Yes, you can get a life insurance policy on your parents as long as they are willing to sign the application and cooperate with the underwriting requirements. Also, you can get a small policy to pay for final expense, but if you want to purchase a large policy on your parents, you would need to show that you contribute to your parents' financial well being in order to be the owner of the policy.
Insurance Adviser - Broker, SC Insurance Services, Oahu, Hawaii
Generally speaking, yes you can buy life insurance for your parents. The key is having "insurable interest". In other words you have a family relationship or economical relationship such as in the case with business partners. Of course your parents will have to consent to the arrangement and sign the applications. And they will have to qualify for the policy being purchased.
Everything mentioned above is correct. You need to also consider when selecting Life Insurance for somebody that's older the underwriting process you'll have to go through. Depending on the benefit amount, some companies have a nonmedical underwriting process. That means mom and dad don't have to give a blood or urine sample. You'll see these type of plans on TV. Yet be aware of what you're buying. Most of the TV Brands do not have guaranteed level premiums for life, or the death benefit isn't paid in full for the first two years. Allow me to explain in more detail.
These plans are often called final expense Life Insurance. Generally speaking there or two ways the benefits are paid out. If your parents or in overall good health, without a major event like a heart attack or cancer in the last two years, they should be eligible for what's called an immediate benefit. Once the policies approved the death benefit is available the next day.
The other type is called a graded benefit (or call date modified benefit in some cases). Again, generally speaking, most of these plans have a limited payout the first two years of policy is in force. Some pay a percentage of the death benefit while others refund all your premiums plus an interest rate. These plans are great if mom and dad are in poor health. Some applications have zero medical questions. I often see where someone is sold a graded benefit when they could have received a level benefit with a different carrier.
Underwriting is the key factor! If your parents are in good health they may want to consider a fully underwritten policy. That typically includes a small medical exam. Think of it this way, the deeper the carrier looks into somebody's health, the better their rate for the same benefit will be.
Then there's the whole question of what type of insurance to get. Whole Life (which is what the Final expense plans are), Term, or Universal Life. The Orman's and Ramsey's of the world will tell you to buy nothing else than term.. ever, ever, ever.... I'm not going to debate that now. Just going to say they are hurting a lot of people with such narrow, cookie cutter advice. ALL life insurance types have a time & place.
If you have further questions... Reach out. Honored to help... -gravy.
Robert J Russell - Finalist for Broker of the Year 2015
Broker Owner, InsuranceAgentsSelling.com, United States (Most States)
In most cases, you can purchase life insurance policies for your parents with their knowledge and approval. But how do you go about doing this, and what is the appropriate amount and type of coverage? Everyone's situation is different so knowing what kind of policy is important.
The most popular types of policies for parents are term life insurance, whole life insurance, and second-to-die policies. Want to know more - I can help with over 30+ yrs of experience.
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These plans are often called final expense Life Insurance. Generally speaking there or two ways the benefits are paid out. If your parents or in overall good health, without a major event like a heart attack or cancer in the last two years, they should be eligible for what's called an immediate benefit. Once the policies approved the death benefit is available the next day.
The other type is called a graded benefit (or call date modified benefit in some cases). Again, generally speaking, most of these plans have a limited payout the first two years of policy is in force. Some pay a percentage of the death benefit while others refund all your premiums plus an interest rate. These plans are great if mom and dad are in poor health. Some applications have zero medical questions. I often see where someone is sold a graded benefit when they could have received a level benefit with a different carrier.
Underwriting is the key factor! If your parents are in good health they may want to consider a fully underwritten policy. That typically includes a small medical exam. Think of it this way, the deeper the carrier looks into somebody's health, the better their rate for the same benefit will be.
Then there's the whole question of what type of insurance to get. Whole Life (which is what the Final expense plans are), Term, or Universal Life. The Orman's and Ramsey's of the world will tell you to buy nothing else than term.. ever, ever, ever.... I'm not going to debate that now. Just going to say they are hurting a lot of people with such narrow, cookie cutter advice. ALL life insurance types have a time & place.
If you have further questions... Reach out. Honored to help... -gravy.
The most popular types of policies for parents are term life insurance, whole life insurance, and second-to-die policies. Want to know more - I can help with over 30+ yrs of experience.