Do you need life insurance for your parents? You can help the elders of your family buy life insurance. In this article, we help you understand how you can assist your senior mother or father with purchasing a life insurance policy.
How can I get life insurance for my parents?
Quotacy can help you research the best life insurance for parents, guide all of you through the application process together, and help you to service mom or dad’s policy after it’s in place.
We know many of you in the sandwich generation are facing a delicate juggling act of working and saving for your own retirement, helping your kids get launched in life, and caring for your elderly parents who may be rapidly outliving their retirement savings.
Here’s a how-to guide to help you understand your options related to buying a life insurance policy on behalf of your mom or dad.
What are the age limits for life insurance for senior parents?
Age limits and health issues are the two top factors that limit whether seniors can buy a life insurance policy or not.
If you’re reading this article because you realize that life insurance for parents is a financial priority for your family, the most important advice we can offer is don’t delay talking to your mom or dad about it now.
As they get older and as their health declines, the options for life insurance for parents decreases due to underwriting guidelines for seniors determined by the life insurance companies.
Age Limits for Term Life Insurance for Parents
Upper age limits for policy purchase vary by company, length of coverage, and type of life insurance policy. Term life insurance is the most affordable policy option for seniors.
Let’s use the example of AIG to show you how your parent’s age and smoking status affects the term life policy lengths available to them:
- 10-year term available for ages 20-80 (tobacco users 20-75)
- 15-year term available for ages 20-75 (tobacco users 20-70)
- 20-year term available for ages 20-70 (tobacco users 20-65)
- 30-year term available for ages 20-55 (tobacco users 20-50
- 35-year term available for ages 20-45 (tobacco users 20-40)
Some term life carriers will write a policy for someone as young as age 16, but the maximum age limit for most life insurance companies is often age 75 or age 80 for a 10-year term life insurance policy.
This means the term life insurance policy for your parent would last a decade.
If they would die within those ten years, then the life insurance company will pay the death benefit money to your family (assuming you are named as a beneficiary on your parent’s policy).
Age Limits for Permanent Life Insurance for Parents
Age restrictions will vary by the specific permanent life insurance policy chosen by your parent.
However, in general, our permanent life insurance consultant can write policies for babies (14 days after birth) up to seniors age 85.
Consider Converting Term Life to Whole Life
Seniors who have a term life insurance policy that is convertible to whole life may wish to explore that option. Ask your parent if they already own a term life policy that may be converted before their policy runs out.
Types of Permanent or Whole Life Insurance for Parents
Permanent (whole) life insurance will pay out upon the death of the insured and these policies accumulate cash value that may be borrowed against during the lifetime of your parent. They are, however, more expensive to buy than term life insurance policies.
If you’re curious about the various types of whole life insurance for parents, read our guide to permanent life insurance.
See what you’d pay for life insurance
Age Limits for Final Expense Life Insurance for Parents
Seniors age 50 to 80 may buy final expense life insurance.
This type of permanent life insurance is also known as:
- guaranteed whole life insurance,
- funeral insurance,
- burial insurance, and
- guaranteed acceptance life insurance.
The advantage to this type of life insurance for parents is that there are no medical questions to answer or physical exams for mom or dad to undergo.
It’s a much less invasive way for seniors to get life insurance versus traditional underwriting of a term life or whole life insurance policy.
What is a Graded Life Insurance Policy?
It’s important to know that final expense life insurance is a graded policy.
This means that if your parent dies within two years of buying their final expense life insurance policy, the beneficiaries receive the total amount of premiums paid with interest, but not the full death benefit amount.
If your parent dies because of an accident within two years of buying their final expense policy, the beneficiaries receive the full death benefit payout.
After two years have passed after the initial purchase, the beneficiaries will receive the full death benefit amount no matter what causes your mom or dad’s death.
Fixed Premiums for Fixed Incomes
Final expense policies feature fixed premiums that will never increase and a cash-building component similar to other types of whole life insurance policies.
You may choose to pay for your parent’s life insurance policy premium or they can pay for it themselves. Whatever works best for your family will work for most life insurance companies.
Final expense policies usually have lower face values ($2,000 to $15,000) than term life or whole life insurance policies.
The payout money may be used for your parent’s funeral and end-of-life expenses.
More Flexible Than Pre-Paid Funeral Plans
Many families prefer to purchase a final expense policy rather than a pre-paid burial plan from a specific local funeral home.
Sometimes an aging parent may need to move to a new town due to changing elder care needs.
Rather than be tied to the investment in a specific local funeral parlor’s pre-paid burial plan, the money from a final expense life insurance policy can be used in any way the family chooses after their parent dies.
» Learn more: What Is Final Expense Life Insurance?
Can I get life insurance for my older parents today?
If your parents wish to purchase a plan today, the best option is to go with is final expense life insurance for your parents with a value up to $15,000 upon death.
If your parents have time to undergo traditional medical underwriting for either term life insurance or whole life insurance, your policy options to consider increase, along with the amount of life insurance you (or your parent) may purchase ($25,000 up to $65 million+).
No matter what type of life insurance your family chooses, Quotacy is here to help you and your parents every step of the way.
» Calculate: Life insurance needs calculator
About the writer
Quotacy is the country’s leading broker for buying life insurance online. We are obsessed with making it easy for everyone who has loved ones who depend upon them to have life insurance.