African American father and daughter

Life Insurance for Parents: Important Questions to Ask

When buying life insurance, we often only think about whether we need to purchase a policy for ourselves. The reason we purchase life insurance is to protect our loved ones from experiencing a financial burden when we pass.

Part of protecting them is protecting yourself, especially from unforeseen bills that could impact you financially. For instance, have you thought about what will happen when your parents pass?

Many times, surviving loved ones are left with the bills and may not have the resources needed to handle any end-of-life expenses their parents might have incurred such as medical bills and hospice care. Not to mention the thousands of dollars needed to cover their funeral expenses.

But can you buy life insurance for parents? Often times you can, but sometimes certain conditions must be met. We’ll help you determine if buying a life insurance policy on your parents can help you with these expenses.


Should I buy life insurance for my parents? 

Remember the old adage that says the only sure things in life are death and taxes? Here’s another fact – they both can be expensive if you don’t plan for them.

Although no one wants to think about the death of their parents, the reality is they will most likely pass before us. This often means the next of kin – usually a child – is left to handle their final arrangements.

With the average funeral costing about $9,000, funeral expenses aren’t something that most Americans can easily afford at a moment’s notice. And the federal government only pays your family $255 – and only if you qualify. This leaves a large chunk of funeral expenses that must be handled by surviving loved ones.

To help cover your parents’ funeral expenses, you can buy a specific type of life insurance called final expense insurance. It’s specifically designed to help cover final expenses such as unpaid medical bills, funeral arrangements, and any other end-of-life expenses.


Do I need my parents’ permission to buy life insurance for them? 

In order to purchase insurance for someone else, you must be able to demonstrate what’s called “insurable interest.” Typically, a person has insurable interest if they would be financially impacted by the death of the policyholder. Family members usually have automatic insurable interest.

Apart from demonstrating you have insurable interest, some companies may require the insured to take a medical exam to qualify for insurance or sign an application. These requirements depend on a variety of factors, such as the coverage amount.

For smaller policies, some companies will offer life insurance without a medical exam. These policies are usually issued based on answers to health questions on the application.


How do I talk about buying life insurance for my parents? 

Talking with your parents about life insurance and their final arrangements isn’t easy. But having this discussion can be helpful in many ways. Eighty-nine percent of adults over the age of 40 say discussing end-of-life wishes would be meaningful.

Explaining the purpose of the discussion is very important. Make it clear that your intention is to support their wishes exactly as they describe. Set aside a time to discuss how they wish to be remembered and determine how much life insurance is needed to pay for their final arrangements.

If you need help on how to have this talk, visit The Conversation Project to get tips and tools on how you can make the discussion as smooth as possible.


Who should own the policy?  

Your circumstances will determine who is in the best position to own the policy. Typically, the person paying the insurance premiums is also the owner of the policy. Some policies may require a specific person be the owner. Your insurance provider can help you choose the best owner and can walk you through the options available.

No matter who owns the policy, it’s important to make sure it’s easily accessible. Make sure the owner understands their responsibility and is willing to be the point of contact with the insurance provider.


How much life insurance should I buy for them? 

As noted earlier, the average cost of a burial, including the services and materials necessary for a basic funeral, can cost up to $9,000 or more. This cost may not cover additional services, such as transporting the remains, the use of a funeral home for viewing, buying a tombstone, or purchasing a burial plot.

Getting estimates from several local funeral homes can help you determine the final cost and get an idea which services are right for you.


How can Funeral Advantage™ help? 

Funeral Advantage was specifically designed to help families with funeral expenses. Funeral Advantage is made up of two partners: Lincoln Heritage Life Insurance Company® and the Funeral Consumer Guardian Society (FCGS).

There are two parts to the Funeral Advantage program:

The first is a final expense life insurance cash benefit offered by Lincoln Heritage. We offer easy qualification – no medical exam, just health questions on a one-page application. Most people can qualify, even if they have health issues. We pay approved claims within 24 hours.

The second is the family support services offered by the FCGS. Every Funeral Advantage policy comes with a free membership to the FCGS which allows policyholders to document their final wishes.

For years, the FCGS has helped its members save hundreds – even thousands – of dollars on funeral arrangements. Upon the death of a Funeral Advantage policyholder, the FCGS will help surviving loved ones cope with the many details that immediately arise.


Next steps

Buying life insurance for your parents is a thoughtful and caring decision. By doing so, you help ensure the funds will be there to carry out their final wishes and give them a respectable funeral.

Lots of life insurance policies can help you with this, but there’s only one that includes a free membership to the Funeral Consumer Guardian Society: Funeral Advantage. Arranging a funeral can be stressful and expensive, but Funeral Advantage is here to make it easier.

Learn more about Funeral Advantage, the leading final expense program.