Can you get life insurance for your parents?

April 4, 2022

Not all parents will die solvent and some children will take on the burden of a parent’s debts or outstanding bills when they pass.

If a parent with debt has made no provision to pay for their own funeral and/or perhaps all of their assets and savings are being gobbled up by home care fees, you may want to consider taking out life insurance for parents.

But can you buy life insurance for someone else? Here’s what you should know.

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Can I insure my parents?

Can I get life insurance for elderly parents?

How to arrange life insurance for your parents - 5 steps

Can I insure my parents?

Yes, you can insure your parents IF:

  • there is an ‘insurable interest’ and
  • you have your parents’ permission

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What is an ‘insurable interest’?

Most life insurance companies will allow you to insure your parents’ lives on the condition that a financial burden will pass to you upon your parent’s death. This is called an ‘insurable interest’.

Examples of an insurable interest are:

  • the cost of a funeral
  • care home fees
  • medical care fees
  • a long-term debt
  • an unpaid mortgage

And although you, as an adult child, can apply for a life insurance policy for parents, as touched upon above, in addition to having an ‘insurable interest’ you will also need your parent/s signed permission as part of the application process to insure their life/lives.

Can I get life insurance for elderly parents?

Yes, you can get life insurance for dads and mums who are in their twilight years but bear in mind that the older they are, the more expensive the premiums will be - especially if you arrange whole life insurance rather than term life insurance.

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How to arrange life insurance for your parents - 5 steps

1. Have a chat with your parents

Check if your parents have any existing insurance and if not, discuss your life cover proposal with your parents and seek their permission to proceed with an application. If you’re not aware of whether or not your parents have written a Will, now would be a good time to discuss this with them too.

2. Check your parents’ medical records and history

When you apply, you will be asked various questions about your parents’ health and so making sure you have collated this information beforehand - such as what prescription tablets they regularly take and any diagnosed health conditions - will help smooth the application process.

3. Examine your parents’ financial affairs

You will need to ensure you have an ‘insurable interest’ before applying so ask your parents to go through their financial affairs with you and find out what debts or assets they have. An insurer will require evidence that you will suffer financial loss when your parents die by inheriting their debts or by having to pay for their funeral. 

Read more: What happens to our debts when we pass away?

4. Choose the right type of policy

There are two main types of life insurance to choose from: whole life or term life. Whole life insurance is more expensive than term life insurance because it’s guaranteed to pay out at whatever age your parents die. Whereas term life insurance will only pay out if your parents die during the fixed ‘term’ of a policy - i.e. over a certain number of years. Consider what cover you need and what you can afford to pay. It may be that certain debts will be paid off when your parents reach a certain age and you only require cover for a certain number of years. 

Read more: Which life insurance policy should I get?

5. Compare life insurance quotes

Once you’ve got your parents’ permission, have acquired evidence of an ‘insurable interest’ and have thought about what type and level of cover you require, you should then compare quotes for parents’ life insurance online. Make sure you read the small print (i.e. a policy’s terms and conditions) when comparing quotes and perhaps seek quotes for both whole life and term life policies as comparables.

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