Life Insurance For Parents (And How To Apply)

Heidi Mertlich Heidi Mertlich Posted in Life Insurance 101
Last updated on May 22, 2019

Often, there’s a need for parents to have life insurance and they just haven’t taken the steps to buying it. They’re not alone.

There is a lot of confusion and questions about the topic of life insurance for parents.

Life Insurance for Parents

Consider the following statistics:

1. Most Americans believe in a need for life insurance.

Nearly 9 in 10 consumers (86 percent) agree that most people need life insurance. -LIMRA, Insurance Barometer Study

2. A gap exists between the financial needs of many Americans and how much life insurance they own if any.

Three out of five Americans (60 percent) report owning some sort of life insurance (individual and/or group), and more than a third of Americans (34 percent) said they are at least somewhat likely to purchase life insurance in the next year.  -LIMRA, Insurance Barometer Study

Understanding a need and taking action on that need are two entirely different things. Besides, purchasing life insurance is about as fun as watching paint dry.

Putting off purchasing life insurance happens all the time. Parents will tell us:

  • I need to talk to my spouse or partner
  • My budget won’t allow the purchase
  • I just haven’t gotten around to it
  • I don’t like to think about dying

Totally understandable. Yet, securing life insurance is more affordable and straightforward than you think, and that peace of mind is priceless.

You may be wondering if you can buy life insurance for your parents and help them take care of that need. The answer is: YES, you can. child talking about life insurance with elderly mom

Here’s the truth – If someone would suffer financially should your parents die, they need life insurance.

Let’s focus on the seven essential facts you need to know about purchasing life insurance for your parents.

Table Of Contents

  1. Agree
  2. Insurable Interest
  3. Amount
  4. Ownership
  5. Payor
  6. Beneficiary
  7. Type
  8. Quotes
  9. Best Policy
  10. Bottom Line
  11. Apply

1. Agree

In order to purchase life insurance on a parent, or on anyone for that matter, you must have consent.* It’s always necessary for your parent to agree to the life insurance policy. Think of consent as a way for life insurance carriers to protect against bad intentions someone might have.

Can I buy life insurance for a parent without consent?

In a word, no.

Just search online for, “foul play for life insurance” and you’ll see plenty of examples as to why consent is crucial. Dark, I know, but we are all aware that not everyone has good intentions.

Consent is always required.

*Note – an exception to this rule is if a parent is purchasing a life insurance policy on a minor child.

Key takeaway – In almost all cases, it’s considered unethical for a person to have life insurance taken out on them without their knowledge. Consent provides a safeguard and consent is required.

2. Insurable Interest

Every state in the U.S. has insurable interest laws to protect the integrity of life insurance policies.

These generally state that the only people who can take out or hold an insurance policy on the life of another person are blood or legal relatives or those with a financial interest in the survival of the policy’s subject. – Asher Hawkes, Forbes contributor 


Here’s an example: Your mom is 72 and lives off her income from a small pension and social security. She provides full-time childcare for your children. She doesn’t have a large amount of debt but has not saved up for funeral expenses or future medical bills that may occur.

Purchasing a modest policy (around $200,000) would likely make sense and would demonstrate an insurable interest.

Key takeaway – If you purchase a life insurance policy on someone (like your parent), you need to have an interest in their survival. Likewise, a financial burden would occur if they were to die.

3. Amount

Deciding on an amount of life insurance to purchase for your parent requires you to consider some important factors:

  • Income
  • Debt
  • Mortgage
  • Other expenses (i.e. medical bills)
  • Funeral expenses

Let’s consider some examples of appropriate life insurance amounts:

  1. Your dad is 68 and owns his house. He lives off his firefighter pension. He carries a moderate amount of debt from the collectible cars he works on. Your dad provides childcare for your family and helps around your house regularly. You decide to purchase a policy for $250,000 to cover debts, funeral expenses, and the financial loss you would incur in finding other childcare.
  2. Your mom is 78 and rents an apartment. She lives off of a modest social security payment. She does not carry debt. However, your mom has not saved up money for final expenses. You decide to purchase a policy for $50,000 to cover her final medical bills and funeral expenses.
  3. Your mom is 62 and carries a mortgage for $300,000. She recently retired and lives off a pension and social security. In addition to her mortgage, she carries debt from her car, credit cards, and medical bills. She does not have money in savings or investments. Your mom provides childcare for you three days a week. You decide to purchase a $600,000 policy for her to pay for all debts, final expenses and to provide for future childcare needs.

