Life Insurance for Parents

Eric Van Haaften Best Life Insurance Rates by Age

You’re likely here because you’re considering life insurance for your parents. This move not only preserves their legacy but also protects your financial future.

We’re eager to guide you through this process, highlighting the distinct advantages of term, whole, and universal insurance.

Let’s explore how each policy can be tailored to your parents’ needs, ensuring you find the perfect coverage option for your mom and dad.

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Can you buy life insurance for my parents?
Why should you buy life insurance for your mom and dad?
How to apply for life insurance on your folks?
Is term life insurance the cheapest option for parents?
Is universal or whole life better for burial insurance?
FAQ: Getting Life Insurance on Parents

Can I Buy Life Insurance for My Parents?

First and foremost, you must have their consent to purchase life insurance for your parents, even if you have power of attorney.

Once you obtain their permission, it is necessary to demonstrate to the insurance company that you have an insurable interest in your parent’s death.

For children, establishing insurable interest typically isn’t challenging since they might bear the burden of funeral expenses or other financial obligations after a parent’s demise.

The most straightforward approach is encouraging them to apply for the policy themselves. You can still assist with researching options and completing necessary paperwork.

This approach simplifies matters by removing the need to demonstrate insurable interest, as your mother or father will directly own and be insured under the policy.

Alternatively, you can take out a policy on your parent’s behalf if you handle all premium payments going forward.

This option requires that you get your parent’s consent upfront and prove that there is an insurable interest at stake.

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Beware of Goodman Triangle

A life insurance contract typically involves the insured person, the policy owner, and the beneficiary. Often, the insured also owns the policy.

But when someone buys life insurance for their parents, they might not be both. The Goodman Triangle will occur when the life insurance policy owner is not the insured or the only beneficiary.

Specifically, if the insured passes away, the death benefit is considered a taxable gift from the policy owner to the beneficiary.

Reasons for Parental Life Insurance

Securing life insurance for your parents ensures their final wishes are honored while providing financial stability to the family during tough times.

Understanding why mom and dad may need coverage is the key to choosing the ideal policy.

We have identified typical scenarios that necessitate life insurance to guide you in selecting the appropriate type and amount of coverage.

Mortgage Protection: Life insurance can safeguard the family home by settling any remaining mortgage dues upon a parent’s demise.
Debt Settlement: It provides a financial cushion to clear credit card debts, alleviating the burden on the family.
Spousal Income Replacement: Losing one parent’s income could severely affect the surviving spouse. Life insurance ensures they can maintain their standard of living.
Funeral Costs: With funerals being costly, life insurance relieves families from this financial stress by covering burial and funeral expenses.
Estate Tax Relief: For estates subject to taxes, life insurance proceeds help manage these costs, protecting the inheritance for beneficiaries.
Legacy Creation: Parents can use life insurance as a tool to leave behind a meaningful financial legacy for their children, supporting educational pursuits or future ambitions.
Philanthropic Gifts: Life insurance also enables parents to contribute to charitable causes posthumously.

How to Get Life Insurance on a Parent

The key to finding the right life insurance for your parents lies in understanding their medical history, as it affects eligibility and pricing with insurers.

To explore life insurance options for your parents effectively, it’s essential to gather some fundamental health information from them first.

A list of any medications currently being prescribed
Currently diagnosed conditions such as hypertension and diabetes
Prior major health events such as heart attacks, strokes, and cancer
An estimate of current height and weight
Current and past tobacco and alcohol usage

If you’re hesitant about asking your parents for this sensitive information directly, an independent agent can step in. They can obtain these details from your parents themselves, ensuring that the process is smooth and respectful.

This approach not only avoids any awkwardness but also enables the agent to pinpoint the most suitable policy based on your parent’s specific health circumstances and needs.

For those applying on behalf of a parent with existing medical issues, full disclosure of their condition(s) to the agent is essential.

This transparency allows the agent to focus on insurers known for more favorable underwriting practices for such cases.

Term Life Insurance for Parents

Life insurance is an essential component of financial planning at any stage of life, especially as people work longer and live well into their later years.

The ideal life insurance policy for someone over sixty may look quite different from the best option for those over seventy.

For those keeping an eye on expenses, term life insurance offers a budget-friendly solution with temporary coverage.

Term life insurance policies provide a solution by offering fixed premiums and guaranteed death benefits for periods ranging from 10 to 40 years.

Contrary to popular belief, term life insurance can be a viable option for seniors, offering affordability compared to permanent coverage options.

Life Insurance for Parents over 60

Despite being over 60, your parents can buy most term life plans specifically tailored to those in their golden years.

According to Mass Mutual, getting coverage while parents are in decent health and still have time to select the right product is essential.

Healthy seniors frequently choose term life insurance policies of 10, 15, or 20 years to meet diverse coverage needs.

However, it’s important to note that insurance providers set age restrictions on longer-duration policies.

For instance, individuals in their sixties cannot purchase a 30-year policy, and the cutoff age for acquiring a 25-year term policy is 65.

Life Insurance for Parents over 65

When one of your parents turns 65, it’s wise to reassess their life insurance requirements.

Opting for a modest policy, perhaps $50,000 or even a $100,000 term insurance policy, can provide coverage while settling any outstanding debts like personal loans or credit card balances.

Working parents in their mid-60s often purchase term life insurance to safeguard their mortgage or ensure financial support for the surviving spouse.

Retired parents often use term life insurance to protect their pension income for their spouses in case of premature death.

Life Insurance for Parents over 70

With many seniors working into their seventies due to financial needs, securing life insurance is vital.

For those seeking term life insurance over age 70, the choices are generally limited to 10 or 15-year terms.

A 10-year term policy is more affordable and covers short-term financial obligations effectively.

