When an elderly parent relies on their adult children for support, the costs of medical bills, in-home or assisted-living care, and final expenses can add up, creating not only a financial burden for children but an emotional one as well.
Having a life insurance policy in place can be one way of providing financial security and peace of mind for adult children. Not only will a life insurance policy provide financial benefits, but it can also be a source of emotional support for the family.
What to Consider When Buying Life Insurance for a Parent
Here are some things to look for when purchasing a life insurance policy for an elderly parent.
Type of Coverage
There are different types of life insurance policies to choose from, including term, universal, and whole life. Which type of coverage you select will depend on the specific things you need to cover along with your available budget.
Amount of Coverage
Life insurance can be purchased to cover a wide range of financial needs, including any debts and funeral expenses, as well as provide financial support for the family after they pass. Create a list of how life insurance might be used to determine how much coverage to shop for.
Premium
The older we get, the more expensive life insurance becomes. Your parents’ health will also be a determining factor in terms of the life insurance premium. Sometimes, your budget will decide how much coverage can be afforded.
Age Limit
Not all insurance companies will write a life insurance policy after a certain age. And those that do will have different rates based on the person’s age. This is why it is important to shop around for a proper life insurance policy.
Additional Riders
Many policies offer valuable riders that can enhance the life insurance policy for either the insured, the beneficiary, or both. A few rider examples include the ability to convert a term policy into whole life or living benefits that may be accessed while your parent is still alive.
Cancellation Policy
When considering a permanent policy such as whole or universal life insurance, review the cancellation policy carefully to determine what penalties, fees, and surrender values may be imposed.
When considering a permanent policy such as whole or universal life insurance, review the cancellation policy carefully to determine what penalties, fees, and surrender values may be imposed.
