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Today’s Topic Is About The Ultimate Guide To Getting Life Insurance For Parents.
Most likely you’re here today because you’re a child of a parent that needs some kind of burial insurance to take care of final expenses. Getting a life insurance policy.
So let’s find out how to get final expense insurance coverage for your parents.
NOTE: Would you prefer me to present this information to you in video format? Watch the video below for the ultimate guide to getting life insurance for your parents. Enjoy!
Here’s an overview of our discussion on getting life insurance for parents:
Questions To Ask Ahead Of Time Before Getting Life Insurance For Parents
Why Get Life Insurance For Parents?
There are several good reasons to buy life insurance for parents.
THEY ARE UNINSURED.
I got off the phone yesterday with a lady whose mother is 80 years old, and her term insurance policy had just lapsed. They had religiously paid on it for years and were told that they could renew it.
It turns out they lied to her, and she lost her coverage. She was left completely uninsured. So she called me to help her find a policy that wouldn’t cancel.
THEY ARE UNDER INSURED.
Also, some parents have coverage, but perhaps it’s just not enough.
Maybe you’ve talked to your mom or your dad, and they’ve got an insurance policy that they’ve had for years but it only covers for a couple thousand dollars. You know a funeral would cost much more than that.
Or perhaps they have a plan that they know is going to terminate, and you feel it’s important to have something that won’t terminate.
So these are good reasons to have coverage.
THEY CANNOT AFFORD IT ON THEIR OWN.
Maybe your parents just cannot afford to buy life insurance on their own. Maybe they’ve looked at buying life insurance or they’ve had it and they’ve had to let it go simply because they’re on a fixed income.
So many people now in their 50s, 60s, or 70s are retired or disabled and live only on the one check they get a month, and it doesn’t go very far.
If your parents are in that circumstance, this is a great reason to buy a life insurance policy for them. You want to make sure that they are insured when they pass away so that a death benefit will be paid to the beneficiary.
For example, I talked to a gentleman in Alabama a couple of years ago who retired as a sheriff. He had a good pension and a good amount of savings.
Unfortunately, his daughter ended up in rehab, and it cost him around $80,000 to $90,000 to put her through rehab several times. He ran through his entire savings, and he never would have expected to have done that.
Yeah, he had a good pension, but his living expenses matched his pension which didn’t leave anything really to save for funeral expenses.
So if you have a parent that’s had to run through their savings or they potentially could and you’re concerned, that’s a good reason to buy a life insurance policy.
THEY HAVE FINANCIAL OBLIGATIONS.
Another reason is if there are any kind of financial obligations such as a car loan, and you want to make sure that loan is paid so that you can take the car. Or maybe there’s a mortgage that your parent has, and it’s the intention of the parent for you to assume the house when he or she passes away.
Maybe you don’t want to assume the mortgage that comes with it. A life insurance plan can pay off a mortgage so that you can assume the house free and clear without having to assume the loan.
A life insurance policy can basically indemnify those debts so that they don’t pass on to you. So that’s a really good reason to buy life insurance as well.
THEY HAVE WORSENING HEALTH.
Maybe you’re just worried about your parents diminishing health. Sometimes when we have serious health scares, it makes us think twice about things that we take for granted. Life insurance is not a thing that we just walk around and think about all day.
Usually it’s precipitated by some sort of life event, a death or a serious health event. So if that’s happened, it’s a good impetus to begin looking for a policy to buy your parents so that they have some protection and give you some peace of mind.
It may not be entirely necessary to have it, but I’ve never met a bereaved loved one that declined a $5,000 or $10,000 check. It’s always put to good use.
So it’s a good idea to buy just to play it safe.
Who Buys Life Insurance For Parents?
CHILDREN WHO DON’T WANT TO ASSUME THEIR PARENT’S DEBT.
We previously mentioned the mortgage. Perhaps you don’t want to assume paying the debt.
If there’s other debt like a car loan that’s out there, perhaps you don’t want to pay that off. Maybe you’ve co-signed on a loan with your parents, and you want to have a policy in place to cover in case that obligation rolls up to you.
