Are your parents reaching their golden years? It may be time to protect your finances with a quality life insurance policy. Life insurance for aging parents is critical to every family.
Whether you are a younger child or an older one, discuss it with your parents early. You can save yourself thousands of dollars or more with the right policy.
Buying life insurance for family does not need to be confusing. The first step is understanding insurance and finding the right policy. Many Canadians can find the help they need by using the proper resources.
Here is a comprehensive guide to buying life insurance for your parents.
What Is Life Insurance?
Life insurance is a valuable resource when preparing for the future. A good policy will protect your family's finances should the worst happen.
You can adjust the amount of coverage you have under some policy options. However, life insurance typically covers basic expenses such as:
- Funeral costs
- Extended medical care
- Outstanding debts
- University education or tuition expenses
- Other end-of-life costs
Life insurance covers these essential expenses once a child inherits them. Having a good policy creates a safety net for everyone in the family. You can focus on other financial responsibilities without the anxiety of wondering if you can afford bills.
Benefactors typically receive the policy payout shortly after the death of the insured. A delay in payouts sometimes occurs if the insured individual:
- Died from suspicious or illegal causes
- Put false information on the application
- Failed to include risky health information or conditions
Why You Should Get Your Parents Life Insurance?
Many Canadians will opt out of life insurance once they reach their later years. They might consider it pointless once their children reach a certain age or financial status. Unfortunately, this reasoning comes with significant risk.
Quality life insurance coverage can protect parents’ finances even before their passing. For many children, caring for their aging parents can significantly strain their finances. Getting your parents a good life insurance policy cushions many of the later-life expenses that become your responsibility.
Many adults between the ages of 40 and 65 provide regular financial assistance to their parents. You can help offset some of these costs by investing in life insurance for aging parents.
Try not to wait on the slow accumulation of retirement funds to support your parents. Anything can happen at a moment's notice. However, a good life insurance policy can multiply your money fast.
Avoid financial surprises that could interfere with getting your parents medical help or interrupt your grief process. Let your parents know about the importance of having this coverage.
Before committing to any policy, you must speak with your parents directly. Make sure they understand the benefits of coverage options. Without their consent, it is almost impossible to get life insurance for aging parents.
Speaking sincerely about end-of-life arrangements can disclose valuable information for a policy search. Family members typically have insurable interest. Insurable interest means they can prove that the death of a person will impact them financially.
Try to have this conversation with them as early in life as possible. Waiting too late in your parents' life can jeopardize their eligibility to qualify for some coverages. Severe medical conditions that can occur later in life also make eligibility difficult.
Your parent may need a medical exam to discover any serious conditions. If your parent passes the exam, they can legally consent by filling out a life insurance application. They can then list you as the policy controller.
Being the policy controller means you can:
- Change the beneficiaries
- Transfer control to another eligible relative
- Control the number of riders
- Change the death benefit amount
Finding the Right Policy
Part of the conversation with your parents should be about what coverage the family needs. For some, their financial situation may only need burial and funeral coverage. Other families may require comprehensive insurance for mortgages and outstanding debts.
Consider the age of your parents when looking for the appropriate policies. You may benefit from shorter-term policies for younger parents. These plans are great for covering property that your parents still pay on.
Whole life policies are excellent for the elderly. They ensure the beneficiary has access to the death benefit upon their passing.
Let's look at each of these insurance types in more detail.
Term Life Insurance
Term life insurance protects you for a specific window of time. These policies work for younger parents and are usually affordable solutions. Some may benefit from this policy if their parents regularly pay on mortgages or car payments.
This policy will cushion the child from painful expenses should the parent not be able to pay them off before their death. The child will not be eligible for a death benefit payout if the parent outlives the policy.
Coverage typically lasts between 10 and 30 years. This detail means most elderly adults will not qualify.
Consider term life insurance a valid option for protecting your property earlier in life.
Whole Life Insurance
Whole life insurance for aging parents is a permanent solution for coverage. As long as the insured individual pays the premiums, the policy will remain in place until death. The policy offers comprehensive insurance and is usually more expensive.
Whole life insurance typically allows for more riders as well. Some people manage a range of expensive health conditions later in life. This plan will sometimes enable the benefactor to receive a portion of the death benefit early to pay parents’ medical bills.
Whole life insurance offers an extensive array of coverage options. Consider this choice for your parents, so you are confident about your financial protection.
As the name suggests, this insurance option covers basic burial and funeral expenses. Insurance holders can enjoy much lower premiums than other options. Qualification is generally easier to achieve as well.
Most medical exams only require basic information and history. Families can access the money they need when a loved one passes away.
Guaranteed Issue Life Insurance
Guaranteed issue life insurance is the best option for those with terminal or high-risk conditions. These policies can cover elderly or sick individuals. This insurance plan is typically a last resort for those who do not qualify for other options.
The most significant factor to consider is the high premiums rates. Many people must wait two years to access these benefits to prevent authorizing exploitative payouts.
Whichever plan you choose, ensure you get the best results for your money.
How Much Should You Spend on Life Insurance for Parents?
Always double-check your calculations before approaching an insurance company for offers. You should avoid paying more in premiums than what you will need. Every family is different, so speak to them about making the right choice.
You should consider several factors when you buy life insurance:
- What are your monthly expenses?
- What are your parents' monthly/annual expenses?
- What medical treatment or costs do your parents need?
- Are there any outstanding debts or mortgages?
- What kind of funeral will your parents need?
These are all critical questions to ask when adding up the value of your coverage. Some families spend little on life insurance for aging parents. Others spend a lot for the broadest range of coverage.
Most companies calculate premiums by factoring in the age and health of the insured individual. Expect rates to fluctuate from plan to plan based on that information.
Finding a No-Medical-Exam Life Insurance Plan
Now you know why getting life insurance for aging parents is critical. Finding insurance plans with a parent who cannot pass a medical exam can be frustrating. While guaranteed issue life insurance is an option, more affordable plans may be available.
If you aren't sure where to find them, it may be time to partner with a life insurance broker. These professionals can locate and pair you with some of the best coverage plans based on your needs. Avoid exorbitant premiums and hidden expenses by utilizing this resource.
Life insurance brokers protect your privacy. They can communicate and negotiate with insurance companies on your behalf without disclosing personal information. You can avoid the hassle and the headaches of deciding between dozens of options.
A broker is an advocate for their clients. These professionals compare prices and plan details in-depth. They work independently from insurance companies, so you know the final decision is in your best interest.
This way, you know what exactly you get from the policy. When enlisting a life insurance broker, clients can enjoy various excellent services. We highly recommend investing in this resource to navigate your coverage needs.
Contact Insurdinary for a Quote
Canadians trust Insurdinary to deliver quality communication between clients and insurance providers. Whether you are looking for life insurance for aging parents or preparing a group benefits plan for employees, we can help. Our team of qualified professionals will find you the best premiums for your needs.
Thousands of Canadians save money using our services to find the right insurance. If you are packing to travel, we can find you incredible travel credit card deals to fit your budget. Never go abroad without the best financial and property protection you can find. By filling out a 30-second form, you can find dozens of quality insurance options. Why waste time spending hours searching for insurance coverage that may not work? Speak with an Insurdinary representative for rewarding results.