As our parents begin to age, we become concerned with how we will look after them and if they have enough finances to take care of themselves. While your mother or father can take out life insurance under their name there are a few things that need to be considered.
Life insurance comes with an age limit
Most insurers have set the age limit at 65 years old and the minimum age of 18 years old. If your parents decide to take out life insurance once they are over 50 years old, your life insurer will require them to submit their medical history. Keep in mind that life insurance is designed to be suitable for each life stage and creating financial security to help your loved their loved ones.
Who will handle the premiums?
Some of the benefits that come with life insurance that will beneficial for your parents are; accelerated funeral benefits that can also take care of extended family members, cover for terminal illnesses, and the life insurance payout that will take care of their dependant's needs. However, to keep their policy active they will need to pay their premiums. It is important to be clear on who will be paying the premium, especially when they have retired.
How to make sure your parents are covered
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.
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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 the payments on their house, make provision for you to continue studying or pay for estate taxes if your parents own 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 a standard - so you can make provision for funeral costs for your loved ones without the need for multiple or separate policies.
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.