CHILDREN WHO CAN’T PAY FUNERAL EXPENSES.
Another really, really important consideration is that perhaps you’re worried that splitting final expenses between siblings would cause drama.
I can’t tell you how often a parent has passed away suddenly, and the siblings have to come up with money that invariably they do not have to pay for a very expensive funeral. You’d like to think your brothers and sisters are on good terms. You all love each other and agree to split everything. It’ll be fine.
Well, the thing you can’t account for is the personal financial situation that your brothers and sisters are in. What if they’re in a bind?
Maybe they can’t come up with $3,000, and now instead of $3,000 each, you have to come up with $5,000 each. Then that angst and anger grows in both of you for that one sibling that won’t do their duty to take care of mom or dad’s funeral.
You don’t want to go down this route! I’ve seen it time and time again where money issues like this tear families apart. It doesn’t have to be that way, and for a small premium you can ensure that it isn’t.
CHILDREN WHO WANT TO AVOID ESTATE DISAGREEMENTS
Another reason is that the cash death benefit may be a better way to solve estate disagreements between family members. I actually had this presented to me the other day, and I thought it was a very fine reason to own life insurance.
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I met with an 83-year-old grandmother who lived on a fixed income, but she had a large tract of land in rural Georgia. She wanted both her son and her grandson to receive a portion of her estate.
The problem was her son lived on this tract of land and basically took care of things. She recognized that it’s actually really difficult to sell land you may have, and then on top of that, the value of the land ends up being a lot less if you have to sell it immediately upon passing.
She didn’t want to put strife between her son and the grandson either, so she felt it was a much better idea to take out a life insurance plan that would pay the grandson a certain sum of money which would be his estate. That would be the legacy she would leave him.
In return, her son would assume ownership of the tract of land, and they could avoid a potentially big familial conflict. So in her wisdom, the policy became the solution. Let the grandson have the cash with the understanding that he has no ownership in that tract of land.
THE LAST THING MOM OR DAD WANTS IS FOR THEIR “STUFF” TO COME BETWEEN YOU AND YOUR SIBLINGS!
You can take this to any sort of relational conclusion. Let’s say your mom lives in her house with you or one of your siblings. Perhaps there’s a disagreement as to how the house is going to be split.
Is it going to be split three ways? Are we going to sell the house? There could be arguments over who gets what.
Maybe it’s a better idea to take a life insurance policy out on mom and then leave that cash benefit to the other siblings as consolation. They get the cash, and you get the house.
You can see how a life insurance policy can solve these estate considerations where there may be disagreements. It’s a lot easier to get a lump sum immediately than to put a house on the market, which can take months or years in some circumstances, especially if it’s a bad market and you may not get what you think it’s worth today.
Buying life insurance for the parents can definitely help solve these kinds of familial problems and, most importantly, remove the risk of losing a relationship with somebody you love.
Issues With Getting Life Insurance For Parents
So there’s a few circumstances you need to be prepared for.
You really need to make sure all these particular circumstances are wrapped up before you seriously pursue getting coverage on your parents for life insurance. Without this, you may be excited with the deal, but then you go back and find out mom’s not signing that contract.
So let’s go into detail about all three of these issues so you can better understand what your options are.
So the first concern is consent and the HIPAA law. Even though you’re purchasing the life insurance policy for your parent, the law requires consent from the insured.
Health records are private. The HIPAA rules say that individual health matters are explicitly private, and insurance companies must have the authorization of the insured in order to run medical records to apply for coverage.
So while you can certainly make the payments, in order for an insurance company to medically approve somebody, they have to have access to health records. If your parent doesn’t authorize access to the medical records, it’s just not going to happen.
You won’t be eligible to even apply beyond just sending the paperwork in. So you’ve got to get their permission when it comes to getting a policy on them.
The only exception to that is if you have power of attorney. If you have power of attorney, there are some plans called guaranteed acceptance life insurance plans that will allow you to take a policy out.
Now, there are some restrictions on that. Generally speaking, it’s a two-year waiting period policy, even if they are otherwise healthy. And you need to provide power of attorney paperwork to prove that.
