You can purchase life insurance for your parents. But for you to be able to buy a life policy on them, they’ll need to be on board with the decision and agree to participate in the application process.
The type of life insurance that’s best for your parents will depend on their personal situation and financial needs. No matter the type of policy you purchase, you’ll need to demonstrate to the insurance company that you’ll be financially impacted by your parent’s death if you’d like to pay for the policy for them.
What do you need to buy life insurance for your parents?
In order to buy life insurance for your parents you’ll need to provide the insurance company some personal and financial information about both you and your parents. You’ll also need your parents to consent and demonstrate legal competence when buying the policy.
You’ll still have the option to pay for the policy if you list your parent as the owner of their life insurance policy — called the policyholder They can list you as the payor, which means you’ll be responsible for covering the policy’s premiums.
Only the policyholder is able to cancel the policy and change the beneficiaries, not the payor. When working as a life insurance agent, I’d usually recommend that the insured person own their own policy so they’re able to make changes if necessary, but you can technically own your parent’s policy, too. You’d just need to fill out additional paperwork.
What type of life insurance should your parents have?
The most affordable type of coverage is a term life insurance policy, but if your parent has serious health conditions, a final expense policy that can help cover end-of-life expenses and is easier to get approved for may be a better fit.
The right life insurance policy for your parents will depend on your family’s needs and what type of insurance your parents will be eligible for. Consider how your family would be financially impacted if your parents died. You’ll want to make sure you have resources to cover any costs that come up — a life insurance death benefit can help.
Term life insurance is the best choice if your parent’s death would lead to a substantial financial loss, loss of household support (like childcare), or if you would have to take on their debts. The policy lasts for a set number of years, called a term. At the end of the term, your parent will have the option to convert the policy to a whole life policy if they still need coverage.
Final expense insurance is a type of whole life insurance designed to cover end-of-life expenses, like funeral costs. It can be a good fit if your parents have medical conditions that might disqualify them from getting approved for a standard life insurance policy, like term life. Coverage amounts are low and premiums are high compared to term life policies, but the policies last for the rest of your parent’s life, and they don’t have medical requirements for approval.
How much does life insurance for your parents cost?
If your father is 50 years old, doesn’t smoke, and only has one or two mild health conditions, you could get him a 20-year term life insurance policy with a $500,000 payout for about $102 per month. If your mother is the same age, also doesn’t smoke, and is in similar health, you could find her a policy for the same duration and with the same payout for less than $80 per month.
Buying life insurance for your parents will depend on a variety of factors, including their age and health status. If your parents are relatively healthy with only a few minor health conditions, they should be eligible for a term life insurance policy at an affordable rate. Term life policies typically offer coverage up to age 75 or 80, depending on the insurer.
Average term life insurance rates for parents
Average final expense insurance rates for parents
If your parents have serious health conditions, they may not be able to qualify for term life insurance. In that case, a final expense whole life policy may be a good fit for them. Final expense policies offer a simplified — and sometimes guaranteed — application process and last for life as long as premiums are paid, regardless of health status.
If your mother is 60 years old, she could get a $25,000 final expense policy for about $77 per month. If your father is the same age, he could get a similar policy for about $105 per month.
$5,000 coverage amount
$15,000 coverage amount
$25,000 coverage amount
What are the best life insurance companies for your parents?
The best life insurance for your parents will come down to a variety of factors, mostly based on their age and health profile. When you and your parent meet with a licensed sales agent, try to be as forthcoming as possible with them about your financial needs and your parent’s health. This way, they can help make sure you get the best possible coverage to meet your family’s needs.
Best term life insurance for younger parents: Foresters Financial
Foresters Financial can offer affordable rates and a convenient application process for people under age 55. It doesn’t require a medical exam to apply and offers living benefits — policy add-ons that allow you to access part of the policy’s death benefit while you’re alive due to serious illness — like accelerated death benefit and critical illness rider at no extra cost.
Best term life insurance for older parents: Pacific Life
Pacific Life is a great option for people in their 60s and 70s. Pacific Life offers relatively affordable rates across many health classifications and flexible guidelines for a number of health conditions, such as diabetes. The insurer also offers coverage amounts as low as $50,000, in case your parents only need a small amount of coverage as they age.
Best final expense life insurance for parents: Mutual of Omaha
Mutual of Omaha consistently offers some of the cheapest rates for final expense policies. This insurer offers both simplified issue and guaranteed issue final expense policies. There’s no medical exam required to apply for either policy, and the guaranteed issue policy offers near-certain approval, as long as your parent is of sound mind.
Comparing the best life insurance for parents
How much life insurance should your parents get?
Your parents should get enough life insurance to cover the cost of their funeral, medical bills, any debt they have, and any other expenses you would be left to pay when they pass away.
You also want to find a policy that has a monthly payment that you can afford. Working with a licensed agent is the best way to balance your family’s financial needs with your budget as the payor of your parent’s life insurance policy.
At Policygenius, our experts are licensed in all 50 states and can walk you through the entire life insurance buying process while offering transparent, unbiased advice.
What does life insurance for your parents cover?
People usually get life insurance coverage for a parent to cover any financial costs they’ll be responsible for when their parent dies. These could include:
Debt, including a mortgage
Cost of childcare or any domestic help, if parents help in this way
Cost of preparing their home for sale
How can you buy life insurance for your parents?
Getting life insurance for your parents is similar to getting a life insurance policy for yourself.
When can you buy life insurance for your parents?
You can buy life insurance for your parents if they’re no older than 85 — and you need to be at least 18 years old. Aside from that, there are no other special restrictions for buying life insurance for a parent as long as you have their consent.
Tips for discussing the benefits of getting life insurance with your parents
Getting life insurance on a parent can help your family financially, but it’s important to make sure that both you and your parent are on the same page about their life insurance coverage.
Get your parent’s consent. You can’t buy a policy without them — you’d be committing insurance fraud — since they need to answer application questions, participate in a medical exam, and sign off on the policy.
Let your parent know what to expect. They’ll need to apply with a licensed agent, take a medical exam or complete a medical interview, and sign the final policy documents.
Try to help your parent understand why it’s worth it to you. Your parent may be hesitant about letting you pay for their life insurance policy. It may be helpful for them to understand costs associated with their passing, and how a policy can help you handle affairs when that time comes.
If you or your parents have questions about the life insurance application process, our Policygenius experts are licensed in 50 states and can provide transparent, unbiased advice based on your personal situation.