Securing life insurance for parents if they are uninsured or underinsured is one of the most financially responsible decisions you can make for yourself and your family.
We understand that this decision can be complicated given family dynamics and personal circumstances. We also know that conversations with family surrounding life insurance can be sensitive.
For this reason, we’ve outlined everything you need to know about securing a guaranteed issue life insurance policy for your elderly parents. This includes questions you should ask to determine if your parents need a life insurance policy and how to determine if a guaranteed issue is the appropriate type.
If at any time you would prefer to speak with an experienced agent licensed in all 50 states, you can call us directly at 949-480-9638. We can help you navigate the life insurance purchasing process for your parents and ensure your family receives the right policy from the beginning.
Why Get Life Insurance For Parents?
There are several reasons why a child should consider having life insurance for their parents. This is true even if you are no longer a dependent and rely on them for financial support, or even if you do not have a great relationship with them.
As a direct family member, it is important to understand what costs you will incur once your parents pass away.
One of the most common reasons why a person would take a life insurance policy out on one or both parents is to cover the cost of a funeral and any other final expenses. Today, the average cost of a funeral is between $7,000 – $10,000 when adding the cost of a burial plot, headstone and memorial service.
Life insurance is a great way to relieve the burden of these final expenses.
Other reasons adult children have life insurance for their parents is to pay off any outstanding debts and medical bills. Now that people are living much longer, well beyond their 60s, 70s, and 80s, many are still liable for mortgage balances, auto loans, credit card debt and remaining medical bills. With the average American household carrying $15,654 in credit card debt, it makes good financial sense that these burdens do not roll over to the next generation.
Who Should Get a Life Insurance Policy for Parents?
Fortunately, there is life insurance for elderly parents into their 80s!
The only way to prevent expensive surprises down the road is to understand if your parents are uninsured or underinsured right now.
If your parents are retired, unemployed, on disability, or severely ill, chances are they are one of the two.
In some circumstances, this might be okay if your parents have a large enough savings account to pass on. However, if your parents have not set aside money to assist with expenses after they pass, then taking out a policy is a smart choice.
To determine if your parents have a need for insurance, here are some questions to ask yourself and them:
- Will you be responsible for paying off any debts?
- Will there be outstanding medical bills?
- Will there be ongoing household expenses that need taken care of?
- Will you need money to help with final arrangements (e.g. burial, cremation, ceremony, etc.)?
When you add up these expenses, you may also want to include additional coverage for any medical costs that have not been incurred yet. This will allow your family to determine how much life insurance your parents need, which is one of the first steps in selecting a policy.
Is a Guaranteed Life Insurance Policy Right for Your Parents?
If you decide that your elderly parents need a life insurance policy and they have any type of adverse health condition that makes them a high risk, then a guaranteed issue policy may the most appropriate choice.
A no questions, guaranteed acceptance policy are reserved for people between the ages of 50 and 80 who have severe and/or high-risk health conditions. These people are considered uninsurable by all term insurance carriers and most whole life insurance carriers as they are too risky.
Guaranteed life insurance policies for parents typically range from $5,000 to $25,000 in face amounts and are offered by 15+ carriers.
As the name implies, a guaranteed issue policy is guaranteed no matter what a person’s current medical status is. There is no medical underwriting, meaning the insurance companies will not ask any medical questions, pull a pharmacy report or require a medical exam.
Due to this, guaranteed acceptance policies are typically a “last resort” for those who do not qualify for underwritten policies. The premiums are usually more expensive and the amount someone can be insured for is limited.
To determine if guaranteed life insurance is right for your parents, here is a list of conditions that will instantly qualify them:
- They have a terminal illness and a life expectancy of 24 months or less
- They have ever had or been advised by a medical professional to have any kind of organ or tissue transplant
- They are currently on dialysis
- They have been diagnosed with or been treated for Alzheimer’s or Dementia*
- They are currently in a nursing home
- They are currently receiving hospice care
- They are confined to a wheelchair due to a chronic illness or disease
- They currently have cancer (except basal cell or squamous cell skin cancer)
- They have AIDS (HIV is considered insurable in some situations, but can be tough)
Additionally, some medical conditions do not necessarily disqualify people from underwritten policies, but the premiums would be cost prohibitive. If your parents answer “yes” to any of these conditions, a guaranteed issue policy will most likely be the most affordable.
- They have congestive heart failure
- They’ve had a heart attack within the last 12 months
- They’ve had a full stroke (TIA/mini strokes are accepted) within the last 12 months
- They had a heart or circulatory surgery within the last 12 months
- They had or have been treated for internal cancer or melanoma within the last 24 months and the cancer is gone
- They use oxygen to assist with breathing (excluding use for sleep apnea)**
- They’ve had or been treated for angina (chest pains) within the last 12 months
If your parents do not answer “yes” to any of these questions, they may be better suited for a final expense policy with underwriting.
Who Can Purchase a Life Insurance Policy for Your Parents?
If you are interested in purchasing a policy for your parents instead of your parents purchasing one for themselves, you may be asking yourself if you can.
As an adult child, you can pay for and take out life insurance on your parents, but you must have an insurable interest.
An insurable interest means that you would personally suffer from some type of financial loss when your parent(s) pass away. This could be any number of the expenses mentioned above.
If your parents are under financial hardship or are simply uninterested in paying, you can pay for policy from your checking account. Adult children can be considered the payor and beneficiary of a policy when their parents are the insured. There are some carriers where adult children can also be the owner of the policy, but they are uncommon.
You cannot, however, take out a policy on your parents without their knowledge. Your parents MUST give verbal permission to apply for coverage and sign the application as the proposed insured. This is regardless of who is paying for or owns the policy.
How Do I Purchase Life Insurance for My Parents?
Applying for a guaranteed acceptance insurance policy for your parents is very easy. It can be done over the phone in just a few minutes as there are no lengthy underwriting questions.
Information needed to process application:
- Full Name
- Date of Birth
- Social Security Number
- Legal Residence Address
- Email Address
- Primary Phone Number
- Death Benefit Amount
- Payment Information
For payment, these policies do require direct monthly payment from a checking account, but some carriers allow debit or credit cards for a slightly higher premium.
If you’re calling to help a family member with their coverage, we begin the application with you. Due to regulations, however, we will also need their verbal permission to finalize the application. If you are unable to be in the same room as your parents, we can easily conference them in or talk to them at a later time.
It’s important to note, all life insurance policies include a 30-day “free look” period, so you and your family will have a full month to review the policy. If you change your mind for any reason and decide they do not want/need the coverage, you can cancel within the first 30 days for a full refund.
Compare Life Insurance Rates For Parents
If you would like assistance in comparing policies and prices for a guaranteed acceptance life insurance policy for a relative, we are here to help. We are independent agents licensed in all 50 states and our services are free of charge. In one quick phone call, we will shop the 15+ carriers that offer no questions insurance policies to find the best fit for your families needs. This will ultimately save you time and money.
Call us today, toll-free at 949-480-9638 or request a free quote below to instantly compare rates for life insurance for parents from the best carriers.