So it’s not the best-case scenario, but that’s one way around it. Ultimately you really need to get with your parent, let them know what you’re going to do and why you’re going to do that. That’s really the preferred method.
Can you take out coverage on your parent without them knowing? No. That’s goes back to the HIPAA rules.
So you’re in a situation where, if you do this, you’re essentially committing fraud, right? If you forged their signature, even though you’re related to them, you’re still forging their signature and they never authorized medical record access.
What if your parent is not close by to sign off on the policy? Let’s say your parent lives in Pennsylvania, and you live in North Carolina. That’s totally fine.
Most of the policies nowadays can be completed over the phone or through the mail or email. So all methods are possible because an agent isn’t required to be face to face with the client anymore.
Another aspect you may be wondering about here is whether you can just put your parents on your life insurance policy, like part of your employee life insurance coverage or if you’ve got a family policy. The short answer is no.
It’s the same reason why you can’t take out a policy without their consent. HIPAA rules are the reason why it’s just against the law.
The same goes with employee-based life insurance programs. Those are usually relegated to immediate family members. So if you work somewhere, your spouse and your children can get coverage.
Bottom line: As long as the parent consents to the policy or if you have power of attorney, there are life insurance and burial insurance coverage options available.
So here’s the second concern. It’s not just enough to say, yes, I want to pay for a policy for my mom or dad. You’ve got to anticipate that there’s going to be some kind of resistance on behalf of the parent.
I mean, let’s face it, your parent has lived a long time. They’ve been independent for most of their life, and they may feel a bit prideful that they can’t take care of this particular matter. You have to anticipate this as well as how to work around some of the most common pride-related elements here.
So many parents don’t want their children paying for their financial obligations ahead of time.
Decent people feel responsible for their own situation in life. There’s a sense of pride that comes from independent living, and many people who are older have that sense because they come from that generation where they did pull themselves up by the bootstraps.
They did take care of themselves, and they didn’t ask anybody for any help. They sure won’t do it when it comes to something like this.
It’s important to have that discussion with your parent prior to buying life insurance. The goal is to make sure they understand your reason why you want to buy life insurance on them and to express your concerns and make completely sure that they understand this is not an attempt to profit from their passing.
Some people feel that you’re trying to take advantage of them and their death to enrich yourself. That will turn off a lot of parents that would otherwise be okay with it.
So you want to make sure you really explain to the parent why you’re buying life insurance coverage. And again, the main reason comes down to there’s some sort of financial obligation your personally worried about handling, and it’s important to have a very frank conversation.
You want to tell them that you’re concerned that you won’t have the money to pay for a funeral. You’re also worried that there may be drama caused from siblings trying to figure out who’s going to pay for what. If this plan isn’t there, it may cause permanent damage to the family.
If you present this to your mom or dad this way, it really gets them thinking about the impact of taking a little tiny policy out like this and how it’s really more than just money.
It’s really a way to ensure peace of mind.
Not just to take care of final expenses but to make sure relations between the kids they raised all their lives are maintained even after their death. The death of parents can cause significant family strife, and the policy is a great way to avoid it.
Remember, they ultimately must personally consent to the life insurance product. This is why you want to take the time to explain this to them so they know what to expect and really get them to understand why you feel the way you do and why you want to help out with a policy like this.
So the third concern is just actually qualifying your parents for life insurance.
As a broker myself, I can tell you that health does matter to some extent. There are insurance products out there that will cover regardless of the health situation, but it will affect the quality of the coverage that you get.
So you want to know what their health is. It doesn’t have to be super detailed, but you need to have a good idea where they stand on their health as a way to help me, if you work with me, give you an accurate representation of what the price is going to be and how the coverage is going to work.
Now, age is actually a little bit more important to consider than health. If you have a parent that’s over 90, there are no life insurance options anymore. If your parent is between 50 and 90, there are plenty of options. As long as they fall in that age range, regardless of health, there are options out there.
You do need to understand that there are most likely going to be some basic health questions that they do have to answer especially if you want the better quality life insurance options out there. A detailed medical examination is not necessarily required, but health questions are something that you’ll find is going to be part and parcel of the program.
