Affordable Funeral Insurance for Parents
Affordable Funeral Insurance for Parents
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Buying life insurance for parents can be a great way to help protect yourself financially. Many adults find themselves caring for an aging loved one at some point in their lives, but the associated costs of long-term elderly care can be daunting, potentially throwing your own retirement and savings goals off track.
Here’s everything you need to know about buying life insurance for parents, so your own finances don’t suffer.
Can I Buy Affordable Funeral Insurance for Parents?
Before you can decide which type of insurance to buy for your parents (or if you even need insurance for them), you need to know if you’re eligible to purchase a policy for your parents. Here are the 2 required criteria:
You have to be able to prove your finances will be negatively impacted by a parent’s death.
You must have the written consent of the parent you’re trying to insure.
In most cases, it isn’t difficult to prove your finances will be negatively impacted by the death of a parent.
Unless your parents have a substantial amount of wealth saved up for retirement, medical bills, end-of-life expenses, and funeral costs, odds are those expenses and associated debts will be passed on to you. Plus, any outstanding debt your parents might have, like a mortgage or business debt, could also become your responsibility.
You can’t take out an insurance policy on someone without them knowing (the exception being children under the age of 18), so you have to have a parent’s consent to insure them.
Discuss how your finances will be impacted by caring for them in retirement and after they pass away:
How much debt will you be taking on?
How will this affect your own retirement?
What kind of healthcare coverage do your parents have?
What are their funeral wishes and associated costs?
Defining a clear financial picture will help you decide the next steps and make your case for their approval and consent.
Why Should I buy Affordable Funeral Insurance for Parents?
The main purpose of ensuring a parent is to help replace your own lost income and savings, protecting yourself from future debt.
The expenses associated with caring for a loved one can wipe out the caregiver financially and be detrimental to the caregiver’s children, who might be relying on them to fund college or other future costs.
Buying a life insurance policy on a parent can help you recoup lost income and savings by paying out a death benefit, provided you are named as the beneficiary.
Both term life insurance and whole life insurance will pay out a death benefit; the difference is that term insurance will only pay out if the insured dies within a specified term, and whole life insurance guarantees a payout for life.
Whole life insurance also comes with additional benefits not found in a term policy. A whole life policy earns guaranteed interest and non-guaranteed dividends. It has a cash value component, which functions like a high-interest savings account and can be used to fund expenses. It receives favorable tax advantages from the IRS and asset protection.
How To Get the Best Rates on Parent’s Life Insurance?
Comparing rates from many different companies is the only way to make sure you are getting the most affordable and best life insurance rates.
Sometimes quotes will vary by hundreds of dollars per year from company to company, so by comparing many quotes, you’ll find the cheapest rates possible for your mom and/or dad.
Affordable Funeral Insurance for Parents
Facing and planning for the final seasons of life is never easy and it is often an uncomfortable topic to think about or discuss. However, for the sake of your loved ones, it is important to begin planning for this stage earlier rather than later.
This is because declining health is often associated with the later years of life, and as such, it may be difficult or cost- prohibitive to get the life insurance coverage you need.
Certain whole life plans can be made to perfectly address these issues and provide coverage for end-of-life expenses, such as funerals. Funeral costs can be expensive; the average cost of a funeral is between $7,000 and $12,000, not including medical expenses. Some whole life plans are available for individuals between the ages of 49 to 89 who may have health concerns that limit their ability to purchase other types of coverage.
These policies have smaller guaranteed death benefits but have a simplified underwriting process that doesn’t typically require a medical exam.
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