance that your purchase for them might be a real blessing. It should certainly relieve their worry about the financial burden they might be leaving to their loved ones.
Another question you may have might be whether it is even possible to buy life insurance coverage on your parents? Yes, it is possible however there is a requirement in order for you to buy life insurance on your parents called “Insurable Interest”. If your parents are in agreement and willing to sign an application, and they are willing to have a medical exam, then there is nothing stopping you from taking out a policy in their names.
If due to their age and maybe ill health they may be prevented from being eligible for an affordable policy, there are insurance companies that specialize in high risk policies for older persons. This may require some research on your part to find a life insurance provider that is well versed with the underwriting process involved in qualifying your parents for coverage.
If you simply need to provide coverage for burial expenses, a policy with a small pay out of approximately $10,000 may do the job. You might have to settle for a policy with a two year waiting period, in case of a natural death before you can claim any death benefits. Another option that a lot of people choose is a single-premium policy, for which you pay a lump sum premium upfront, that can be claimed after death.
How much coverage do you need? That could vary with each situation. Evaluate your parents estate and if taxes would be a heavy burden for the heirs to pay then you can determine the amount of coverage needed. There could be some assets that would be difficult to divide, therefore insurance funding could offset the hard asset lessening the tensions and hard feelings created among the heirs. You can purchase a larger policy that you can borrow against in the event medical expenses occur or you need to pay off other costs at the time of your parent’s death.
None of us cherish the thought of receiving financial benefits from the loss of a parent; however not having the proper amount of coverage at the time of their death will be many times worse.
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