Not only will you realise how your parents have aged every time you visit them, but you may begin to wonder how you can take care of them financially.
While it is possible to take out life insurance for your parents, there are a few things to keep in mind to make the process a smooth one. Here is what you need to know when taking out life insurance cover for your parents.
Can I cover my parents with my policy?
The short answer to this is that you can cover your parents with your policy. Insurers give you the choice to cover your parents or your spouse’s parents, if you are married, to protect them financially. You can also cover eight wider family members under your policy. However, when it comes to taking out a separate policy where your parents are the policyholder this could be slightly different.
Taking out cover for your parents
It comes down to insurable interest. This means that you will have to show that you will suffer some sort of financial loss when your parents die. This could be in the form of having to take care of any debt your parents might have, paying off their bond, or any other final expenses that could cause you financial loss. You will need to choose an amount that will adequately cover them and their needs. Speaking to an insurer will let you know if the cover amount you are taking will adequately cover them.
The benefits of covering your parents
Knowing the benefits that come with taking out a cover that will protect your parent’s financial future and all that they have worked for is vital. This can help you find a cover that will work for you and them. Some of the benefits that come with taking out cover for your parents is:
Covering funeral expenses when they die. Most policies come with a built-in funeral policy that can ease the financial stress, so you can focus on a dignified funeral.
It can act as income for your siblings, extended family members, or spouse who may rely on them financially.
Take care of any debt that your parents may leave behind. This can save you from out of pocket expenses and give you peace of mind that their debt will be covered.
It can cover medical expenses or other expenses that your parents could accumulate should they fall terminally ill. They will be given the option to take out 50% - 100% of their cover amount to use as they see fit.
It is important to remember that before you take out a cover for your parents that you get their consent so that they are aware of it. Helping a trusted friend or family member on how to process a claim is equally important as it will make the process smoother for them. Remember to compare and check if you will be able to afford the premiums that come with your cover.