Key takeaway – Life insurance carriers require you purchase an appropriate amount of coverage for your parent’s situation. Too much raises a red flag. Too little won’t provide the type of financial protection you need.

4. Ownership

The person (or sometimes entity) that hold the rights to the life insurance contract. Ownership is important because he or she can make changes to the life insurance policy, such as:

  • Beneficiary change
  • Transfer of ownership
  • Lowering the death benefit
  • Adding or deleting riders
  • Request a rating change for the insured

Important – while ownership of a policy may change, the insured may not change.

If the owner of the policy is also the insured, life insurance carriers will not ask clarifying questions.

If you are merely assisting your parent in securing life insurance, and they will own and make payments for the policy, this is a straightforward situation without the need for further considerations.

On the other hand, if you will be the owner of your parent’s life insurance policy, life insurance carriers will require you to provide proof of insurable interest.

In other words, you will need to demonstrate that you would experience a financial loss in the event of your parent dying. This is usually easy to do.

Key takeaway – Ownership of the policy is straightforward if it will be owned and paid for by the insured: your parent. If you will be the owner of your parent’s life insurance policy, it’s crucial that it’s properly set up to protect you financially and insurable interest is established.

5. Payor

The payor of a life insurance policy is who will be making the premium payments. The payor owns the contract and is often the insured of the life insurance policy. However, that’s not always the case. If you are purchasing a policy for a parent, for example, you are the payor and your parent is the insured.

Key takeaway – The individual or entity making the premium payments is the payor. The payor is considered the owner of the contract.

6. Beneficiary

The beneficiary is the person(s), organization, school, church, or business receiving the death benefit from the life insurance policy. Beneficiaries are usually loved ones who would experience a financial burden if the insured passed away.

But really, the sky’s the limit when choosing a life insurance beneficiary. In fact, your parent could list their beloved dog as a beneficiary if they wanted to.

Often, the life insurance beneficiary is:

  • Spouse
  • Child or children
  • Small business
  • School
  • Church

When your parent is considering who to list as a beneficiary, these questions help:

  • Who does your parent want to help financially?
  • Would a person or a trust make more sense?
  • What are the beneficiaries circumstances and would they benefit from life insurance proceeds?
  • Is there a contingent beneficiary?
  • Are any of the beneficiaries minors?
  • Does my will match up with the life insurance policy proceeds?

Key takeaway – Carefully choosing a beneficiary prevents future policy headaches. Be sure to work with an expert agent to guide you through the process.

7. Type

Life insurance comes in all sorts of types and sizes. There is a multitude of life insurance plans for parents.

Let’s look at the five most common types of life insurance policies that children purchase for their parents:

No Exam Life Insurance For Parents

No exam life insurance is issued without your parent participating in a medical exam.

    1. Premium rates are often competitive with traditional fully-underwritten life insurance for healthy individuals.
    2. Policy face amounts available: $25,000 to over $1,000,000.
    3. Exact non-medical life insurance application process varies by company. Depending on the carrier, no exam underwriting may include:
      • Immediate accept/decline answer (considered Simplified Issue)
      • Possible APS (Attending Physician’s Statement) order
      • Request for the paramedical exam based on application or interview
    4. Some carriers have age limits or require an exam due to health or age. However, coverage is often offered up to age 80.

Term Life Insurance for Parents

Traditional, fully-underwritten life insurance.

    1. Life insurance offered for a specific term, typically between 10 – 30 years.
    2. Premium rates are affordable compared to other types of life insurance.
    3. Face amounts can range from $25,000 – over $1,000,000.
    4. A paramedical exam is required.

Whole Life Insurance for Parents

Also known as Permanent life insurance.

