Co-Founder, Coastal Financial Partners Group, California
You can apply for life insurance insuring each parent and be the policy owner and beneficiary. They would have to be insurable. The insured parent would have to consent to the coverage and the release of medical information with their signature.
While you might wish to apply for one policy on each parent, policies are available insuring both on one policy that pays at the death of the second to die, which may be a better fit for your needs and be more cost effective than two policies.
To get life insurance on your parents, the first step would be to gather their health information. Ask them for their medications, dates of diagnoses, treatment dates, whether they use(d) tobacco and when, and their weight now and a year ago. Often adult children think they know all these details about their parents, but it never hurts to ask. Being declined for an overlooked health reason is hard on both parents and children, and can be avoided with thorough fact finding ahead of time.
Once you have this information, you can shop agencies that carry senior policies and/or final expense policies to get their best price. Some of these policies will simply require your parents to sign the application; some will require a phone interview; and some will require an exam. If you do not know what your parent is willing to go along with ahead of time, gather quotes for a couple different types of policies to present to them.
If you are applying for a large face amount, the life insurance company will require that you have a financial interest in your parents' lives, such as you living in their house or they living in yours. Smaller face amounts for final expense purposes will not usually have that requirement.
I would assume by the nature of your question, you are an adult and your parents are aging. If you were young and dependent upon their care and income, the answer would be most definitely, they should both purchase life insurance to protect you from a financial disaster.
You can purchase lower face amounts of life insurance on your parents without a large burden of insurable interest. Typically this is done for final expense or cleaning up some debt at their passing. Keep in mind even though you are allowed to own the policy, pay the premiums and be their beneficiary, the parents will be the insureds. All insureds must sign the application with full knowledge of what they are purchasing. The underwriter will want your parents health history, life style, age, etc. Depending on the age and face amount, it is possible they will need a paramed exam for blood, urine, EKG, etc. Just be sure they are informed of your decision before starting the process.
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While you might wish to apply for one policy on each parent, policies are available insuring both on one policy that pays at the death of the second to die, which may be a better fit for your needs and be more cost effective than two policies.
Once you have this information, you can shop agencies that carry senior policies and/or final expense policies to get their best price. Some of these policies will simply require your parents to sign the application; some will require a phone interview; and some will require an exam. If you do not know what your parent is willing to go along with ahead of time, gather quotes for a couple different types of policies to present to them.
If you are applying for a large face amount, the life insurance company will require that you have a financial interest in your parents' lives, such as you living in their house or they living in yours. Smaller face amounts for final expense purposes will not usually have that requirement.
You can purchase lower face amounts of life insurance on your parents without a large burden of insurable interest. Typically this is done for final expense or cleaning up some debt at their passing. Keep in mind even though you are allowed to own the policy, pay the premiums and be their beneficiary, the parents will be the insureds. All insureds must sign the application with full knowledge of what they are purchasing. The underwriter will want your parents health history, life style, age, etc. Depending on the age and face amount, it is possible they will need a paramed exam for blood, urine, EKG, etc. Just be sure they are informed of your decision before starting the process.