3 Essential Tips for Buying Life Insurance on Your Parents

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2.  How Much Life Insurance Can I Purchase on My Parents?

The trick is to apply for a reasonable amount of coverage to protect you from financial hardship.  The idea is to be indemnified, or made whole… not to get rich off your parents’ death.  So if your 81 year old mother is living with you, and lives off social security, and provides no financial benefit to your family, and has no debt, you would not, for example, be approved for a 1 million dollar life insurance policy.

In most cases, a $100,000 life insurance policy for parents is approved without hitting any barriers.  Beyond this, financial justification will be required.

Requirements to Purchase Life Insurance on Your Parents

Your parents will first, need to be aware that the policy is being taken out on them.  It’s impossible for them not to know, since they will need to sign the application as the “primary insured” or “primary applicant”.  Most policies will also require a medical exam.  It’s really not too complicated.  You just complete an application, (sometimes the medical exam), and then wait for approval.

3.  Which Types of Life Insurance is Most Appropriate for my Parents:

Term is the most common type of insurance sold today, because it offers the lowest cost for level premiums during the duration of the term.  You must consider your parents’ life expectancy, however, if you’re considering term.  You don’t want to get a 10 year term if you actually need the coverage for as long as they live.

In the latter case, whole life insurance, or its little sister, universal life insurance (a lower cost policy offering coverage for life), may be more suitable for you.  You can get quotes in our quote form on the right to age 100 or 121, which are guaranteed universal life insurance policies.

Another popular choice for parents is a second-to-die policy.  As the name indicates, this policy only pays out one death benefit, upon death of the second parent.  This type of insurance is popular in combination with estate planning and life insurance trusts, but not necessarily.

Please note if your mother or father have health issues, please see our post on impaired risk life insurance, for details on how we are able to provide affordable life insurance to our clients with history of stroke, heart disease, cancer, diabetes, etc.

For the best term life insurance prices on your parents, 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.