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How to Buy Life Insurance for Your Parents
By Kat Tretina MONEY RESEARCH COLLECTIVE
Seeing your parents age can be difficult, especially if you have to help them with financial decisions. And if your parents don’t have life insurance — or if they have policies that aren’t sufficient to cover their needs — you may want to purchase life insurance for them.
Buying life insurance for your parents may seem daunting or overwhelming. But if you have your parents’ consent, it can be a more straightforward process than you may expect. It will provide your parents with financial protection and peace of mind.
Table of contents
- Why should you get life insurance for your parents?
- Types of life insurance for your parents
- How do you choose the right type of life insurance for parents?
- How much does life insurance for your parents cost?
- How to buy life insurance for your parents?
- Best life insurance for parents
- Life insurance for parents FAQs
- Summary of our guide to life insurance for parents
Why should you get life insurance for your parents?
Unfortunately, not having life insurance is a common problem. According to a study from LifeHappens, a non-profit organization, 106 million adults are without life insurance or need additional coverage.
There are several reasons why buying life insurance for parents is a good idea:
- Your parents have people dependent on them: If your parents have anyone financially dependent on them, such as disabled adult children or another family member, life insurance can ensure that their dependent has enough money to cover their living expenses once your parents are gone.
- A parent wouldn’t be able to make ends meet without their partner: If one parent is financially dependent on the other, life insurance provides critical protection for the surviving parent.
- You want to ensure your parents have long-term care: Long-term care insurance is harder to come by these days. But you can often add a long-term care rider to your policy for an additional cost. Long-term care riders can help cover the significant bills that come with skilled care as your parent ages.
- You want coverage for chronic or terminal illnesses: Life insurance plans often allow you to add accelerated death benefits to the policy. With accelerated death benefits, like chronic illness or terminal illness riders, your parents can use a portion of the policy’s death benefit while living to pay for their expenses if they’re diagnosed with a chronic or terminal illness.
- Your parents wouldn’t be able to cover the cost of a funeral: Funeral costs can be extremely expensive. The median cost of a funeral with a viewing and a burial in 2021 was $7,848, according to the National Funeral Directors Association. If your family doesn’t have that kind of savings, life insurance coverage can help pay for burial and other end-of-life expenses.
Types of life insurance for your parents
If you decide to get life insurance for your parents, there are three main types of life insurance policies available: term, permanent and final expense life insurance.
| Policy Type | Coverage | Benefits |
| Term | Temporary coverage | Least expense |
| Permanent | Coverage for your parent’s lifetime | Policy doesn’t end |
| Final expense | Coverage for funeral or burial expenses | You cannot be denied coverage because of health |
Term
Term life coverage is also known as temporary coverage or term insurance. It provides insurance for a specific term, such as 10 to 30 years. Your parents are only covered during the policy term. The beneficiary doesn’t receive a payout if your parents die after it expires.
Because term life insurance ends, it’s usually much less expensive than other forms of coverage. However, the policies often have age limits, so older parents may not be eligible. Term coverage is best for relatively healthy people who want inexpensive coverage for a specific time.
Permanent
Unlike term life coverage, permanent life insurance lasts for the covered person’s lifetime as long as the premiums are paid. It can also build cash value that your parents can access. Some examples of why they may want to access it are to supplement their retirement savings or to pay for a grandchild’s college education.
Permanent coverage, which can include whole life insurance and universal life insurance policies, tends to be much more expensive than term life insurance. It can be a good choice if your parents want the security of lifelong coverage, can afford the premiums and want to accumulate cash value.
Final expense
Final expense policies are a form of permanent life coverage, but they differ greatly from standard life insurance plans. Final expense — sometimes called “burial insurance” — is a type of whole life insurance policy with relatively small benefit amounts. Typically, the payout is $50,000 or less, and it’s meant to cover burial or funeral expenses.
Final expense policies are expensive for their payout amount, but that’s because they are guaranteed or simplified issue policies. Your parents cannot be denied coverage based on their health or medical history. Insurers charge more to offset their risk.
Final expense policies may be a good option if your parents are older or have existing health issues and struggle to qualify for other forms of coverage.
How do you choose the right type of life insurance for parents?
To decide which type of insurance is best, consider these factors.
Age requirements
Your parents’ ages will affect their coverage options since some types of insurance have age restrictions. For example, term life policies, particularly those that use accelerated or simplified underwriting, often limit their policies to those that are 65 or younger. By contrast, final expense policies are usually limited to older adults, such as 55 or older.
Coverage
Next, consider the type of coverage that will benefit your parents. Term life coverage is fairly inexpensive, but the policy is only in effect for a limited time. Permanent insurance may be a better choice if your parents need lifelong coverage.
Cost
Life insurance for older adults is much more expensive than it is for those in their 20s or 30s. If you opt for permanent life insurance, premiums can be hundreds per month. When considering which life insurance for your parents, be sure that the premiums are affordable.
Medical requirements
When your parents apply for life insurance, they must undergo an underwriting process. If they are in good health and have no medical issues, they may qualify for coverage with simplified or accelerated underwriting that allows them to skip medical exams. But most policies — especially those with higher benefit amounts — are fully underwritten and include a physical exam.
If your parents have health issues or a history of serious health conditions, you may want to opt for a guaranteed issue policy.
How much does life insurance for your parents cost?
The cost your parents may pay for life insurance is highly dependent on factors related to their age, health, policy type and more. As they age, insurers consider them riskier and may charge a higher policy price than if they were younger. It’s best to purchase a policy as soon as possible to get the best monthly rate.
It’s difficult to estimate costs because of the different variables, but premiums depend on the following factors:
- Their age
- Health
- Type of coverage
- Death benefit amount
- Additional riders
How to buy life insurance for your parents?
To buy life insurance for your parents, you’ll need their consent. For most types of insurance, they’ll also have to agree to go through the underwriting process, which may include a phone interview, medical exam and bloodwork.
When buying life insurance, ensure you and your parents discuss how much coverage they need and who will cover the premiums. Life insurance premiums for older adults can be expensive, so be clear on what you can afford.
Best life insurance for parents
Many companies offer life insurance for older adults, but two leaders are USAA and Mutual of Omaha.
USAA
Anyone can purchase life insurance through USAA. Unlike some of its other services, you don’t need to be connected to the military to have a policy. USAA offers both term and permanent life insurance, and you can get up to $10 million of coverage. That’s a higher coverage amount than some other companies offer, so you can get the protection your loved ones need.
Mutual of Omaha
Mutual of Omaha is a leading life insurance company that sells multiple insurance products, including term and permanent life insurance policies. You can buy permanent life insurance up to the age of 85. This insurer is a good choice if you have elderly parents. And Mutual of Omaha has a guaranteed issue final expense policy, so you can get coverage for your parents without the need for a medical exam.
| Company | Type | Maximum age | Coverage |
| USAA | Term Permanent |
70 for term life 85 for permanent |
Up to $10 million |
| Mutual of Omaha | Term PermanentFinal expenses |
80 for term life 85 for permanent |
$1 million or more for term and universal life Up to $25,000 for final expense |
Life insurance for parents FAQs
Summary of our guide to life insurance for parents
No one wants to talk about death, but making sure your parents have life insurance is a loving thing to do as their child. It ensures their needs are met if their partner dies, and it can leave a lasting legacy for their loved ones.
When shopping for life insurance for your parents, consider the types of coverage available, their age and health requirements, and the cost of life insurance premiums. With this information in mind, you can select the life insurance policy that best fits your family’s needs.
You can get life insurance quotes from many companies online; check out our picks for the best life insurance companies to get started.
