Do you have parents who are getting older? Are they in retirement or heading toward it? They might not have life insurance policies, which can put everyone in your family in difficult financial positions when one of them dies.
Although you may never have thought about how to get life insurance for your parents over 65 years old, you should put it on your to-do list. Why? Consider what can happen if a parent dies without a life insurance policy in place:
- Your surviving parent will have to live on existing money without any further compensation. A life insurance policy would give him or her a lump sum, which could help pay for everything from daily living to the deceased’s funeral costs.
- Some of your parent’s debts will have to be paid by survivors. For instance, if your mother dies and your mother and father had a joint credit card account with a high balance, your father will still have to pay it off on his own. This can be overwhelming, especially if your mother was receiving social security benefits that your father will no longer have as an income stream.
- Social security will immediately halt all payments made in the deceased’s name. If your parent who died was the main provider of the household, the entire household could be left without a much-needed check every month.
In other words, it’s essential to have the discussion about life insurance with your aging parents. However, you do need to understand a few realities about buying life insurance for an elderly parent.
Facts About Life Insurance for People Age 65 and Older
First, you’ll want to understand that life insurance carriers have to weigh the risks of the people they insure. An individual in his or her 60s or 70s is more likely to die soon than a 40 year old. Therefore, some life insurance providers are hesitant to cover people of retirement age. This is one of the biggest reasons that children of older parents should work with a local independent insurance agent to explore different options and find the one that has the most reasonable rates.
Next, you can expect to pay higher premiums for an elderly parent than you would for someone much younger. The policy probably won’t be for as much, either. However, you might not need a $500,000 life insurance policy. Realistically, a smaller life insurance policy could be enough to make ends meet and cover some debts and funeral expenses for your surviving parent or the family in general.
Finally, you’ll want to talk with your agent about term versus whole life insurance. Each has its own advantages depending on your parents’ ages and health status. Explore several choices to see which will give them the best coverage for the most affordable amount.
It’s never too late to get a great life insurance policy. Even if your parents are at the latter stages of life, they can get the protection and peace of mind that comes from having life insurance in place.