Buying life insurance for your parents in Canada is a smart way to help cover future expenses like funeral costs or unpaid debts, and to ease the financial burden on your family. To do this, you’ll need their consent and proof of insurable interest. It’s important to compare policies, consider their age and health, and…
Planning for your parents future isn't always easy or easy to understand. Here we share 8 facts about buying life insurance for parents to help simplify things.
No one enjoys thinking about the death of a parent—but it’s a reality we all must face and prepare for.
Life insurance for your parents can be one less worry during a challenging time.
Even while grieving, financial responsibilities don’t pause. Your financial situation may shift the moment your parents pass, so it's important to take proactive steps to protect your family’s financial stability.
There are many reasons to consider life insurance for your parents. It can ease their minds, knowing they won't leave a financial burden behind—and it can protect you from absorbing their financial obligations.
Life insurance provides peace of mind for everyone involved. But finding the right policy can be overwhelming.
What are the best rates for your budget? What level of coverage is needed to handle your parents’ financial matters?
The decisions you make today will directly impact your financial wellbeing in the years ahead.
Preparing to Buy Life Insurance for Parents
Managing family finances is already a complex task—but buying life insurance for your parents requires teamwork and open communication.
Start by making sure your parents understand your intentions. Include key family members in the discussion. Their input is essential when determining policy specifics.
Then, choose a trusted resource to compare insurance policies. Conduct a detailed search and collect multiple quotes to find the best match for your needs.
8 Things You Need to Do Moving Forward
Before choosing a life insurance policy, it's important to clarify your goals and how the policy will serve your family. Everyone should be aligned and informed.
Here are the 8 crucial steps to take before buying a policy. Your family deserves financial security—but that requires planning and agreement.
1. Calculate the Needs of Your Family
Identifying your family’s financial needs can be complex. Start by assessing outstanding debts and thinking about fair distribution of benefits.
Some family members may have dependents, while others may be managing personal debt. Equal distribution may not always be equitable.
List all family assets and liabilities. A good goal is to bring each member to a level of reasonable financial security. This will help you estimate a realistic coverage amount.
2. Consider Your Family’s Existing Assets
Certain family members may already have significant assets and might choose to decline benefits. This can reduce the necessary policy amount and lower premiums.
Discuss these details openly, even if the conversation is difficult. Aim to adjust your policy estimate to a level that reflects actual need.
3. Offset Needs Using Your Parents’ Assets
Don’t forget to factor in your parents’ savings, property, or other assets. These can help reduce the insurance coverage required.
Be conservative when estimating asset values to avoid underinsuring. The goal isn’t profit—it’s to prevent financial stress during an emotionally difficult time.
4. Obtain Consent from Your Parents
Even if the policy is for the family’s benefit, your parents must legally consent to being insured.
They may also provide deeper insights into their debts, expenses, or final wishes, helping shape a more accurate and fair policy.
If they don’t fully understand the policy, take the time to explain it. It's your ethical duty to ensure they're informed. Remember: the policy could have implications during their lifetime.
5. Determine the Amount You Need
Now that you’ve evaluated family needs, assets, and debts—and received your parents’ consent—you should have a solid coverage figure in mind.
Next comes selecting the right insurance type to match that number.
6. Choose the Right Type of Life Insurance for Parents
There are different kinds of life insurance to consider:
- Simplified Issue Life Insurance: No medical exam required, available up to age 80, affordable—but may not offer enough coverage.
- Term Life Insurance: Provides coverage for a specific term. Requires a medical exam, but offers high policy amounts at lower rates.
- Whole Life Insurance: Lifetime coverage with higher premiums.
- Final Expense Insurance: Designed to cover funeral and burial costs only.
Each type has pros and cons—research thoroughly to choose what fits best.
7. Decide Who Will Own the Policy
Your parents are the insured individuals, and your family members may be the beneficiaries—but someone must own the policy.
The policyholder is responsible for making payments. You may decide to own it yourself or share ownership among beneficiaries. Choose what makes sense for your family structure.
8. Finalize and Review the Policy Setup
Before signing the policy, review every detail. Poor setup or overlooked tax implications could reduce your payout in the future.
Once finalized, you can rest easy knowing your family is protected—and your parents can take comfort in knowing their legacy is secure.
FAQs on Getting Life Insurance for Parents
Have questions about buying life insurance for your parents? You're not alone. Here are answers to some of the most common and important questions Canadians ask in 2025.
Yes, you can—but your parents must provide their consent and may need to participate in a medical exam depending on the policy type. You’ll also need to prove an insurable interest, meaning their death would impact you financially.
Final expense insurance is often ideal for seniors, as it covers funeral and burial costs. Simplified issue life insurance is also popular for parents over 60 or 70, as it doesn't require a medical exam and offers moderate coverage.
It depends on their debts, final expenses, and any financial support they wish to provide to loved ones. Consider funeral costs, outstanding loans, and whether they want to leave a legacy. A common range is $10,000 to $100,000.
The policy owner—often an adult child or family member—pays the premiums. In some cases, the cost may be shared among beneficiaries. Choose an arrangement that works best for your family's financial situation.
Not always. Policies like simplified issue or guaranteed issue life insurance don’t require a medical exam but may have higher premiums or lower coverage limits. Traditional term or whole life insurance usually does require a medical exam.
The Best Starting Point for Policies and Quotes
Selecting the right life insurance for your parents takes time and planning—but starting your search doesn’t have to be difficult.
Insurdinary offers fast, easy tools to help you compare life insurance quotes in Canada. Start with a few clicks and get instant options tailored to your needs. Contact us today to learn more or get a personalized quote.
