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Can I get life insurance on my parents?

You understand why you should get life insurance for yourself – for a small monthly premium, your loved ones will be financially protected if you are no longer around.

But there may be people in your life whose death would cause you financial hardship, including your aging parents. Which begs the question — can you take out life insurance on your parents?

Why you might want to take out life insurance on your parents

One of the most pressing questions when one or both of your parents die is whether they have enough money saved to pay the final expenses. These expenses can be significant, depending on the circumstances. If your parent spends several days, weeks or even months in the hospital before they die, there may be medical bills that need to be paid.

Surveys have shown that 56% of Americans have medical debt. More than 25% of Americans have medical debt of more than $1

0,000. Other studies have found that the average cost of dying in the United States is more than $19,000. Burial costs can cost more than $3,000, cremation fees can amount to over $4,000 and final medical treatments are the most expensive at over $12,000 on average.

Estimates vary, but the point remains: Death and dying in America can be very expensive.

If one of your parents dies and you need to move the remaining one in with you or into a care facility, the costs continue to rise. Paying off any remaining debt also adds to end-of-life costs.

Not everyone can save enough to cover final expenses. Health insurance policies, including Medicare, cover medical bills up to policy limits — but the coverage may not be enough to pay for everything.

This means that those who are left behind have to pay medical bills and any debts to family members. If you don’t have enough saved, one option is to make sure your parents have life insurance with enough benefit to cover these expenses.

Can you take out life insurance for your parents?

If your parents do not have life insurance, you may want to purchase a policy for them. But first you have to have what the industry calls an “insurable interest.” This is basically establishing that you would suffer a financial loss if the insured were to die.

Legitimate financial interests generally include, but are not limited to, the following expenses and liabilities:

  • Medical expenses at the end of life
  • Inherited financial obligations
  • Co-signed debts
  • Other costs for taking care of a parent
  • Burial and burial or cremation costs

If you can prove that you will cover these expenses, you will be able to purchase life insurance for your parents, if you have their permission and participation in the process. But they have to go through the medical insurance process to get coverage. This process determines whether or not the insurance company will provide coverage and how much it will cost. If they are not eligible for coverage, you may not be able to get insurance.

Pre-existing conditions may affect the insurer’s decision to cover your parents. For example, if they have health problems that are more advanced than average for their age, they may be able to get coverage but with higher premiums. The higher your parents’ risk of complications and death, the higher their premiums will be. The worst case scenario would be for the company to deny the insurance application due to underlying health conditions.

Your life insurance options for your parents are the same as they are for you. There are three main types of life insurance.

Term life insurance is coverage that extends to a certain date, called the term.

For example, you may be able to find a provider that covers your parents until they are 75 years old. By the time they reach that age, coverage ends, and hopefully they’ve saved enough to cover their expenses.

These policies usually come with smaller premiums compared to other plans. If your parents die before they reach the age of 75, the plan pays out the benefits as per the policy. (It’s worth noting that at Haven Life, people over the age of 64 cannot get a term life insurance policy.)

Permanent life insurance (whole life insurance is a common type) is valid for the rest of the insured person’s life. So, if you buy permanent life insurance, it will not expire until the covered person dies. When that happens, the benefit is paid out to the person who stands as beneficiary. This type of insurance is usually more expensive than life insurance because it covers the years when you are older and often less healthy.

There is also guaranteed issue life insurance. It is a whole life policy that skips medical guarantees and health issues.

Because there is no health evaluation, insurance companies charge much more for this type of life insurance. But it can be one of the best options for an aging parent with health issues if you can afford it. (And again, note that Haven Life does not offer a guaranteed whole life issue policy.)

How to get life insurance for your parents

The best choice is for your parents to buy life insurance for themselves, preferably when they are young(ish) and healthy(ish). Which, unfortunately, was probably when you were quite young, maybe even a child, so you probably couldn’t talk them into getting affordable life insurance coverage. (Even if you managed to persuade them, kudos to you!)

That said, it is possible to get life insurance for your parents. But first you need their permission to proceed. If they object to you getting life insurance for them, there’s really not much you can do about it.

Once you get permission, you should familiarize yourself with their financial situation. Find out how much they have in savings and take stock of their assets. Find out your parents’ wishes for a funeral or end of life celebration, and budget accordingly. Take an assessment of their overall medical condition and learn about their medical coverage – most importantly, find out how much their insurance will cover at the end of life.

This information will help you determine how much coverage your parents may need (or if you need coverage at all). From there, the application will go through the normal process, with medical examinations and so on. Again, however, Haven Life does not offer insurance to those 65 and older.

One last thought

Going through this experience with your own parents can often make you think about how you want to provide for your own children.

At Haven Life, we know the importance of getting life insurance for yourself, to protect your loved ones should the worst happen to you. Start your journey to peace of mind by getting a free life insurance quote online today.

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