Buying Life Insurance for Parents: a Little Know-How
Life insurance is a practical way to plan for life’s changes. However, when it comes to senior citizens or one’s parents paying for this insurance, this practicality can be seen as a financial burden. Many children in turn, end up buying life insurance for parents.
Especially if parents are under 75 years of age, and have no serious health problems, life insurance can be a way for parents to leave a legacy to their adult children. In any case, when purchasing a life insurance policy, it is important to structure the policy appropriately and apply for a modest coverage amount.
A few tips when choosing insurance for parents :
- Policy ownership is important – Typically, the insurance policy owner and the person who pays the premium are insured. If you just manage the policy and your parents actually own and pay for it, you have nothing to worry about.
However, if you plan to pay the premiums and take the insurance ownership from your parents, you need to prove that you have an insurable interest. This means that you will need to document why you need the life insurance coverage for your parents. Most people give reasons such as paying off a loan or for estate planning.
- Avoid Buying too much insurance – The life insurance must be in line with the insurable interest. Unless the amount of coverage is justified, be prepared for the underwriters to ask for financial statements, etc. Avoid complications and opt for modest coverage.
- Opt for Affordable Insurance – Make sure that you can comfortably afford the insurance premiums.
Apart from the above, the insurance advisers at Choice Plus Benefits are always ready to answer any query that you might have. You can rely on us to help you choose the best insurance and investment solution, as per your unique situation.