As you consider your life insurance needs, you may have a different scenario if you have senior dependents.
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Most people calculate life insurance based on their family life – kids and a spouse. They figure it based on their mortgage term and amount, what kids might need (college, medical expenses, etc.), and how much a spouse might need if they died prematurely.
But what happens if you suddenly have to care for your aging parents or grandparents and are financially responsible for them? You may need more life insurance.
Here’s what to consider.
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How Much are their Medical Costs?
If you’re caring for aging parents, they likely have medical costs. Determine the annual cost and multiply it by the number of years you anticipate they’ll live. Then, if you die prematurely, you’ll have peace of mind knowing that your parents have enough money to cover their medical concerns.
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This might be hard to figure out, but base it on the average life expectancy for a person in their situation. Their doctor may even help you determine how their medical concerns affect their life expectancy.
What do your Parents Need?
Would they need a full-time caregiver? If so, figure out the average cost of a full-time caregiver in your area that provides what your parents need.
Think of other factors they may need, including:
- Food preparation services
- House cleaning services
- Help with shopping
Determine the average cost for any professionals your parents or a loved one would have to hire for them. Then, you can increase your life insurance coverage to ensure they have enough money to handle these issues upon your death.
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Do you Have a Mortgage?
If your parents live with you and you have a mortgage, you should include enough money in your life insurance policy to pay off the mortgage.
This ensures your parents can remain living in your home and can hire the proper care to replace the duties you did if your family members can’t.
Look at how long you have left on your mortgage and the balance outstanding. This can help determine how much you should add to your life insurance coverage to ensure your parents’ financial peace.
Who Else Depends on You?
Taking care of your parents is one piece of the puzzle when determining how much life insurance you need. Also, consider your other dependents and/or needs.
For example, if you’re married, consider your spouse’s financial needs so he/she can continue living the lifestyle they’re used to. You should also consider coverage if you still have kids at home. You may want coverage for their living expenses and to pay for college.
Consider your aging parents in your life insurance calculations if you care for them now. Whether they live with you or you are financially responsible for them living elsewhere, they’ll need protection. There’s no guarantee you will outlive your parents, so ensuring you have enough coverage to protect them and your other dependents is essential.
If you aren’t sure how much insurance you need, contact your insurance agent to discuss your needs. Talk about all aspects of what you want to cover before your death. It’s not pleasant to think about dying before your parents or leaving behind your children, but preparation is key to ensuring everyone is protected.