    1. Benefits do not expire.
    2. Can be purchased with or without a paramedical exam.
    3. Face amounts are available from $10,000 to over $1,000,000.
    4. Accumulates cash value.
    5. Premium rates are more expensive than Term Life.

Final Expense Insurance for Parents

Life insurance purchased to cover life’s final monetary needs.

    1. Considered a whole life product and benefits will not expire.
    2. Policies typically cap at $50,000 – $100,000.
    3. No paramedical exam and approval can be instant, after completing a health questionnaire.
    4. Often used to cover funeral expenses and final medical bills.

Guaranteed Universal Life for Parents

A bridge between Term and Whole life insurance.

    1. Technically a term product that is designed to last your entire life.
    2. Policies can last to over age 120.
    3. Face amounts available from $25,000 to over $1,000,000.
    4. Does not accumulate a cash value.
    5. Regularly purchased by parents to leave a legacy to loved ones.

Key Takeaway – Understand the components of different types of life insurance policies in order to make an informed decision for your parent.

Life Insurance Quotes For Parent

Here, you will find a comprehensive list of rates:

  1. No Medical Exam 
  2. Term
  3. Whole
  4. Final Expense
  5. Guaranteed Universal


No Exam Term Life Insurance Quotes For Parent: Male

 $25,000$100,000$250,000$500,000
40$13.87$14.26$25.80$45.29
45 $17.99$21.23$41.78$77.26
50 $24.49$32.03$57.18$108.06
55$34.74$52.77$100.10$193.90
60$52.02$90.03$190.35$390.73
65 $81.55$136.80$330.53$679.90
No Exam 20 Year Term Quotes. Subject to change. Monthly premiums. Quotes based on healthy individuals.

No Exam Term Life Insurance Quotes For Parent: Male

 $25,000$100,000$250,000$500,000
70$79.94$150.93$356.18NA
75$139.91$254.25$613.58NA
80$232.10$755.38NANA
No Exam 10 Year Term Quotes. Subject to change. Monthly premiums. Quotes based on healthy individuals.

No Exam Term Life Insurance Quotes For Parent: Female

 $25,000$100,000$250,000$500,000
40$12.28$12.18$20.88$35.46
45$15.47$16.61$32.06$57.82
50$20.00$23.52$48.73$91.16
55$27.53$36.66$80.66$155.02
60$43.21$59.40$136.35$270.18
65 $65.39$92.47$218.01$429.72
No Exam 20 Year Term Quotes. Subject to change. Monthly premiums. Quotes based on healthy individuals.

No Exam Term Life Insurance Quotes For Parent: Female

 $25,000$100,000$250,000$500,000
70$67.66$88.65$207.68NA
75$114.05$171.63$414.45NA
80$215.94$549.64NANA
No Exam 10 Year Term Quotes. Subject to change. Monthly premiums. Quotes based on healthy individuals.

Term Life Insurance Quotes For Parent: Male

 $25,000$100,000$250,000$500,000
40$8.39$10.89$17.80$28.74
45$10.75$15.58$27.95$48.64
50$14.86$20.74$40.85$74.51
55 $21.74$29.93$63.43$118.41
60$34.27$49.61$110.03$204.94
65$57.28$88.99$208.57$394.69
20 Year Term Life Insurance Quotes. Subject to change. Monthly premiums. Quotes based on healthy individuals.

Term Life Insurance Quotes For Parent: Male

 $25,000$100,000$250,000$500,000
70$68.28$79.36$178.06$319.34
75 $115.93$133.79$325.28$644.44
80$208.29$243.60$599.81$1193.50
10 Year Term Life Insurance Quotes. Subject to change. Monthly premiums. Quotes based on healthy individuals.

Term Life Insurance Quotes For Parent: Female

 $25,000$100,000$250,000$500,000
40 $7.42$10.33$15.44$25.25
45 $9.18$12.78$22.75$38.47
50 $12.28$16.45$30.90$54.87
55 $17.59$22.49$47.03$85.49
60$28.10$36.87$77.82$138.51
65 $46.81$62.04$135.95$255.63
20 Year Term Life Insurance Quotes. Subject to change. Monthly premiums. Quotes based on healthy individuals.