Conversely, a 15-year term offers more extended coverage at a higher yearly cost, ideal for parents needing extended protection but not indefinitely.

Comparing term life insurance rates by age is often beneficial to understand which plan best fits mom and dad’s budget.

Here’s an example of monthly premiums for non-smoking males aged over 70 considering both ten and 15-year term life policies.

10-Year Term Life Insurance

	$100,000	$250,000
Age 70	$80	$174
Age 71	$92	$204
Age 72	$109	$230
Age 73	$120	$262
Age 74	$135	$299
Age 75	$151	$325
Age 76	$157	$381
Age 77	$177	$398
Age 78	$200	$470
Age 79	$221	$544

15-Year Term Life Insurance

	$100,000	$250,000
Age 70	$120	$230
Age 71	$140	$313
Age 72	$165	$370
Age 73	$180	$429
Age 74	$210	$523
Age 75	$285	$609
Age 76	$331	$744
Age 77	$383	$852
Age 78	$446	$995
Age 79	N/A	N/A

Selecting the appropriate term insurance for elderly parents requires careful consideration between short and long-term policies.

For instance, a 10-year policy with $250,000 coverage costs $383 monthly for a 76-year-old, whereas a 15-year policy increases to $744 monthly.

The price hike for the more extended policy is due to its extension up to age 91, as opposed to age 86 with the shorter option.

If it fits your budget, opting for a longer-term life insurance policy or investing in permanent coverage is recommended to increase the probability of your beneficiaries receiving the death benefit.

For parents looking to leave a legacy for their children, permanent policies will provide a guaranteed inheritance.

Utilize our insurance calculator to quickly compare term and permanent plans from various trusted insurers and find the best option for you.

Life Insurance Quotes for Parents

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Burial Insurance for Parents

It is no secret that final expenses can be costly, but with proper planning and the right coverage, you can ensure that mom and dad are covered without stress.

One effective strategy is to invest in whole life or universal life insurance policies specifically designed for this purpose.

Acquiring a modest final expense policy could be wise for those whose parents haven’t saved for their end-of-life expenses.

Whole Life for Final Expenses

Depending on your needs and budget, various life insurance options exist when deciding how to pay for final expenses.

We’ll look at three of the most popular types of whole-life policies and help you decide which one is right for you.

Simple Issue: These policies offer immediate coverage and accommodate various medical conditions. With minimal health inquiries and no need for a medical exam, qualifying is straightforward.
Graded Premium: These policies have less underwriting than simple issue coverage and have a 2-year waiting period before paying a death benefit.
Guaranteed Issue: This expensive coverage is automatically approved because there are no health questions, and it has the same tiered payout structure as a graded death benefit.

Which type of life insurance is best for my elderly parents?

If elderly parents have maintained good health without significant medical issues, a simplified issue policy is the most affordable whole-life insurance option.

For those with chronic illnesses struggling to get coverage, graded premium and guaranteed issue life insurance provide viable solutions.

As you might have guessed, both graded and guaranteed whole life are not the cheapest burial insurance plans for parents in their 70s and 80s.

Even with premium refunds with interest if you die within the first two years, graded and guaranteed coverage is best for parents with severe medical conditions.

So, having mom and dad buy burial life insurance should be weighed against putting money into a savings account for final expenses.

Universal Life for Final Expenses

For parents with decent health, universal life insurance offers the cheapest option for covering final expenses.

These policies often necessitate medical exams to gauge risk properly. However, not being in peak physical condition isn’t a deal-breaker!

Healthy seniors can secure affordable fixed premiums and lifetime coverage with guaranteed universal life insurance.

Universal life insurance policies typically start at a $25,000 death benefit and are often significantly cheaper than whole-life policies, which do not require a quick exam.

Forbes Advisor suggests looking into companies that offer smaller death benefits, including Pacific Life and Protective Life.

The minimum death benefit with Pacific Life is $25,000, and $50,000 with Protective Life.

We have provided examples of the best life insurance rates for parents over 70 for both a $25,000 and a $50,000 policy.

Universal Life Insurance for Parents

	$25,000	$50,000
Age 70	$84	$164
Age 71	$90	$174
Age 72	$94	$183
Age 73	$101	$195
Age 74	$106	$207
Age 75	$112	$220
Age 76	$119	$233
Age 77	$128	$251
Age 78	$137	$270
Age 79	$147	$290
Age 80	$160	$316

Universal life insurance extends beyond mere funeral cost coverage, serving as a mechanism to pass on a tax-free legacy to your heirs.

Paying higher premiums now might seem like a financial strain, but the long-term benefits can be significant.

Contemporary universal life policies offer flexibility, including options combining death benefits with long-term care advantages.

These hybrid life insurance policies enable you to utilize part of your death benefit during your lifetime for nursing care expenses.

This approach safeguards your estate from being depleted by such costs, ensuring that your beneficiaries receive an inheritance after you’ve passed away.

To get personalized universal life insurance quotes for your parents, utilize our calculator and choose lifetime for the coverage duration.

Buy Life Insurance for Parents

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FAQ: Getting Life Insurance on Parents

What is evidence of an insurable interest? Insurable interest refers to whether or not the policy’s beneficiary would experience a financial loss if the insured died. For instance, kids have an insurable interest in their parents because if they died, they would have the burden of paying for their final expenses.

Can I make the payments on my mom and dad’s policy? Indeed, you can cover the premium costs for your parent’s life insurance policy without being the owner. While they maintain ownership and control over their policy, you can financially support it by paying the premiums on time.

Is burial insurance the same as final expense insurance? Yes, burial insurance and final expense insurance cater to those on limited budgets with health issues and are designed to cover costs associated with funeral expenses. These policies offer a modest death benefit, usually between $5,000 and $25,000.