When parents get older, the concern their children have for their wellbeing grows by the day. This is especially true for retired and aging parents who are living on a fixed income. Children want their parents to be protected as much as possible, which is why obtaining life insurance offers a hedge against the financial burdens that come with an unexpected passing.
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When it comes to obtaining life insurance for parents over 60, there are many considerations that will need to be made in order to get the best policy. One of the more important factors is the overall cost of the insurance plan that is selected.
How Affordable is Life Insurance for Parents over 60?
The answer to the question will depend on a number of factors starting with the amount of coverage that you want to purchase. Life insurance costs rise in accordance to how large the benefit package will be, so for example a plan that only covers funeral costs will be less expensive than one offers a larger amount. When it comes to affordability in terms of benefits, there are other factors to consider as well.
Age: Generally speaking, life insurance is less expensive for parents who have just turned 60 years old as compared to 70 years old. This is because the risk factors are statistically lower for younger people.
Health: The better the health of those being covered, the lower the insurance rates will be. In order to qualify for a life insurance policy, those who are covered need to undergo a health examination or must be asked questions about their health and habits such as if they smoke cigar for example. However, it must be noted that most active seniors are in generally good health even if they take prescription medication for certain conditions.
You will need to obtain life insurance quotes for parents so that you can choose the best policy that fits your budget and covers the expenses as well.
What Type of Coverage to Choose?
One of the most important questions about obtaining life insurance for elderly parents over 60 is the type of coverage that you choose. You will need to know about the major types of insurance that are available, their benefits and costs as well as any limitations.
Whole: Whole life insurance is coverage designed to last for many years. In addition, the premiums that are paid will collect interest over time which means that at a pre-designated point the person insured will be able to cash out the policy at a profit.
However, whole life is really designed for younger people who often use this form of life insurance as savings for their retirement. By the time a person reaches 60 years old, obtaining a whole life policy may be impractical as the costs will far outweigh the benefits.
Term: This is the most common form of life insurance for seniors as it is less expensive than whole life while proving many of the same benefits. A term life insurance policy for the elderly parents consists of coverage that will last for a pre-determined amount of time. Generally speaking, term life policy will last from 10 to 30 years depending on the policy and age of the parents.
The downside is that the coverage will run out at a pre-determined point and there is no cash-out feature as with whole life. However, term life insurance is significantly less expensive and easier to maintain. For example, a term life insurance policy of $100,000 may be 25% less than a whole life insurance policy of the same value.
Simplified or No Exam: This is a type of life insurance that requires no medical examination, but only a few health questions. Simplified life insurance is a very popular type of policy of elderly parents as they are not subject to the hassle of having a medical exam and only need to answer a few questions about their overall health and wellbeing. However, this form of life insurance is significantly higher than one that requires a medical exam.
Guaranteed: If your parents are under the maximum age for this type of policy, then they will not be asked any health questions or undergo an exam and will be accepted. However, this is the most expensive form of life insurance available.
When considering the right policy for your parents, you will need to take into account all the factors that go into purchasing the best life insurance for their needs.
Do I Need Consent from My Parents?
Yes, you will need their consent even if you get guaranteed life insurance because they will have to sign off on the policy itself. So, to convince parents for life coverage you will need to bring them into the process and discuss what is needed in case the worst should happen.
Whether you are getting life insurance for mother or perhaps life insurance for father, their input and permission on what type of policy is best. After all, your parents are concerned about being a financial burden to you and their grandchildren when they pass away. So, they should be very interested in having the type of policy that will provide financial relief.
How Much Life Insurance to Buy for Elderly Parents?
The amount of life insurance for parents over 60 that you purchase should fit the type of financial burden that is created if they should pass away unexpectedly. At the very least, you should purchase burial insurance for parents to cover all funeral expenses which average around $9,000.
However, you may want more coverage if there are other debts or financial burdens that will need to be covered as well. In fact, you can adjust the benefit amount to act as an emergency after retirement plan for parents so that whatever financial burdens they leave behind are covered. Plus, you can actually add to the amount which may provide a legacy for grandchildren going to college or even your own retirement.
When your parents reach the age of 60, it will be time to talk to them about the right life insurance policy which will help bring a little peace of mind for both you and your parents.