Buying Life insurance for Parents
Life insurance shopping can be hard when you’re buying it for yourself - so imagine how difficult it would be to buy it for someone else.
But luckily for you, the underlying criteria for buying life insurance remain the same for everybody. If you are buying life insurance for your parents, the best life insurance plan would depend on factors like age, health history and how much coverage you need, which are the same factors regardless of who the insurance is for.
When buying life insurance for your parents, you will first need their consent. This would usually be in the form of their signatures on the application and proof of insurable interest (which states that their death would have a financial impact on you). These proofs are necessary as you will be the owner of the policy and responsible for the payments.
Now that we have all that paperwork out of the way, here are a few life insurance policies best suited for your parents:
1) No Medical Exam Term Life Insurance.
With this type of policy, the insured do not need to have a medical exam and it is very affordable. The coverage amount ranges from $10,000- $1,000,000. This type of policy is best for people younger than the age of 65 in average or better health. It offers the highest coverage amounts.
2) Final Expense Life Insurance.
This again does not require a medical exam and is affordable. The coverage amounts range from $2,500-$40,000. However, if they have serious health conditions, a guaranteed issue life insurance policy (https://www.truebluelifeinsurance.com/guaranteed-issue-life-insurance/) may be your only option. It provides enough coverage for funeral expenses and a bit extra but it is more expensive than any other life insurance type.
3) Accidental Death Insurance.
You cannot be denied accidental death insurance - and it is the most affordable. The coverage amount ranges from $50,000-$500,000. This is the best plan if you're looking for coverage but your budget doesn't allow a traditional policy. Anyone can qualify for an accidental death life insurance policy (https://www.truebluelifeinsurance.com/accidental-death/) regardless of their health history. It is almost more affordable than any kind of traditional life insurance. But this type of insurance only pays if the cause of death is because of an accident.
If your goal is to have the policy pay for final expenses, a policy with a death benefit between $10,000 and $50,000 may meet your needs. It’s wise to plan for at least some leftover bills when setting goals for a life insurance policy for your parents. If your goal with the life insurance policy goes beyond final expenses, another type of life insurance policy may better meet your needs. For instance, if your parents own a house which they intend to leave to you but the home still has a sizable mortgage, a life insurance policy with a higher death benefit may help to pay for final expenses as well as paying some or all of the remaining mortgage balance on your parent’s home. Without a life insurance policy or a mortgage life insurance policy for your parents, there is a risk that the home they leave to you as an inheritance can be lost or forced into a sale during an already difficult time.
Before buying a plan for your parents:
Think carefully about the goals of the insurance policy you're considering. Your objectives with the policy can help determine appropriate coverage amounts and help you to choose a policy type that best meets your objectives.
After you've established the goals, estimate how much you will need the policy to provide as a death benefit.
It is best to have a thorough conversation with your parents regarding their long term care, overall finances, outstanding debt and other considerations. Life insurance is part of an overall life plan. iLifeInsurance can help narrow down your options and also let you talk to an insurance expert who can guide you through the process.