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How To Buy Life Insurance For My Parents

Term life insurance covers a certain period of time, such as five, 10 or 20 years. The coverage ends when the policy term ends. One of the advantages of term life insurance is that it costs less than other types of life insurance. Term life insurance might be best if your primary concern is covering the years of a mortgage and other debt, or for replacing income after a parent passes away.

how to buy life insurance for my parents

Universal life insurance and whole life insurance are options for a parent who wants life insurance in place no matter when they pass away. These policies also have the potential to build cash value, although it can take many years with some policies to build any significant cash value.

Fortunately, death benefits from a life insurance policy are paid tax-free to the beneficiary. An adult child could be both the policy owner (who is ultimately responsible for paying the policy premiums) and the beneficiary.

Michelle is an insurance analyst at Forbes Advisor. She has been a journalist for over 30 years, writing about insurance for consumers for the last decade. Prior to covering insurance, Michelle was a lifestyle reporter at the New York Daily News, a magazine editor covering consumer technology, a foreign correspondent for Time and various newswires and local newspaper reporter.

Yes, you can typically buy life insurance on your parents if you meet certain requirements, but it's not something you can do without their knowledge or consent. In some cases, your parents may need to undergo a medical exam. As with shopping for your own life insurance, you'll have more options and a less expensive premium if you purchase the policy when the parent you're insuring is younger and healthier.

You can typically buy life insurance for parents when you have "insurable interest." That's when you're the one who will be responsible for the financial consequences of your parent's death. Eligible financial responsibilities might include but aren't limited to:

Your life insurance company can help you determine exactly what qualifies you to take out a policy on your parent(s) and how you should provide proof. However, it would likely be easier for your parents to take out a life insurance policy themselves and name you as the life insurance beneficiary, if they're able. They'll need to go through a similar application without the added qualification of proving your insurable interest in them.

You'll need consent from your parents before you purchase a life insurance policy on them. They will need to be legally competent to provide such consent. During the application, you'll also need to provide their Social Security number, name, and address.

Depending on the life insurance company and the types of life insurance plans you hope to purchase, your parents may be required to undergo a medical exam. The results of that exam will be shared with the life insurance company, and the insurer will use that information to determine your life insurance options, including the following:

Choose the beneficiary or beneficiaries of the policy carefully. As the purchaser of the policy, you'll be the policyowner and thus have the responsibility of setting yourself and/or other close loved ones as the beneficiaries. Your parents will be the "named insured" and won't be able to name or update the beneficiaries themselves.

That depends on which policies you qualify for, how much you can afford in premium payments, and the level of death benefit that makes sense for you. Buying a life insurance policy on your parents can offer you a safety net upon their death when you're dealing with their funeral services, final expenses, and any other details. To select the right level of coverage, consider what those costs might total, and compare them with the death benefit levels and premium you qualify for. Learn more about how much life insurance you need.

Please note: The above is meant as general information to help you understand the different aspects of insurance. Read our editorial standards for Answers content. This information is not an insurance policy, does not refer to any specific insurance policy, and does not modify any provisions, limitations, or exclusions expressly stated in any insurance policy. Descriptions of all coverages and other features are necessarily brief; in order to fully understand the coverages and other features of a specific insurance policy, we encourage you to read the applicable policy and/or speak to an insurance representative. Coverages and other features vary between insurers, vary by state, and are not available in all states. Whether an accident or other loss is covered is subject to the terms and conditions of the actual insurance policy or policies involved in the claim. References to average or typical premiums, amounts of losses, deductibles, costs of coverages/repair, etc., are illustrative and may not apply to your situation. We are not responsible for the content of any third-party sites linked from this page.

You can typically buy life insurance for parents when you have \"insurable interest.\" That's when you're the one who will be responsible for the financial consequences of your parent's death. Eligible financial responsibilities might include but aren't limited to:

When buying life insurance, we often only think about whether we need to purchase a policy for ourselves. The reason we purchase life insurance is to protect our loved ones from experiencing a financial burden when we pass. Part of protecting them is protecting yourself, especially from unforeseen bills that could impact you financially.

Many times when a parent dies, surviving loved ones are left with the bills and may not have the resources needed to handle any end-of-life expenses their parents might leave behind such as medical bills or hospice care. Not to mention the thousands of dollars needed to cover their funeral expenses.

Apart from demonstrating you have insurable interest, some companies may require the insured to take a medical exam to qualify for insurance or sign an application. These requirements depend on a variety of factors, such as the coverage amount.

Your circumstances will determine who is in the best position to own the policy. Typically, the person paying the insurance premiums is also the owner of the policy. Some policies may require a specific person be the owner. Your insurance agent can help you choose the best owner and can walk you through the options available.

Explaining the purpose of the discussion is very important. Make it clear that your intention is to support their wishes exactly as they describe. Set aside a time to discuss how they wish to be remembered and determine how much life insurance is needed to pay for their final arrangements.

The cost of life insurance is calculated using several factors. The age and overall health of the insured are weighted the most. Term insurance is usually more affordable but can be difficult to qualify for if you have pre-existing conditions and have to take a medical exam. Whole life policies tend to carry a higher premium, but also include benefits that most term policies do not have (including cash value and faster claim payouts in some cases).

When searching for life insurance for parents, you may already know that it can get very expensive. Thankfully, there are types of whole life insurance such as burial insurance that specialize in small face life insurance policies (see also Burial Insurance for Seniors). These allow you to budget accordingly when taking steps to secure your family's peace of mind, regardless of your financial situation.

Medical exams can prevent you from qualifying for a policy if you have health issues. If your parent does have a pre-existing condition, there are still options available. A majority of whole life polices (including burial and final expense) do not require a medical exam. Coverage can often be issued by answering a few health questions on the application.

Whether you're searching for your own life insurance policy to cover your family or looking at life insurance for a parent, the companies above are a good place to start. To narrow it down, it's helpful to consider your personal circumstances. Are you young, in excellent health, and looking for a cheap policy that last around 30 years? Check out Protective or Haven Life's Haven Term policy. If you're in good health and are willing to pay a few more dollars a month, Haven's Haven Simple policy is perhaps the breeziest way to get term coverage.

On the other hand, if you're older, in poor health, and need permanent coverage, one of Mutual of Omaha's final expense policies is likely a better fit. Or, if you're looking for a permanent policy that pays dividends, consider Northwestern Mutual and New York Life. But don't forget Nationwide, which offers a wide range of options plus benefits for chronic, critical, and terminal illnesses. And if you already insure with State Farm, check your discount by bundling life insurance with your existing insurance policy. 041b061a72


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