Life Insurance For Parents - Do You Need It?

Our parents have cared for and raised us for years. As they age, we may occasionally have to take care of them. Unfortunately, many older people lack the reserves necessary to pay for obligations like unforeseen medical costs.

The bills might quickly mount up when helping parents in their later years. However, securing financial stability by purchasing life insurance for parents gives them access to the best care possible.

You are at the right spot if you're considering getting life insurance for parents to help cover medical or final costs or other debts.

This post explains what is necessary, all available insurance options, and much more.

Can I buy life insurance for my parents?

Yes, you can get life insurance for your parents. If parents are on board, getting life insurance guarantees that there will be no financial burden on anyone.

Moreover, several insurance plans also offer a portion of the payout during the parent's lifetime to assist with urgent needs like medical expenses. Life insurance for parents also provides a cash settlement to pay for funeral expenses when they pass away.

Do your parents need life insurance?

Life insurance offers a financial buffer to support surviving family members when someone dies. It's possible that parents may not believe they require life insurance. However, it's essential to consider the financial consequences should a parent pass away.

Here are a few other reasons to consider life insurance for parents:

Caring for ageing parents

It takes a lot of thoughtfulness and money to continue providing care for an elderly parent. However, a parent can no longer live independently and may have to move in with you or to an assisted living facility.

Life insurance can help you to cover these costs - assisted living facilities don't come cheap. If your parents are living with you, you might require a home nurse, change your home layout or add certain equipment to make life easier and safer for them.

You might occasionally need to take time from work to care for a sick parent or assist them with everyday duties. Again, a life insurance payment might assist in covering these costs.

Health and medical expenses

In some circumstances, parents might need 24-hour care, frequent trips to the doctor or hospital, and expensive prescription drugs or medical procedures. In addition, a severe illness might result in longer treatments and significantly higher costs.

Some life insurance policies provide a cash benefit that can be used to pay for medical bills, in-home care, and other expenses while the insured person is still alive.

Funeral costs

Funeral services are more costly than ever, and that trend will only increase. Unfortunately, many families don't realise how expensive funerals can be, based on the ultimate arrangements (burial or cremation) and the things selected for the service (casket, flowers, use of a funeral home for viewing, etc.).

A simple approach to reserve money for funeral costs while honouring your parents with an elegant send-off is through a life insurance policy.

Covering parent's debts

Nobody likes leaving debt in their family, but it does happen occasionally. After the demise of a parent, one may unexpectedly find oneself accountable for repaying any co-signed loans. Life insurance can be used to settle the debt and, thus, protects one from the financial implications of dealing with their parents’ debts.

Carry out parent's wishes

A parent's wishes to leave an inheritance for the children, grandchildren, some other dear ones, or a charitable organisation might be made possible through a life insurance policy. It's ideal to select numerous beneficiaries for a life insurance policy to fulfil parents' desires.

Types of life insurance for parents

There are quite a few types of life insurance for parents, depending on factors such as age and health. Unfortunately, with advancing age and health issues, options and affordability are often reduced.

Here are some options to consider before purchasing a policy.

1. Term life insurance

Term life insurance plans provide coverage for a predetermined time, such as five, ten, or twenty years. The policy term expires when the coverage expires. One of its benefits is that term life insurance is less expensive than other forms of life insurance. If the main concerns are paying off a mortgage and other debt or replacing income in the event of a parent's death, term life insurance may be the best choice.

2. Whole life insurance

A parent who desires life coverage, regardless of when they pass away, has the option of whole life insurance. These plans can accumulate cash value as well. However, it may take several years to accumulate any sizable cash value.

These life insurance policies allow parents to leave an inheritance for their children, donate to a charity, or meet their final expenditures. Despite costing more than term life insurance, you can count on receiving a life insurance payout whenever a parent passes away.

3. Investment-linked life insurance

Investment-linked life insurance are also known as ILPs. This type of insurance have an investment component in addition to the insurance component. A portion of the monthly premium paid covers life insurance, and the rest goes to an investment fund. Thus, investment-linked life insurance covers death, total and permanent disability, and critical illness while helping policyholders to accumulate wealth. Some insurance providers, such as Prudential, even offer ILPs until the policyholder reaches the age of 100, providing benefits and coverage for a long time.

