Can You Take Out Life Insurance on Your Parents? Discover the Why & How.

09 04, 2023
Jake Smith

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If you're worried about the financial impact of your parents passing, you may be considering ensuring they have adequate life insurance. The question is, can you take out life insurance for your parents?

In this article, we dive deep into the possibilities and considerations of purchasing life insurance for your parents. We will cover benefits, possible challenges, as well as cost considerations.

Life Insurance for Parents: An Overview

When we talk about life insurance for parents, it essentially means taking out a policy as an adult child with your aging mother and father as the insured. In the insurance world, such policies are often known as "third-party policies".

Like with any coverage, it provides a death benefit if the insured person (in this case, your parent) passes away during the policy term. However, when purchasing life insurance on your parents, you need to consider some unique aspects:

  • Will your parents consent?
  • Do you have an insurable interest?
  • Can you afford the premiums?

 

Daughter discussing life insurance possibilities with elderly mother at home.

 

Parental Consent & Proving Insurable Interest

Yes, parental consent is a must when buying life insurance for your parents. They need to sign the application and participate in any necessary health checks or exams.

Besides, the insurance provider must be assured that you have a legitimate interest in your parents' life, known as "insurable interest". If you depend on your parents financially or you are responsible for their debts, you likely have an insurable interest.

 

Son and father enjoying a peaceful time in the park, knowing they have financial security through life insurance.

 

The Benefits of Life Insurance Coverage for Parents

Purchasing protection for your parents can offer several benefits:

  • Provides monetary aid to cover any debts your parents may leave behind, such as a mortgage or medical bills.
  • Can be used to cover your parents’ end-of-life expenses, lessening your family’s monetary burden during a hard time.
  • If you rely on your parents for financial support, the death benefit could replace this loss of income.

 

A relieved daughter finding affordable life insurance for her parents with Specialty Life.

 

Choosing Between a Term Life Plan & a Excelsior Plan for your Parents

Making a decision between a Term Life Plan or a Excelsior Plan depends on specific needs and financial situations. Both plans offer advantages, and the deciding factors often boil down to budget, age, and coverage needs of your parents. Let's take a closer look.

Term Life Plan

  • A Term Life Plan is beneficial if your parents are in relatively good health and maintain some level of income, or when the potential financial loss upon their demise is substantial.
  • This plan is excellent if you need a larger coverage amount, from $1,000 to $1,000,000, to ensure ample financial protection for paying off debts or replacing lost income.
  • However, remember that premiums might be higher for older adults.

Excelsior Plan

  • A Excelsior Plan, on the other hand, is a good choice if you're aiming to cover only specific end-of-life expenses such as funeral costs or small debts left behind.
  • This plan is particularly reasonable if your parents are older or have health conditions that may make other life insurance types more expensive or even ineligible.
  • Lastly, the Excelsior Plan offers guaranteed acceptance, which ensures our aging parents won’t be denied due to health issues.

 

Daughter comparing a Term Life Plan and a Excelsior Plan for her elderly parents on a laptop.

 

A Quick Wrap-Up

Yes, insurance for your mom and dad is a possibility. But the best advice is to assess your parents' health status, consider the financial impact of their passing, and decide on a plan that offers the most peace of mind. Specialty Life advisors can provide valuable advice and help you choose the best option based on your unique situation.

Also remember, while securing a policy for your parents is beneficial, premiums for older individuals can be more than for younger ones. If this worries you, try considering Specialty Life's Excelsior Plans. This plan is specially created to cover funeral expenses and other end-of-life costs.

At Specialty Life, we help your parents get suitable coverage no matter their age or health condition. We aim to prevent your parents' loved ones from experiencing financial distress after their passing.

 


 

Ready to Protect Your Parents with Life Insurance?

Securing life insurance for your parents can provide monetary stability for your family after their passing. Don't leave this to chance! Explore our diverse and budget-friendly life insurance plans for your parents today!

GET STARTED NOW!

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