Is It OK To Get Life Insurance For Your Parents?

[mtblujeans]

My parents had always told me that they had life insurance. But, when my Dad unexpectedly passed away a couple of years ago, we found out he only had a $5,000 policy (not enough for a funeral). Now, I have asked my Mom to take an insurance policy physical. I expect her to say no. Does anyone else have insurance on their parents??

 

[ZachnElli]

I don't know and I'd like to know the answer too. My in-laws I'm sure don't have any and dh and I will probably have to take care of them when they go (he has 3 siblings, but we always take care of things). I'd like to get at least some small policies to take care of funeral costs.

 

[aprilgail2]

I looked into it but taking insurance on a 70 year old was very expensive and then it didn't cover them once they hit 80...my mom is 76 now and in good health...she may make it past 80 (all her aunts and mom lived into their 90's and one reached 100)....it just wasn't worth it.

 

[PamOKW]

If the idea is to help cover funeral expenses, you might want to set up your own account where you put aside some money on a regular basis. As mentioned, depending on their age and health the premiums may be high, the insurance may have an end date or they might not qualify at all. If they are young enough, you might want insurance as part of an overall financial planning strategy.
As to the original question, yes you could pay the premiums and be designated as the beneficiary. I'm pretty sure that the person has to sign the papers and be aware of the policy.

 

[beattyfamily]

Originally posted by mtblujeans
My parents had always told me that they had life insurance. But, when my Dad unexpectedly passed away a couple of years ago, we found out he only had a $5,000 policy (not enough for a funeral). Now, I have asked my Mom to take an insurance policy physical. I expect her to say no. Does anyone else have insurance on their parents??

Yes, after my DH's mother died in 1996 and we realized she had no insurance for a funeral, we took out a policy on DH's dad. No need for a physical. My DH gets the bill and pays it.

We aren't taking any chances this time. It was really tight and tough getting the money to bury DHs mother.

 

[Hillbeans]

I agree that you'll probably not be able to find an inexpensive life insurance policy at her age. Have you inquired to a prepaid funeral?

 

[mtblujeans]

Originally posted by beattyfamily
Yes, after my DH's mother died in 1996 and we realized she had no insurance for a funeral, we took out a policy on DH's dad. No need for a physical or even telling him. My DH gets the bill and pays it.

Can you tell what type of policy you got for him without physical or his consent? A prepaid funeral arrangement might work also.

 

[beattyfamily]

Originally posted by mtblujeans
Can you tell what type of policy you got for him without physical or his consent? A prepaid funeral arrangement might work also.

SORRY! I just called my DH for you and his dad did sign it but NO physical.

He got it through www.sbli.com and it's called "Senior Life". It's for people between 55 and 75 years of age. We got $10,000 on him when he was 62 years old and we pay $40 a month.

It's whole life policy and will build a cash value. In the first 2 years you get what you paid in plus a certain percentage but after 2 years, you get it all.

DH said you can go to their website and there's a calculator where you can figure out how much the monthly premium will be by putting in their age and the amount you want and it will tell you what the monthly premium will be.

Here's a link to the Senior Life page with all the info. Like I said, there will be no physical and it's for people between the ages of 55 and 75.

 

[scrapsoflife]

To the question of: can a child take out an insurance policy on their parents, the answer is yes. Anyone who has a fiduciary relationship to another can take out a policy on that person. Family members, business partners, etc. -anyone who you could possibily be responsible for financially.

The older a person is and the condition of their health will affect your rate, but there are many term-life policies that merely require a mouth-swab test to rule out HIV/AIDS. You really do want a term-life policy rather than one that offers a savings plan that you can take a loan out on--the latter costs more and if you take the loan out you have to repay it, plus interest, or it will be deducted from your final benefit upon death or termination of the policy.

I'll echo the thoughts of a previous poster that you may want to look into pre-paying for a funeral plan or some other pre-need type of deal, as those can be a lot more specific cost-wise and it will take some pressure off of the decendents when that time comes.

 

[ZachnElli]

Originally posted by scrapsoflife
upon death or termination of the policy.

I'll echo the thoughts of a previous poster that you may want to look into pre-paying for a funeral plan or some other pre-need type of deal, as those can be a lot more specific cost-wise and it will take some pressure off of the decendents when that time comes.

This sounds like a good idea. But how does this work? Can we make monthly payments? And what if they go out of business or change hands? I need to look into this. Dh thinks this is all creepy, but agrees this will fall on us completely when his parents go and they have no plans for anything. They can't even make their house payments now. They are both chain smokers and I can imagine how much we'd have to pay for insurance on them both.

 

[beattyfamily]

Again, with www.sbli.com you do NOT need a physical and the premium is only based on your state and age. It's for ages 55 thru 75 BUT they are only available in a few states.