Do my senior parents need life insurance?

Life insurance for seniors is a complicated subject that can be hard to talk about, but when you break down the steps and the impact, it becomes simpler. Which senior life insurance policy may work for your family is something you and your parents will decide together. But it is important to have that conversation, and to have something in place to help financially when the time comes. 

There are several categories under the umbrella of “life insurance” that can be explored a little further to understand their meaning. But the bottom line is the policy that’s best for your parents and your family is the one that fits their specific needs and budget.

Term life insurance

Term life insurance provides coverage for a specific number of years, which is set by the policy holder. And since the premiums are generally lower than other types of life insurance, term life may be a good choice if budget is a concern. That said, term life insurance policies may not be renewable after a certain age and may not be available to applicants over a certain age. While some term policies offer coverage past age 80, many end earlier and may cost so much that they don’t make financial sense.

Whole life insurance

Whole life insurance for senior citizens is designed to help protect a family’s finances when the covered person passes away. Applying for whole life coverage may involve health questions or a medical exam before a policy is approved. Then, as long as the payments are made on time, the insurance will not be cancelled. When the covered person dies, the payout can be used to cover funeral and burial expenses, medical bills and other expenses.

Whole life insurance may also build cash value over time. If enough cash value has been built up, your parents may be able to borrow money from that policy and use it toward retirement, family emergencies or other expenses. If they do this, though, that loan will have to be repaid. The insurance company will add that interest payment to the regular payment for the insurance (the premium). If the loan is repaid, the amount of money you and your loved ones receive is unchanged. But if your parents still owe money to the policy at the time of their death, it will be subtracted from the amount you and your loved ones receive. There are also options to cash out all or some of the cash value of a policy.

Funeral insurance, preplanning insurance or final expense insurance

Funeral insurance is a specific kind of life insurance that allows the insured person to preplan and prepay for their funeral. The benefit of this type of insurance is that your parent can choose exactly what they want for their funeral and help fund it now. Another option is final expense insurance, which means your parent can set aside money specifically for their funeral expenses. Both of these choices may help reduce the financial burden a family could face when a loved one dies.

Guaranteed acceptance life insurance

Guaranteed acceptance whole life insurance, or GAWL, is similar to a whole life policy, but with GAWL, you cannot be turned down for health reasons. Coverage will not decrease, and the policy won’t be cancelled as long as payments are made. And because coverage is guaranteed, there are no health questions or medical exams. If you’re looking for life insurance for elderly parents with health issues, guaranteed acceptance life insurance might be a good fit.

Can you get life insurance on an elderly parent?

Yes, if the proper steps are taken. The first thing to evaluate as you review your options is if, when your parent dies, you will be the person responsible for end-of-life expenses, debts, dependents and any other financial obligations.

Next, the value of the life insurance policy you are applying for will depend on the amount of coverage needed to cover expenses at the time of their death. But what if there are dependents? Expenses that aren’t covered? A calculator will help you determine how much life insurance is needed.

And finally, your parent would have to give consent. A parent needs to be aware and understand that you’re taking out a policy on them. TruStage™ offers helpful information about getting life insurance on a parent.

Find the life insurance policy that could be right for you and your family today. Start by exploring whole life insurance policies and GAWL insurance policies. Then, get a quote from TruStage. The process only takes a few minutes and could help you meet the needs of your family today and in the future.