Term Life Insurance Quotes For Parent: Female

 $25,000$100,000$250,000$500,000
70 $53.97$55.48$107.62$198.52
75 $93.57$96.25$217.73$420.46
80 $176.49$195.21$478.84$951.56
10 Year Term Life Insurance Quotes. Subject to change. Monthly premiums. Quotes based on healthy individuals.

Whole Life Insurance Quotes For Parent: Male

 $25,000$50,000 $100,000$250,000
40$40.08$73.85$134.41$326.33
45 $48.15$89.99$164.41$401.58
50 $58.36$110.43$203.53$499.36
55 $72.34$138.38$255.50$629.30
60 $89.97$173.64$324.71$802.33
65$115.08$223.87$416.64$1019.21
70 $155.99$305.68$546.97$1359.38
75 $219.48$406.13$738.11$1868.98
80 $285.86$565.42$1097.07$2801.93
85 $368.55$730.80$1455.30$3628.80
Subject to change. Monthly premiums. Quotes based on a healthy individual.

Whole Life Insurance Quotes For Parent: Female

 $25,000$50,000 $100,000$250,000
40$38.81$71.31$114.98$277.99
45 $44.60$82.91$143.50$349.30
50 $52.50$98.70$175.44$429.14
55 $66.15$126.00$233.74$549.89
60 $82.18$158.07$279.62$670.55
65 $104.43$202.56$350.09$850.64
70 $141.88$277.46$453.36$1117.30
75 $193.31$362.64$614.22$1546.43
80 $248.48$490.66$882.53$2277.66
85 $302.03$597.76$1189.21$2963.58
Subject to change. Monthly premiums. Quotes based on healthy individuals.

Final Expense Quotes For Parent: Male

 $5,000$10,000$25,000$50,000
40$10.90$18.39$40.89$93.41
45$11.87$21.62$50.87$99.62
50$13.29$24.03$56.25$114.23
55$15.15$27.75$65.56$147.42
60$19.17$35.79$85.66$181.40
65$24.74$47.35$115.18$228.23
70$31.87$61.18$149.13$302.94
75$42.79$83.39$204.66$408.81
80$61.27$120.42$297.86$593.60
85$84.95$167.36$414.57$840.10
90$153.07$302.74NANA
Subject to change. Monthly premiums.

Final Expense Quotes For Parent: Female

 $5,000$10,000$25,000$50,000
40$10.33$16.80$36.89$83.51
45$10.97$19.81$45.33$90.53
50$11.17$19.80$45.67$108.50
55$12.43$22.31$51.96$130.36
60$15.28$28.02$66.22$159.69
65$19.10$35.65$85.30$194.84
70$23.62$44.68$107.89$244.95
75$31.83$61.11$148.94$338.13
80$45.45$88.36$217.07$505.64
85$66.30$135.90$334.95$682.511
90$129.88$256.36NANA
Subject to change. Monthly premiums.

Guaranteed Universal Life Insurance Quotes For Parent: Male

 $50,000$100,000$250,000$500,000$1,000,000
40$496.71$733.99$1592.50$3015.00$5690.00
45$559.10$848.19$1912.50$3590.00$6700.00
50$743.00$1105.00$2425.00$4570.00$8580.00
55$855.97$1331.00$2995.00$5775.00$11100.00
60 $1174.33$1709.00$3905.00$7645.00$14950.00
65 $1403.66$2272.00$5257.50$10180.00$19700.00
70$1997.08$3066.00$7172.50$13925.00$27000.00
75$2599.37$4115.00$9697.50$19230.00$38120.00
80$4079.05$6615.00$15652.50$30890.00$60940.00
85$5338.72$10626.15$26477.47$52841.18$105467.54
Subject to change. Annual premiums. Quotes based on healthy individuals. Policy for up to age 121.

