At some point, we want to protect our parents in the same way that they protected us. Encouraging your parents to take out life cover or taking a policy on their behalf is one of the ways in which you can do this. Here are a few steps to consider when getting life insurance for your parents.
Can you take out a policy for your parents?
The short answer to this is yes. You have the option of taking out a policy on your parent’s behalf or they can choose to take out a policy on their own accord. Keep in mind that insurers generally have an age limit in which you are no longer able to take out a policy due to the health risk that increases with age. Most insurers limit the age to 65 years. It will be difficult to take out a policy after your parents have passed the age of 65 years.
If they have an existing health condition?
Most insurers have a list of pre-existing conditions that they are willing to cover if you disclose them during the underwriting process. Therefore, it is crucial to disclose any pre-existing medical conditions, medical history, and lifestyle choices that can affect your health. Your insurer will inform you if they will be unable to cover you due to a pre-existing medical condition that places you or your parent as a high risk.
How does it work?
If you are taking out a life policy on behalf of your parents, you will have to name them as the policyholder. You will be required to pay the premiums to make sure that the cover is up to date and active.
What is insurable interest?
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.
Additional benefits that cover extended family members
It is possible to get a cover that comes with additional benefits like our cover that gives you the option to cover eight additional family members with a funeral benefit. Extended family members that are 18 years and older will be covered for R50,000.
However, children who are under the age of 6 are covered for R10,000 and children who are 6 years old but under the age of 14 years old are covered for R30, 000. This will differ from insurer to insurer.
How to take out life cover for your parents
Life cover for your parents is like taking life cover for yourself. The devil is in the detail when it comes to purchasing a cover that will give you the best value for your money. Some things to consider when looking for a life cover are:
Discuss it with your parents. While it is a good idea to take out life cover for your parents, it’s equally important to involve them in the process. It will also give them the opportunity to inform their beneficiaries about it so that the payout doesn’t remain unpaid upon their passing.
Know how much life cover you need. Being adequately is just as important. If you are not sure how much life insurance you or your parents might need, you can use our life cover calculator to find out.
Check the benefits. Always read the terms and conditions of any policy to see if it is suitable. Looking at the benefits of the cover can help you see if you will receive more value for your money.
Know who will be paying the premiums. Having a clear understanding of who will pay for the policy can help you avoid any confusion down the line, or even worse, have your claim denied because the premiums were not paid.
At MiWayLife, we aim to make the process of getting life insurance as smooth as possible. Therefore, should you have any questions or would like to purchase a policy that will give you peace of mind, apply for an obligation free quote today and we will give you a call.