Been wondering if you can take out life insurance for your parents? You can – and there are two ways to do it.
A life insurance policy can go way a long way towards offering financial support to the policyholder's loved ones after their passing. The payout can be used to cover various expenses such as outstanding debts and everyday living expenses. If you’d like your parents to enjoy the peace of mind that comes with having a life insurance policy, there are two ways to go about it.
Life Insurance For Your Parents Made Simple
The first and most straight forward is to encourage them to take out a policy on their own accord. Just keep in mind that most insurers have an age limit due to the fact that, the older people get, the higher their risk of developing a health condition. For this reason, most insurers set the limit at 65. If your parents are younger than that, they’ll be in a good position to apply for life insurance.
Alternatively, you can take out life insurance on behalf of your parents. It’s not unusual to have one person as the policyholder and another person pay for the premiums. However, in this case, you’d have to demonstrate insurable interest. This means that you (the premium payer) would have to prove that should the life assured pass away, you would suffer financial consequences as a result of their death. Simply put, if your parents support you financially in any way, be it helping you pay for your further education or providing you with free-childcare by looking after your children, you’ve got insurable interest.
Paying Your Parents Life Insurance Premiums
If you’ve decided to pay for your parents life insurance premiums – good on you. But there are two things to keep in mind. The first is that, even if you’re the one paying for their policy, they’re not obligated to list you as a beneficiary of the policy. The beneficiaries are the people who receive the pay out in the event of the life insured’s passing. This decision will always be up to the policy holder, regardless of who’s paying.
Lastly, remember that being the premium payer is a big responsibility. If you miss a payment, the policy will lapse and any premiums you’ve already paid won’t be refunded.
The Bottom Line
Having a life insurance policy can provide your family with peace of mind, knowing their financial security is supported. If you’ve been thinking about taking out a policy on your parents behalf – or wish to encourage them to do so themselves – don’t wait until it’s too late. Get a quick quote from MiWayLife online and let us impress you with our professionalism and surprisingly low premiums.