How do you buy life insurance for your parents?

Following these tips can help make purchasing a life insurance policy for parents hassle-free.

Ask your parents about their wishes

Have a straightforward conversation with your parents about the type of assistance they desire as they age. Will they want to live with you, for instance? Do they accept in-home care or assisted living? This time is also an excellent opportunity to consider any charities or loved ones they want to support when they pass away.

Obtain consent from parents to buy a life insurance policy

Parents must provide their permission and be legally competent to sign the documents to get life insurance. Additionally, you must demonstrate insurable interest, proving how their death may affect your finances.

If you support them, it shouldn't be an issue with this. However, personal details of your parents, with supporting documents, are required to apply for the policy.

Choose a suitable policy

Depending on parents’ preferences, there are many forms of life insurance policies for seniors. After considering their requirements, choose a plan and level of coverage that makes sense for both of you.

Choose a beneficiary

Assigning a beneficiary for parents' life insurance is essential so that the money goes to support their wishes. Depending on the plan they pick, you can be the sole beneficiary or split the benefit between multiple recipients.

They may also assign one or more contingent beneficiaries to ensure the money goes to the right people or place.

How much does life insurance for parents cost?

The price of life insurance for parents varies depending on the kind of policy, the level of coverage, the insured's age and overall health. Premiums will probably be higher if parents are older and/or have deteriorating health. Obtaining a quotation is the only way to know exactly how much it costs.

Yes, it's possible to acquire pricing estimates depending on the parents' age and gender. Still, such prices are, at best, hypothetical. In addition, some details regarding their health are required to receive an accurate quote.

It would be ideal to obtain the following information to get an accurate quote for the insurance policy.

1. Age, height and weight.

2. Current and previous prescription drug usage.

3. Diagnosed diseases from the past and present, such as diabetes, high blood pressure, etc.

4. Significant past incidents such as accidents, hospitalisation, cancer, heart attacks, strokes, etc.

5. Frequency of alcohol and tobacco usage.

6. Any extreme hobbies, such as skydiving or rock climbing.

 

Life insurance for parents FAQs

Can you buy life insurance for your parents without their consent?

No, you cannot get life insurance for parents without their permission. One can complete the application on their behalf, but the parents must sign it, which means they must be legally competent.

Can I buy life insurance for my grandparents?

Yes, it's possible to buy life insurance for grandparents if they approve and sign the paperwork.

There is no need to justify your insurance requirement if the coverage is minimal. However, with high coverage, you might need to prove that losing them would place you in a difficult financial situation.

Can I pay for my parents' life insurance if I'm not the policy owner?

Yes, paying for your parent's insurance with their permission is possible, even if you are not the policyholder.

What is the best life insurance for my parents?

The ideal coverage for parents will depend on their financial situation, general health and age. The most affordable life insurance is a term policy. Still, a final cost policy is simpler to obtain if a person has serious health problems.

Where can I get life insurance for my parents?

When looking for an insurance provider, locate a reputable insurer with a high claim settlement percentage.

If you're looking for one in Malaysia, Prudential has been a leader in the insurance industry for years, with a reputation for being an affordable and dependable insurance provider in Asia.

Experienced Prudential financial advisers can assist in analysing your parents' needs and finding the best-in-class insurance plan that suits them.

Insurance for extended family

In addition to life insurance for parents, Prudential recently expanded the definition of financial dependants beyond the usual spouse and children. Grandparents, grandchildren, siblings, uncles and aunts, nieces and nephews and even cousins can now be nominated as financial dependants.

With Prudential’s Extended Family Coverage that’s Made For Every Family, and you can now protect extended family members who are financially dependent on you. Thus, no matter what happens to you, you can rest assured that those you love will have a secure financial future.

Conclusion

Purchasing life insurance for your parents is a wise decision. It can help protect you financially and help to provide them with the best care possible in their latter days.

If you’re considering life insurance for your parents, contact us immediately.