Guaranteed Universal Life Insurance Quotes For Parent: Female

 $50,000$100,000$250,000$500,000$1,000,000
40$445.02$623.29$1332.50$2545.00$4840.00
45 $502.36$729.73$1620.00$3029.74$5800.00
50 $637.29$941.00$2050.00$3950.00$7590.00
55$732.39$1166.99$2640.00$5039.48$9710.00
60$1005.45$1499.00$3402.50$6610.00$12830.00
65$1177.72$1900.00$4375.00$8570.00$16780.00
70$1682.79$2619.00$6127.50$12015.00$23550.00
75$2159.23$3671.00$8655.00$17150.00$33980.00
80$3255.09$5583.00$13225.00$25780.00$50200.00
85 $4198.02$8353.93$20.771.44$41520.82$82828.65
Subject to change. Annual premiums. Quotes based on healthy individuals. Policy for up to age 121.

How To Find The Best Life Insurance For Your Parent

Every parent has unique life insurance needs and considerations. Here are the top five things for you to analyze.

Life Insurance Budget

You will only want to purchase a policy for your parent that makes sense for your finances. For most, affordability is paramount.

There are a number of factors that influence the cost of a policy, including:

  1. Face Amount
  2. Term vs Whole
  3. Age
  4. Gender
  5. Health
  6. Tobacco use
  7. Lifestyle

In the process of purchasing life insurance for your parents, it’s ideal to secure coverage for:

  • an adequate amount
  • an appropriate length of time

However, we can only afford what we can afford. And for many of us, it’s stretching our budget to buy life insurance for a parent.

Cheap Life Insurance For Parents

Not all life insurance costs the same.

Consider the cheapest forms of coverage by comparing quotes:

$50,000 Life Insurance For 65 Year Old Male

Policy TypeMonthly Premium
10 Year Term$38.85
20 Year Term$167.87
Guaranteed Universal$174.24
Whole$240.23
Quotes are samples only. Based on a healthy applicant. Subject to change.

$50,000 Life Insurance For 65 Year Old Female

Policy TypeMonthly Premium
10 Year Term$29.83
20 Year Term$147.25
Guaranteed Universal$154.44
Whole$217.57
Quotes are samples only. Based on a healthy applicant. Subject to change.

Keep in mind – your parent must qualify for the specific type of policy.

Parent’s Age

Your parent’s age plays a primary role in the type of life insurance you should look at.

Younger applicants will have the most options. As your parent ages so do their choices for coverage.

Life Insurance For Elderly Parent

Just what age designates someone as elderly, anyway?

For your parent, chances are, it’s some particular number that’s more than their age.

Life insurance carriers, on the other hand, do have age cutoffs for their products. Fortunately, it’s possible to find a policy for elderly parents.

Let’s take a look at typical age cutoffs for different products:

  1. Term – age 80
  2. Guaranteed Universal – age 85
  3. Whole – age 85
  4. Final Expense – age 90

Key Takeaway – Elderly parents buy life insurance all the time, typically up to age 90.

Parent’s Health

Your parent’s health, or lack of, plays a major role in deciding which form of coverage to buy.

For healthy parents, especially if they 80 years old or younger, life insurance companies will usually offer all forms of coverage. However, if serious health conditions exist, policy options often change.

Life Insurance For Sick Parent

Sick parents are frequently still able to buy coverage. Your parent’s specific illness matters. Health conditions are all underwritten differently.

Yet, thankfully, life insurance approval – even if your parent is sick – can happen.

Common health conditions that typically won’t prevent your parent from being approved for a policy:

  • Diabetes
  • Cardiovascular conditions
  • Overweight
  • Hypertension
  • Cancer
  • Arthritis

Keep in mind – you may need to look at Final Expense or Guaranteed Issue life insurance if your parent’s seriously ill.

Life Insurance For Terminally Ill Parent

If your parent has been diagnosed with a terminal illness, there is one specific type of policy they can qualify for: Guaranteed Issue (GI).

We only recommend GI life insurance when your parent doesn’t qualify for other forms of coverage.

Often, if your parent’s doctor utters the words, “terminally ill”, it prompts you and your family to get affairs in order – including life insurance. GI is a godsend for those circumstances.

