Are you thinking about getting a final expense life insurance policy for your parent(s), granparents(s) or other relative(s)? There are many things to consider before you apply. Here are some things for you to ponder as you begin to make your decisions.
Tell Us About Your Parents, Grandparents or other Relatives
Are they healthy, or do they have many health issues. This alone will help determine the type of policies they may qualify for. Do they have Alzheimer’s disease or any dementia? If so, they will only qualify for one kind of coverage.
The insured’s age will also be a consideration in getting life insurance. If they are over 90 there aren't any policies available in the US. As with any insurance, the older you are the more you can expect to pay. We'll us parents as we discuss this further, but the same applies to anyone you are considering for insurance coverage.
Which Kind of Final Expense Insurance will be Best?
Generally at this stage of life a term life insurance policy doesn’t make sense. You want to purchase a policy that will stay in force for your parent’s lifetime. That means a permanent policy, either universal life or whole life. The requirements for these policies differ quite a bit.
Are you looking for a small policy to pay for final expenses? Something between $10,000 and $15,000. If so, you would probably consider a final expense policy. They can be purchased without a paramedical exam and without blood and urine being taken. You have to be able to answer “no” to a number of medical questions. For more information on final expense life insurance policies click here.
That said, if your parents are healthy and willing to take that exam and give a blood and urine sample, you may be able to purchase $25,000 of permanent coverage for the same premium as the higher priced final expense policy and have $10-$15,000 more coverage. For seniors looking for final expense coverage these universal policies are best structured so that they do not accumulate any cash value. This keeps the pricing lower. This may be the most affordable life insurance plan.
Are you looking for more coverage? Maybe somewhere around $100,000 or more for final expenses, some debt repayment or to help your surviving parent? An independent agent is your best resource to help you know if your parent can qualify and if so how to get the best policy and which company will be best for your situation.
What Else Do You Need To Know About?
There are three important people in a life insurance contract. The owner, the insured and the beneficiary. The owner is the only one who can make any changes to the policy. They can change the beneficiary, the way the premiums are paid, and decide on any other available options.
The insured is just that. The insured can be the owner as well as the insured. However, if they are only the insured, they cannot make any changes to the policy. Once they agree to the coverage and sign the required paperwork to put the policy in place the owner has all of the rights.
The beneficiary(s) will receive the proceeds upon the death of the insured. If they are not the owner, they have no say at all and are generally not required to sign any of the forms.
Usually life insurance proceeds are tax free to the beneficiary(s). However, having three different entities as owner, insured and beneficiary in some situations can cause the payment to be taxable.
If you are paying for your parent’s life insurance policy it probably makes sense for you to be the owner and have the ability to make adjustments to the policy.
Where Do You Start?
It’s difficult at best to try and find the best pricing for life insurance on the internet by yourself. When looking for your parent, you will want to get some help. An independent life insurance agent is going to be able to make your job easy by explaining all of the different options and help you find the best coverage to meet your needs.
For certain policies your parent will have to take a senior screening exam. This test is for memory and general awareness. Your agent can help you prepare your parent for all requirements so they are not nervous about what to expect.
A good agent will walk you through the process from shopping, to applying, to purchasing the life insurance for your parents. You’ll have guidance with all decisions you need to make and you can rest easy that you are getting the best deal available. If you need any assistance after your policy is in force, you can contact your agent too.
The Bottom Line
Talk to your independent life insurance agent for assistance through the process of getting your parent(s), grandparent(s) or other family member(s) life insurance. They will help you sort out all of the different options available and help you do the right thing for your loved ones.