Buying life insurance is never a fun experience, it can be a long and frustrating process, but buying life insurance for your parents can be much worse. While it can be uncomfortable and exhausting, purchasing life insurance coverage for your parents could be one of the most important things that you do for them and your loved ones.
One of the most commons questions about life insurance regarding parents is, “can I buy life insurance on my parents? And how much coverage can I get on them?” both of these are valid questions that need to be answered before you buy a policy.
First things first, YES you can purchase a life insurance policy on your parents. It’s common that grown children will purchase a plan to cover their parents as they get older.
The only thing that you’ll need to prove is that you have insurance interest for wanting to take out coverage on your parents and because their debts will be left to you or your sibling, proving that interest is simple.
All you have to do is prove you’re the child of the person you’re trying to insure. In most cases, this could be as simple as providing identification.
The next questions that most children have, “how much life insurance should I buy on my parents?” and the answer is going to vary on several different factors.
Calculating Your Parents’ Life Insurance Needs
Aside from having a plan, the next factor you need to decide is how much coverage you’re going to purchase. There are several financial factors that you need to account for when calculating life insurance needs.
The first is any debts that you or your loved ones would be left with. If your parents still have a mortgage payment, business loans, or any other outstanding debts, you’ll want to ensure that the life insurance plan will cover those expenses if anything tragic were to happen.
If this seems overwhelming to add up all of the debts, start with the biggest one and work your way down to the smallest. Whatever the sum of these numbers is, this is where you should start.
Additionally, you’ll need to look at any possible future expenses that could put a strain on your budget. Costs of a funeral or hospital bills that could arise and be left to you and your siblings or loved ones. You can’t always predict any unexpected costs that you’re going to have, but it’s better to have the protection there.
In most cases, having a million dollars of insurance coverage on your parents is going to be excessive. The vast majority of applicants do the calculations and realize that they can take advantage of a smaller policy that will have lower insurance premiums.
Very few households at that age hold that much debt and have nobody that relies on their income, which is two of the main purposes of life insurance. But, that doesn’t mean you should automatically discount purchasing a million dollars of life insurance if your family needs it.
If you would like assistance adding up how much life insurance to buy, our agents can help you do this.
How Much is the Policy Going to Cost?
One of the most important factors when looking for a life insurance policy is what it’s going to cost to keep the coverage. Age is going to play a significant role in determining the costs of the policy. The older that your parents are, the more expensive the plan is going to be, which means you should shop as soon as possible.
Because there are variables that are used to calculate the costs of the coverage, it’s difficult to say what you’ll pay for coverage, but we can give you a rough idea of what the policy will costs. For example, for a ten-year plan for a non-smoking male at the age of 70 will pay around $250 for $500,000 of coverage for a 10-year term.
On the other hand, if that same applicant were to purchase a one-million-dollar plan, they would pay $1,600 every month for a 20-year term. As you can see, the amount of insurance that you purchase is vital to prevent you from paying for coverage that you don’t need.
Age isn’t the only factor they will use to calculate insurance premiums. They are also going to look at your parent’s health, any pre-existing conditions, and tobacco usage. All of them can play a role in how much you pay for the plan. One of the easiest ways to save money on the insurance policy is to have your parents cut out any smoking or tobacco in their life. Smokers pay twice as much for coverage versus what a non-smoker will pay, not to mention all of the added health benefits to quitting smoking.
Getting a Life Insurance Policy on Your Parents
Purchasing life insurance for your parents is just like buying a plan for yourself. They will have to undergo the health exam and complete the paperwork, the only difference is they will name you the beneficiary of the policy. It’s as easy as that.
If you’re looking to get the best rates on insurance for your parents, the best way to do that is by comparing the rates of dozens of companies before you choose the best one. Every insurance company is going to view the application differently, some companies have much better rates for elderly applicants than other companies.
You could receive drastically different quotes on life insurance policies for your parents from two separate companies for the same coverage. Because there are hundreds of companies, you could spend weeks looking for the lowest rates, or you can make one call to us, and we will handle the rest.
If you decide you want to buy life insurance, but you don’t need a million in coverage, you should get a much smaller plan. With a smaller policy, you can get a guaranteed issue policy.
They are smaller and easier to apply for. You will just have to offer some basic info.
In most cases, your parents won’t need a million dollars of life insurance coverage, but you should still purchase a policy that covers all of the needs that your family will face.
If you have any questions about getting life insurance coverage for your parents, contact us today toll-free at 800-866-8780, and we can help connect you with the perfect policy.
Life insurance is the best way to protect yourself and your loved ones from being left with debts or expenses that can make a difficult time even worse. Don’t wait any longer to get an insurance policy that you and your family deserve.
Buying life insurance on a parent can be a difficult and sticky decision. You want to make the whole process as quick and easy as you can, and we are here to do just that.