Can You Buy Life Insurance for Your Elderly Parents?
People usually purchase life insurance to help support their spouses and children if they die. However, adult children can also buy life insurance for their elderly parents if they meet certain conditions. Here’s how you can purchase life insurance on behalf of your mom or dad.
Benefits Of Buying Life Insurance for Your Parents
There are various reasons why adult children buy life insurance policies for their aging parents. One is that your parents may not be able to afford to buy life insurance on their own. Another is that they may not see a need to purchase a policy. You may also want to buy life insurance for your parents if you have a family business.
There are benefits to buying life insurance for your parents. If your parents have a small estate, life insurance can cover some of the funeral costs and outstanding debts. A life insurance policy can help pay taxes and other expenses if your parents have a large estate.
Get Your Parents’ Permission
You can’t buy life insurance for your parents without their consent. Your parents will need to undergo a health assessment and possible medical exam, so talk to your parents first.
Establishing Insurable Interest
Insurance law dictates that you must demonstrate insurable interest, proving you’ll suffer a financial loss if your parents die. To determine insurable interest before you buy life insurance for your parents, the insurance company may talk to you and your parents to determine if your situation qualifies.
Designating A Beneficiary
Talking to your parents about designating a beneficiary for their life insurance policy is best. If you have brothers and sisters, your parents may want to distribute the death benefit evenly.
Speak To an Insurance Broker
An insurance broker will assess your situation and help you find an insurance policy to best suit your needs. A term life policy or a permanent life insurance policy may be best. A broker may recommend a guaranteed life insurance policy, a small policy with no health qualifications, for older parents. Remember, because your parents are older, their premiums will be higher than a life insurance policy you purchase for yourself.
Life Insurance in Halifax And All Of Nova Scotia
At Eisenhauer Insurance Inc., our brokers can help you buy the best life insurance policy for you or your parents. We can also set you up with a living benefits insurance policy. Contact us today to schedule a free, no-pressure consultation with one of our brokers in Halifax and Dartmouth, Nova Scotia.