Margaret Huntley Last Updated On: June 27, 2023

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Why Life Insurance for Elderly Parents Is a Good Idea

Life Insurance for Elderly Parents

It’s not always an easy conversation to have, but it’s worth it to ensure you and your parents have peace of mind. Life insurance for older parents isn’t complicated, but it can be more expensive, especially as they get older. Buying as early as possible will help keep premiums lower and ensure you’re financially prepared in the unfortunate event of their passing.

As your parents’ age, the family dynamic changes. Instead of them taking care of you, it can often become your role to take care of them.

While it’s quite unpleasant to think about what may happen in the event of your parent’s death, it is important to have things arranged ahead of time. Money should be the last thing on your mind when mourning a loss, and purchasing a life insurance policy on behalf of your elderly parents takes care of those financial burdens. 

A life insurance policy can help with the following expenses:

  • Funeral arrangements
  • Medical bills
  • At-home care expenses
  • Moving a surviving spouse
  • Carrying out their final wishes

Keep reading to find out the best life insurance for elderly parents.

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Purchasing Life Insurance for Older Parents

Purchasing life insurance for aging parents is anything but complicated. All that you need is your parents’ consent and proof of insurable interest. 

Consent is essential to obtaining life insurance on behalf of an older parent because it is their wishes that need to be honoured. 

Insurable interest is also important because it proves the policyholder has a financial stake in the insured. Typically, family members are immediately granted an insurable interest in their parents. 

Steps to Purchasing an Elderly Parent’s Life Insurance

The following steps should be taken before purchasing a policy for your older parents:

  1. Speak with your parents: Of course, this conversation might not be pleasant, but it is meaningful. Asking your parents about their wishes will help you work together to find the best policy.

  2. Evaluate coverage needs: Depending on the surrounding circumstances, the amount of coverage that you need will vary. Consider funeral costs, medical bills, and any other outstanding debts that your parents may leave behind.

  3. Search for a policy: Once you have a clear understanding of your needs, you can begin to shop around for a proper policy. Researching different insurance providers helps you find the best policy for the best price.

  4. Decide who owns the policy: The person who pays the insurance premiums is the owner of the insurance policy. Your parents may be able to pay for their policy themselves, and only require your assistance in the search for coverage. Or it may be your responsibility to purchase the plan on their behalf.

  5. Name a beneficiary: A beneficiary is a person who will be responsible for the benefits awarded at the time of the insured’s passing.

Making sure your parents are aware of and happy with the process will help give everyone peace of mind. 

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Choosing the Best Life Insurance for Elderly Parents

Every person’s circumstances are unique. That’s why it’s vital to consider your individual needs when searching for a life insurance policy. 

Here are some different types of life insurance, and why they may be right for your elderly parents:

  1. Permanent Life Insurance: With these types of policies, you do not need to worry about the coverage expiring. You are also able to build cash value over time, and even access it as needed. While the coverage with these kinds of policies is comprehensive, it does cost more than other plans.
  2. Final Expense Life Insurance: Perhaps your only concern in the event of your parent’s death is covering funeral costs. This policy is designed for exactly that. The death benefit consists of a lump sum designated to cover end-of-life expenses.
  3. Term Life Insurance: These policies last for a set period of time. At the end of the term, the coverage ends unless renewed. A term policy could be a good idea if your parents have debts that need to be paid off within a similar time frame.
  4. Guaranteed Issue Life Insurance: Most life insurance policies require some sort of medical underwriting in order to qualify. If your parent’s health condition prevents them from qualifying for other types of plans, a guaranteed issue policy is your next best option.

Communicating with your parents and with your insurance provider is the best way to find the right life insurance for elderly parents. 

Margaret Huntley Margaret Huntley is a creative writing and philosophy student at Western University. She has been working as a freelance writer for over two years and has written about everything from insurance, to poker, to health and wellness for international businesses.

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