Health questions are normal. It is life insurance after all.
Questions To Ask Ahead Of Time Before Getting Life Insurance For Parents
Who is paying?
One question to ask ahead of time before buying life insurance for your parents is who is paying. I basically implied here that you could pay for this particular plan. The parent can pay it if you wanted to give them the money to pay it. That works fine.
The insurance company doesn’t really care who pays as long as there is a familial relationship.
How much do you need?
That’s going to come down to what financial obligations you want covered. You’re going to need less if it’s just the basic cremation than you would if it was a burial. If there are other larger obligations, then obviously you’re going to need a larger policy.
So think in advance what your goals are, what you want covered, what expenses there are, and come up with a rough estimate of what you think is absolutely necessary.
Who do you want the beneficiaries to be?
Again, this is legally a decision by the owner of the policy, which usually tends to be the insured. You can actually set this up where you are the owner of the policy if you want control over this beneficiary setup.
Who do you want to have the money to pay for whatever obligations? That’s something you have to talk to your parents about and see what their opinions are.
Does your parent have to take an exam?
As I mentioned a moment ago, most likely not. Most of what we do is what’s called simplified issue.
In this case, we look at basic health history. We access medical records and prescription records to to determine insurability, and usually there’s no examination or physical involved. So it makes the process very easy.
How To Qualify Your Parent For Life Insurance
You may be wondering what is the best life insurance for my parent? I’m going to give you a brief explanation here of what the options are, and I’ll tell you my opinion.
Basically, term insurance lasts for a period of time before terminating. That’s where term gets its name, term is terminating. Sometimes the rates go up through the roof, but usually term insurance is designed to be outlived.
It’s not designed for permanent protection like whole life. With whole life insurance, the rates never go up, and the coverage never goes down.
As long as you pay your premiums, you have your coverage, and many times we can get full coverage started from the first day. And that’s permanent protection.
People don’t know when they’re going to die, so if you need to make sure a certain lump sum is going to be available, whole life is sensible.
Guaranteed acceptance is what what we do when somebody’s health is so bad that there’s no other choice but to do a no-questions-asked policy otherwise known as a guaranteed acceptance life insurance plan.
The big limitation with this is there’s no natural death coverage for the first two years of the policy. Beyond that, you’re fully covered, but it’s a last-ditch effort when nothing else works, and people take it because there are no other options. When you have to have something, this is the option to pick.
So how to qualify your parent for life insurance.
Let’s talk about that a little bit.
So you’ve got some different options. It’s likely your mom and dad are constantly seeing advertisements for life insurance on TV between watching
Westerns and The Price Is Right and in the junk mail that they get.
These typically are the most expensive and worst value options that are out there. So I usually implore you to just avoid that.
Try to get another option first because there are rate increases with these plans and sometimes they just force a waiting period. So even if you have a parent in good health, they make them wait two years.
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Like I described earlier, many of them cancel at 80. If you remember earlier, I talked about a client whose mom had one of these plans that canceled outright at 80, and she was in big trouble because they had to figure out how to get life insurance after that.
Now, you also can work with what are called captive agents. Captive agents specialize in life insurance, but they only represent one company.
JUST SAY NO TO CAPTIVE AGENTS!
Usually the company is more expensive, and they can’t shop for the best combination of price and coverage. So if there are health issues, they may put you in a worse plan than what you could find through an independent agent, like me.
I’m what’s known as a broker. I work with 10-15 different companies. I just take the applicant’s information, talk to my companies, and figure out which one is going to offer you the best price and coverage.
They’re all high-quality coverage, and it matches whatever your particular goals are. Then we just figure out who’s going to give you the best deal in order to maximize the amount of coverage you get for whatever premium you’re comfortable paying.
Working with an independent agent just gives you the best bang for your buck. This is especially true for your parents who likely are well into their 50s, 60s, and beyond.
They may have had some health problems, and when you start applying to normal life insurance companies, even minor health problems like high blood pressure or cholesterol can cause the price to be much higher than you would ever anticipate.
