Making sure that elderly parents have life insurance coverage is a natural concern for most children. Whether you are looking for life insurance for an elderly mother or father, it is important to make sure our parents have what they need so everyone is prepared if something were to happen to them.
Isn’t it interesting that as we get older, the responsibilities we have to take care of our parents start to shift? This is an inevitable part of life, which includes the financial arena.
As parents get older you have to start thinking about what is going to happen when they die, and this includes the financial burden that is often left behind.
A death brings a lot of emotional turmoil as well as a lot of monetary woes. The expenses of a funeral alone has an average cost of around $7,000. This is an immediate expense that typically needs to be taken care of within a week or so. Beyond that, many elder parents leave behind debts such as credit card balances, loans, a mortgage, as well as those final bills.
If you or your elderly parents do not have cash saved to take care of these things, then it is prudent to make sure that there is some type of life insurance coverage in place to take care of these expenses.
Life Insurance vs. Just Putting Money in a Savings Account
There is a strong argument out there that it is smarter to just set aside money each month to build up a fund for funeral and other final expenses, but that is only the best choice in a few scenarios.
For starters, there are many insurance carriers that offer affordable coverage to seniors these days. This includes seniors and elderly who have health conditions, which is most often the case.
Here is an example of what I mean. If you are 70 years old and have some minor health issues like high blood pressure or high cholesterol, then you can qualify for a $25,000 whole life insurance policy for about $90 per month. If you were to put away $90 in a savings account, it would take you about 22 years to build up $25,000. So you have the option of obtaining a policy with a death benefit that is active right away vs. waiting 22 years for the same amount.
You can see that getting a policy is a very wise thing to do and brings peace of mind for everyone.
Here is an example of when it might make more sense to just set aside money. If your elderly parent is 80 years old and has many health issues or is a senior who smokes, then the rate that they are going to pay for even a small life insurance policy will be hundreds of dollars per month. The policy will most likely be graded, so there would be a two year waiting period as well, which means that if the insured passes away within 2 years, only the premiums paid into the policy are refundable but the actual death benefit is not paid out. In most cases, the premiums are unaffordable anyway.
Do My Parents Have to Know?
The simple answer to this is yes. All insurance companies require the knowledge and consent of anyone whose life is being insured, even if they aren’t the ones paying for it. Your mom or dad would have to sign the application and go through any necessary steps in the underwriting process.
If you want to pay the actual premiums, then that is fine. You can send in the payment or have it deducted from your bank account.
How Much Does It Cost for an Elderly Person to Obtain Life Insurance?
Because every situation is different there is no clear answer on that until you obtain a personalized rate quote. There are plenty of companies that are friendly to seniors and the elderly when it comes to life insurance coverage, and this includes seniors with health issues.
The price of a policy is dependent on several variables such as the age, the policy amount, health history, and prescription use.
If you are thinking about obtaining life insurance coverage for your older parent, or if you are searching for coverage on yourself, then the first thing you should do is compare rates from several companies. This will ensure that you get the lowest rates because every carrier has their own unique criteria.