While your parents will have to take out a policy in their own name, we do make provision for you to cover extended family for funeral expenses under your life cover.
On top of that MiWayLife understands that each family’s financial situation is unique – so it is possible for you to pay the premiums for your parents on their life policy.
How to make sure your parents are covered
When someone takes out a life insurance policy, they are referred to as the ‘policyholder.’ The person whose life is covered by the policy is the ‘life assured’ – so should that person pass away, the named beneficiaries can claim from the life insurance provider.
MiWayLife requires that the policyholder and the life assured be the same person; so you can only insure your own life.
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However, you can have one person as the policyholder and have a different person pay the premiums, as long as the premium-payer has an insurable interest. What does that mean? You (as the premium-payer) have to demonstrate that should the life assured pass away, you would suffer financial consequences or hardship as a result of their death.
In the case of parents, a child could offer to be the premium-payer for their mother or father. The mother or father can then name the child as a beneficiary on the policy. The beneficiaries are the people that the policyholder chooses to receive the payout after their death.
It’s important to remember that while your parents could easily name you, the premium-payer as the sole beneficiary on their life insurance, they are not under any obligation to do this. Essentially, paying premiums for someone does not entitle you to any payout from the life insurance should they pass away unless you are named as a beneficiary on the policy.
Why should you encourage your parents to take life insurance?
If you are financially dependent on your parents, then losing one or both will mean that you suffer negative financial consequences. This could be because their income helps to support you, they pay for school or university fees or perhaps because you still live in their house. By taking life insurance out on your parents, you can protect yourself against financial hardship should they pass away.
The life insurance could cover the remainder of payments on the house, make provision for you to continue studying or pay for estate taxes if your parents are wealthy and own expensive real estate.
If you are financially self-sufficient but you have concerns around funeral and burial costs should your parents pass away, then remember that our life policy allows you to cover your extended family as standard - so you can make provision for funeral costs for your loved ones without the need for multiple separate policies.
Decide on the best cover
You will want to work on the policy with your parents when gathering documents, financial records and deciding between term insurance or whole life insurance. Term insurance covers your parent for a set period, while life insurance covers for their entire life. There are certain aspects that can impact on premiums, such as the health and age of your parents.
Each family dynamic and situation is unique, which is why we suggest contacting us directly for a quote in order to find the best amount of coverage for your needs.
MiWayLife believes in offering the best deal for you, without the need for invasive medical tests. We can be trusted to give you the best policy to suit your needs.
