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Yes, You Can Buy Life Insurance On Your Parents
You may be dependent on your parents' income and finances. Taking out a life insurance policy on your parents can provide a cash payout in the event of your death that can help you maintain your standard of living.
Why Consider Purchasing Life Insurance for Your Parents?
The average cost of a funeral is around $10,000, an expense that may be left to you if your parents do not have a life insurance policy or other final expense arrangements. You also may depend on your parents for income, and a life insurance death benefit can help replace it.
What Kind of Life Insurance Should You Choose?
Although there are two main types of life insurance (term and permanent), you may find it difficult to take out a traditional, fully underwritten term or permanent policy on your parents due to their age or health.
Guaranteed issue life insurance policies* offer smaller payouts (usually less than $20,000) that can help you pay for your parents' final expenses, including their funeral and burial costs. These policies are usually age restricted.
Even better, your parents don't have to pass a medical exam or answer any questions regarding their past or present health.
How Much Coverage Will you Need?
This question depends on what you hope to cover with the policy. A policy with a payout of $10,000-$15,000 may be enough if you are just looking to cover funeral and burial costs. However, you may want to purchase a larger policy if possible if you have other needs.
Make sure you discuss all of these matters with your parents before buying a policy.
A licensed agent can help you better understand your options and match you with a policy that works for you. Speak with a licensed agent at 800-966-7169 or read through our guide, Determining Your Life Insurance Needs to learn more.