Parents are total rock stars. They spend what seems like thousands of years wiping tushes and helping with pre-calc homework, yet they still claim to like you. What would you do without them? Unfortunately, barring some space-time continuum freakiness, they’re also older. And, most often, older = closer to “the end.” A huge bummer, but it’s a reality. And we’re here to help you get real.
Our independent agents are always ready to shed some light on your options in dealing with their loss. One option worth considering is to take out life insurance for your parents. Let’s talk about it.
Life insurance is designed to cover costs after someone’s passing (like the funeral, medical bills and library fines) AND to help support their dependents with all the leftovers. But if your parents don’t have life insurance, or enough of it, and you’re worried about what kind of mess they might leave behind, you can take out a policy for them.
BUT, there are a few teeny-tiny caveats:
Glad you asked. There’ are a couple of good and smart reasons to buy life insurance for your parents The first is to cover their estate taxes. The second is to support their dependents. Here, the benefits totally outweigh the not-benefits and you can go full steam ahead. Let’s break these scenarios down:
First, if you buy insurance for your parents when they are older, the insurance companies will have less time to collect premiums before “time’s up” and they have to pay out. This drives premiums up and benefits down, and that’s what they call a good old-fashioned lose-lose situation.
Second, because death is unpredictable. Heck, your parents could live way longer than you think they will, which is great and all, but you could get stuck paying those high premiums. Bummer.
Thirdsies, because you can’t just say, “I want money when my parents pass” and get it. You have to prove there’s an “insurable need”: a real reason you need the life insurance. No good reason means no insurance.
And the fourth reason is that there are other options out there. Like these:
Deciding whether or not life insurance is right for you and your parents is the hard part, but getting it is pretty easy.
First, you’ll need to talk with your parents and get the okay to take out life insurance for them. This kind of convo is never easy, but imagine how they felt when they talked about “the birds and the bees” with you.
Next, you’ll contact an insurance agent. They’ll dig up a bunch of options and help you pick a policy. They’ll also help submit your parents’ medical documents and any other information you’ll need for approval.
After a few signatures *DING* you’re all set.
It depends on the policy you choose and why you need the insurance. Here’s a smattering of things your policy can be designed to cover:
Any policy can be a good fit depending on your needs, but there are a few standouts (i.e. second-to-die insurance is particularly good for covering estate taxes). Here’s a quick what’s what of life insurance types:
FUN FACT: Any life insurance policy can be annuitized.
Costs vary wildly, especially if one or both of your parents is in poor health. Expect to pay a lot. You could even pay more in premiums than the death benefit is worth, which is why taking out life insurance for your parents is sometimes the wrong option.
In any case, talk to your agent about your options and they can help paint a nice, clear picture of your options to mull over. They’re artists like that.
Independent agents work for you, not a big insurance company. They're not bound by exclusive contracts and can search high and low for what you need. That means you can trust that you’re really getting the right option for you. How sweet is that?
Our agents will review your needs and help you evaluate which type of life insurance makes the most sense for your needs. They'll also compare policies and quotes from multiple insurance carriers to make sure you have the right protection in place. For you AND your parents.