You probably wonder whether it’s feasible or even worthwhile to do so.
Buying life insurance for your mother is not only possible it might also be a worthwhile investment not only for her but for you as well. I will explain what you need to know and how to make an informed decision on what type of insurance you can consider that would suit your mother’s needs.
Why Should I Buy Life Insurance for my Mother?
It can be a very good idea to buy life insurance for your mother if the beneficiaries have to take care of debts in the event of your mother’s death. In addition to potential debts, you may have to consider the funeral and other expenses that could be incurred when she passes away. There may also be estate and trust issues involved as well.
Is There an Age Limit?
In most instances you can buy life insurance for your mother up until the age of 85. After age 85 the premiums can be very costly.
Ownership of your Mother’s Life Insurance Policy
The person who owns the own will be dependent on who buys the policy. If you are simply making inquiries on her behalf and your mother will be paying for the policy, then she will be owner of the life insurance policy.
On the other hand if you wish to purchase the policy so that your mother is the named insured, then you will be the owner of the policy since you are the one paying the premium.
You should also consult with a tax advisor if you are paying for the policy and are the beneficiary as there may be tax considerations that can impact you when the policy is paid out.
Do I have to Tell My Mother?
The answer is yes. In most states you legally obligated to do so. In any event, your mother will also have to sign the policy since she will be the named insured and will obviously become aware of that you have purchased a policy.
Can I be Restricted from How Much Insurance I Want on My Mother?
The amount of insurance you can buy will vary from company to company. Up to certain levels of insurance you can buy the policy without restriction. For higher policy amounts you will have to prove that you have what is called an ‘insurable interest’.
An insurable interest simply means that you must show the insurance company that you have a financial stake in the amount that will be paid to you if you or some other person as the named beneficiary. The financial stake is the financial burden that you might have to incur when your mother passes away such as debts like credit cards, mortgage and car payments, death benefits and similar expenses.
In most cases you can apply up to around $100,000 for a policy before you have to prove an insurable interest. So don’t expect to buy a million dollar policy without showing justification that you need this amount.
Will my Mother Have to Take a Medical Exam?
It depends on the type of policy and the amount of insurance you are buying, her age, habits, her current health and family history. In most instances and for lower amounts such as $10,000 or $25,000 you may only have to fill out a questionnaire. The older a person gets, the insurance company may have more restrictions. These medical exam requirements also vary from company to company.
Policies which are for higher amounts will very likely require a medical exam. These exams are fairly straightforward, performed quickly and are non intrusive.
Types of Life Insurance Available for Your Mother
There are several choices you can make when considering what type of policy to buy for your mother.
The cheapest and easiest to purchase life insurance available is called ‘Term Insurance’. This type of life insurance pays death benefits only. It is called term insurance because you purchase it for a specific number of years. So, you can buy term insurance for say 5 years or 20 years. The premiums are fixed for the period of the term.
You decide on what length of term by considering your needs and reasons for buying the life insurance. It may also depend on the life expectancy of the person.
A more expensive form of insurance is also available and is known as ‘Permanent Insurance’. There are 3 varieties available, but for most people who are purchasing life insurance for their mother, the best options are called ‘Whole Life’ and ‘Universal Life’.
The main difference between term life and permanent insurance is that a whole life or universal life insurance policy not only pays death benefits but also has a cash value accumulation feature which grows over time. Universal is considered the cheaper of the two and might be the best approach in many instances where an estate or trust is involved.
Second to Die Policy
This type policy can only be purchased if both parents are still living. It is a policy that is also often used in estate and trust planning. The key feature of this type of life insurance policy is that it is only payable when the second person passes away.
Impaired Risk Insurance
If your mother currently suffers from a relatively serious health condition, you can still possibly buy life insurance. I suggest you call us for more information as this form of life insurance is something we specialize in providing.
You can use our quote form on the right site of this page to get a quote to see how much a policy might cost.
If you would like to learn more buying life insurance for your mother than you may also want to read Can I Purchase Life Insurance on My Parents.
For the best term life insurance prices on your mother, or any other type of life insurance, it’s best to speak with a knowledgeable professional, who can discuss your options and pricing with you. You may get a quote using our form on the right or by calling us at 877-996-9383.