We tend to only think about buying life insurance for ourselves when deciding whether or not we need it. The main reason why people buy life insurance is to protect their loved ones from unexpected financial problems. Besides being able to provide for their families, life insurance also helps protect them from unexpected bills.
Unfortunately, when a parent passes away, the surviving family members often don’t have the resources to handle the various end-of-life expenses that their parents may have left behind. These include funeral expenses and medical bills.
To help ease the financial burden that will inevitably come with the passing of a parent, here are a few steps that you can take to learn how to purchase life insurance for your parents.
Determine The Amount of Coverage
Depending on the service that’s being offered, the average cost of a funeral can be around $9,000. This amount doesn’t cover the additional services that are usually associated with a funeral, such as the use of a funeral home, burial plot purchase, and viewing.
Before you start planning a funeral, it’s important that you gather estimates from various local funeral homes. This will allow you to determine the exact cost of the service and give you an idea of which options are most appropriate for you. You should also add any debts or expenses that your family might have left behind, such as medical bills.
Find the Best Policy
Today, there are various types of life insurance policies that are available. Before you choose a policy, it’s important that you thoroughly research the coverage that’s available to you. Although a monthly plan might be cheaper, it doesn’t mean that it’s the best option for your needs.
Choose Who Will Own and Pay The Policy
In most cases, your parents will need to give their consent to you to purchase a policy. This usually occurs by having them sign the policy application. In other cases, a medical exam is required.
You must also show proof of insurable interest, which is a type of insurance that allows people to benefit from the death of an insured. Usually, family members have an automatic insurable interest.
In addition to proof of insurable interest, some companies also require applicants to take a medical exam to qualify for insurance. These requirements vary depending on the type of insurance that’s being offered. For instance, some companies will allow you to purchase a policy without a medical exam if the health questions on the application are clear.
The circumstances surrounding your parent’s passing will determine who will be the best person to take ownership of the policy. Usually, the person who is paying the insurance premium is the owner of the policy. However, some policies require a specific person to be the owner.
Regardless of who the owner is, it’s important that the policy is easily accessible. Since the person who is handling the policy has to understand their responsibilities, they should be willing to be the point of contact for the insurance company.