Tag Archives: Life Insurance Policy

Life Insurance for My Mother

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Life Insurance for My MotherPerhaps you’ve been thinking about buying life insurance for your mother who might be getting on in years.

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.

Term Insurance

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.

Permanent Insurance

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.

Life Insurance for My Father

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Life Insurance for My FatherIf you’re interested in whether and how you can buy life insurance for your father, then this will tell you how you the steps you need to take.

There are some crucial things you need to know before you buy life insurance for your father, but this article will help you prepare so you can make an informed decision.

 

Is Life Insurance a Worthwhile Investment for my Father?

In most instances, the answer would be yes. Life insurance could be considered a very good investment especially if your father is under the under the age of 85.  After age 85, the premiums become very expensive, and the amount of available coverage can be very limited with many life insurance companies.

Who Will Own the Life Insurance Policy?

This depends on who is paying for the policy.  If your father is paying for the policy then they will own the policy. If you are paying for the premiums then you will be the owner of the policy.

The other thing to know is that if you are paying for the policy, you will not only be the owner of the policy, but will also likely be listed as the beneficiary.

However, there is one small catch if you are the owner, paying for the policy, and are the beneficiary.  In order to be approved by the insurance company you may have to prove that you have an insurance interest in order to qualify.

An insurable interest simply means that if your father were to suddenly die, then you would end up financially burdened. This could mean anything such as outstanding debts which will need to be cleared up, such as an outstanding mortgage or the funeral and death expenses for example.

How Much Life Insurance Can I Buy for My Father?

The general rule of thumb which I suggest is that you buy only what you think your father needs. The idea is remove any financial burden rather than thinking as the insurance policy as something to make a profit.

In most instances, the majority of life insurance companies will allow you to purchase up to a $100,000 policy without receiving any obstruction from the company that is reviewing your application.

If you are looking to buy more than this amount, the insurance company will most likely you to justify the reasons why you want to purchase more.

If your father doesn’t owe any money and is living off a small pension combined with social security, then you will not likely be approved for a $500,000 policy for example, unless you can prove the need for such an amount.

Does your Father Need to Know if you Buy an Insurance Policy?

The answer to this is yes. Since the policy is for him, then your father will have to be the signatory on the policy because they are designated as the ‘primary insured’. They will obviously know you are buying a policy for them.

Are there Any Restrictions on Buying Insurance for my Father?

The only restriction that you will likely encounter is that your father will have to take a medical exam. The requirements for medical exams vary from company to company. The medical examination will not be overly intrusive and usually requires only a few simple tests and can be done fairly quickly.

What Kinds of Life Insurance can I Buy for My Father?

You have four choices to consider when deciding on what type of life insurance policy to buy for your father.

The first is called ‘Term Insurance’, and is the most affordable form of life insurance.  It is called term because you buy the insurance for a period of years such as 10 or 20 years for example. The basic approach is to buy a policy that might best match your father’s life expectancy.  This policy pays death benefits only.

Your second life insurance option is called ‘Permanent Insurance’.  Your two main choices for permanent insurance are ‘Whole Life’ and ‘Universal Life’.  Although both policies cover your father for life, universal is a cheaper product to buy.  These policies not only pay death benefits but also have a cash value accumulation. Either of these policies is ideal if you need to provide a policy for your father for their entire life.

The third life insurance option is called a ‘Second to Die’ policy.  If your mother is still alive then this might be the route to take because the policy is only paid out when the second parent has passed away.  Also, this policy is often used if you’re planning for an estate or a life insurance trust.

The final option is very ideal if your father has a serious health ailment such as cancer, or heart disease.  This policy is known as ‘Impaired Risk Insurance’, and is an area we specialize.

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 father than you may also want to read Can I Purchase Life Insurance on My Parents.

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.