Most important features of Guaranteed issue:

  1. Modest policy size
  2. No medical exam
  3. No health questions
  4. Form of permanent life insurance
  5. The death benefit is graded

No Exam Life Insurance

No medical exam life insurance for parents is requested all the time.

For many, there is no interest in being poked and prodded during the application process:

  • Medical environments make your parent recoil
  • The thought of the paramedical exam prevents your parent from applying
  • Your parent would rather skip the inconvenience
  • You’d prefer to secure a policy now, rather than waiting weeks for medical underwriting

Fortunately, just about all different types of life insurance have policies available without a required physical. And, some types of life insurance never require a physical exam – Final Expense and Guaranteed Issue.

Compare Life Insurance Plans for Parents

Before applying for a policy for your parent, it’s worthwhile to understand a few things:

  1. What is my (or my parent’s) budget?
  2. What are my parent’s financial needs?
  3. How long will my parent’s financial needs last?
  4. What type of policy does my parent qualify for? (age and health are major factors)

Further, know that each life insurance company is different in its products, premiums, and riders. Be sure to know your options and compare premium pricing with an independent agent, first.

Bottom Line for Life Insurance for Parents

Purchasing life insurance for a parent is common and provides financial peace of mind for the family. If your parents agree to the policy, it’s legal and can be a smart investment in your family’s future.

To review, here are the four main parties to a life insurance contract:

Owner

The person (or sometimes entity) that holds all the rights to the life insurance policy. The owner is who can make changes to the policy. They are ultimately responsible for the purchase of the contract.

Insured

The person whose life is insured by the policy. Often, the owner and the insured are the same people. If the owner is not the insured, life insurance companies will ask for you to demonstrate an insurable interest (see #2).

Beneficiary

The person(s) who will receive the death benefit upon the death of the insured. In the case of your parent, the beneficiary is often the child (or children) of the parent.

Insurer

The life insurance carrier providing the life insurance contract.

WARNING – It’s crucial that the policy is set up appropriately. There is the possibility of falling into a tax trap if your parent’s life insurance policy is not handled carefully. Life insurance proceeds are usually tax-free, except when the owner, insured and the beneficiary is three different people. This is known as the Goodman Triangle.

An example of how the Goodman Triangle can happen

  • A son owns a life insurance policy on his mom. The son’s daughter is named as the beneficiary. For tax purposes, the policy proceeds are viewed as a gift to his daughter and would be taxed accordingly. The son would be taxed on the “gift” he provided his daughter.

How to avoid the Goodman Triangle

  • In most cases, it can be avoided by having two “points of the triangle” be the same person.
    • In the example above, if the son’s mom was both the owner and the insured of policy, there would no Goodman Triangle.

Key Takeaway – Use caution when setting up your policy and understand how to avoid the Goodman Triangle. Don’t have the owner, insured and beneficiary be three different people.

Apply For Life Insurance For A Parent

The most important first step to take is to collaborate with an independent life insurance agent. An independent agent represents multiple carriers to provide multiple life insurance quotes.

Your best interest is at heart and they are not held captive to a particular life insurance carrier. That way, your parent will receive the highest quality policy at the most competitive price they qualify for.

To get started, fill out our free instant quote.

6 Comments
Avatar
Deanna Barstow

Life ins on parent

October 9, 2018 at 2:17 pm
    Heidi Mertlich
    Heidi Mertlich

    Hi Deanna, We're happy to point you in the right direction. Reach out anytime with your specific needs.

    March 18, 2019 at 1:06 pm
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Tina Stambaugh

quotes

February 2, 2019 at 10:39 pm
    Heidi Mertlich
    Heidi Mertlich

    Hi Tina, Please fill out our online quote form to get started. Thanks!

    March 18, 2019 at 1:05 pm
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Manuel

Moms 89 need info on whats best life insurance to purchase so funeral and burial arrangements are taken care immediately.
Thank you

February 21, 2019 at 12:31 am
    Heidi Mertlich
    Heidi Mertlich

    Hi Manuel, Thanks for reaching out. Please fill out our online quote form to get started. We're happy to help you.

    March 18, 2019 at 1:03 pm
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