Whereas a broker can take that health information and see who’s going to give you the best deal. Many times it ends up being the best deal for the consumer.
So I’m going to actually show you some examples of life insurance quotes. We’re going to look at quotes for people 65, 75, and 85 years old for $10,000 in coverage for a basic burial plan.
We can do higher, we can do lower, or we can do way higher. The idea behind this is just to give you some sample numbers and quotes.
To give a personal quote is dependent on your parent’s age and health, what prescriptions they take, and how much coverage you get for them. Obviously you can see that it takes a lot of work, and a personalized quote, by definition, is unique to you. The concept here is just to give you a rough estimate of what to expect if you want $10,000 in coverage for someone around 65, for example.
So let’s take a look.
What you’re looking at here is just a sample selection of different life insurance companies that are available as well as their corresponding monthly premium.
10000 Whole Life Insurance, 65 Year Old Male, Non-Smoker
This is for a 65-year-old male for $10,000 in coverage. So again, which one you would qualify for is totally unique to you, but you’re seeing a range of between upper $40s to mid $50s.
10000 Whole Life Insurance, Female Age 65, Non-Smoker Rates
For a female who is age 65, for $10,000 in coverage at level rates, you’re looking at between upper $30s to mid $40s depending on your health.
10000 Whole Life Insurance, 75 Year Old Male, Non-Smoker
A male age 75 for $10,000 in level coverage can expect to have somewhere in the range of mid $80s to right around $100 a month.
10000 Whole Life Insurance, 75 Year Old Female, Non-Smoker
Females, nonsmoker rates, $10,000 is going to be between mid $60s to mid $70s for $10,000.
10000 Whole Life Insurance, Age 85, Male, Non-Smoker Rates
Males age 85 for $10,000 of level coverage is roughly going to be in the $170 range to the $230 range depending on what the person can actually qualify for regarding level of coverage.
85 Year Old Female, 10000 Whole Life Insurance, Non-Smoker Rates
And last but not least, females age 85 for $10,000 in coverage is going to range between the $120s to $170s, again, depending on health, not smoking, and level of coverage.
So those are just some quick sample rates for $10,000 in nonsmoking rates for 65, 75 and 85-year-old males and females. Again, I just wanted to give you an idea of what the level of coverage would run for. Your prices are totally unique to you, but hopefully you can kind of see what to expect.
And hey, if you want more, you can get more. If you want less, you can get less too.
After you figure out a rough estimate of your budget and what you want a life insurance policy to accomplish for your parents, here are the next steps. First, get a buy-in from your parents. Explain to them why you’re doing this, why it’s important, and what the consequences are.
Nobody can make the case better than yourself. Explain to them the concerns that you have, the fear that you have if this isn’t in place, and what the consequences could be for you personally, financially, and the relationship between your siblings. This is the best way to get them to drop the pride and buy into what it is that you’re suggesting.
Once your parents are on board, call me up at 888-626-0439. Then I can actually ask you some basic health questions about them just to get a feel for where they’re at, and then I can give you an idea of what your parent can qualify for.
Assuming you’re the payor, the next step is for me to contact the parent and have them complete an interview with me. After that, I’ll submit an application on their behalf, and once it’s approved, we’ll set up payment with you upon approval.
And that’s it!
No examinations, no unnecessary physicals. As long as you get approved, you now have the peace of mind knowing that your fears are taken care of.
So let’s talk about final steps. If you feel strongly that getting a policy is really important and you’re ready to talk to me, you can do one of two things.
You can go to my website at BuyLifeInsuranceForBurial.com. You can send me a message by clicking the contact box at the top of the page, or if you go to the bottom, there’s a little pop-up box. You can send a message that way and just ask me for a free quote.
If you just want to cut to the chase and see what your options are, call me at 888-626-0439, and you’ll speak to me live. Do leave a voicemail if you don’t reach me. I’m very busy all day talking to people like you and helping them and their parents with life insurance.
It only takes 5 or 10 minutes to figure out what your parent will qualify for, and then you can decide how you’d like to proceed from there. If that sounds great, we can proceed. If not, no big deal.