Find The Best Life Insurance for Parents that Are Elderly &
Life Insurance for Young Parents
If you’re looking for the best life insurance policy for parents you aren’t alone. But you should be aware that the best life insurance for young parents may not be the same as for older parents.
Sadly far too many people don’t buy life insurance when it’s cheap and easy.
The older we get the closer to death so obviously underwriters penalize us. That’s why I encourage all of my clients to pull the trigger on a life insurance policy when they first start to think it’s necessary.
So let’s take a peek at what you need to know if you’re buying a policy for your parents now!
A survey released Thursday commissioned by Royal Bank of Canada found that 96 per cent of parents were subsidizing children aged 18 to 35 and 48 per cent were still helping kids age 30 to 35. RBC raises the question of whether parents are helping their kids with money that should be going into their retirement saving, which is valid.
Reasons You Need the Best Life Insurance Policy for Parents & How to Get It
OK, James, I like your articles - but seriously are you trying to sell life insurance to my parents? Sounds a little fishy my friend!
I could see how you might feel this way, but nothing could be further from the truth! Buying a life insurance policy for parents is something that you may actually have to consider at some point unless your parents planned ahead.
Even if they planned ahead it still may be a perfect fit. So let's go through some of the best reasons right now:
Life insurance is a great tool! It provides you with a safety net to protect the people you care about from the financial devastation that a death can cause. Too many assume life insurance s for young parents.
While this is the norm, there are a lot of exceptions to this rule and finding the best life insurance policy for parents that are elderly is definitely one.
So let’s check out the many reasons your parents may need coverage in their later years right now:
A Second or Third Career
People are living longer AND working harder. Retirement isn’t what it used to be.
I have many clients who opt to start businesses they dreamed of later in life. When you have kids it can be tough to take chances. That’s why that government position with benefits looks pretty damned good when you’re raising your family.
Hey, you even get paid time off.
That being said, when your children fly the coop everything changes. You no longer have all the responsibility you once had.
If you launch a business because you’re an entrepreneurial spirit, you take on a lot of responsibilities. Maybe you have a loan, employ people, maintain a lease or have a partner. No matter how you slice and dice it chances are you have financial obligations.
A life insurance policy can protect your loves ones and business associates from damage if you die unexpectedly. This is a VERY good reason to take out a life insurance policy, in fact, many banks require it as collateral for a loan.
A Second Family
Divorce is common and sometimes people start a second family. If that’s the case, maybe your parents have younger children they want to take care of.
Often people who are involved in second marriages want to make sure all their children are acknowledged when they move on to the pearly gates. Life insurance is a good way to adjust any inequity.
This approach can also be used to protect a new wife or husband in case you pass away unexpectedly.
Everyone wants to pass on an inheritance to their family. It’s one of those things we all dream of.
Life insurance is a terrific tool to achieve this goal. If you happen to have money, you can use a life insurance policy to take care of taxes, leave money to your favourite charity and/or preserve your wealth for the next generation.
Another great trick if you are looking for the best life insurance policy for parents, is to encourage them to purchase a joint last to die policy to take care of any liabilities they might have.
Once they purchase this policy the growth isn’t taxed and the payout goes to their beneficiaries tax-free!
This is an excellent tool if you have a cottage that you want to keep in the family. A medium-sized cash value life insurance policy can take care of any capital gains tax due on the cottage.
It’s nice to know a family tradition will continue when you’re long gone.
OK so the will is done and you’re kids are taken care of, but life has really changed since then.
You have grandchildren now and they are growing up fast. You’d love to leave them something but you’re not sure where it’s going to come from.
Maybe you want to help them get through university or just simply give them a bit of a head start. A life insurance policy is perfect for this.
You can purchase a small permanent policy that gives them a nice chunk of change to let them know you’re thinking of them.
If you pay up the policy in a shorter period of time (ie. 8- 20 years), the total cost of the life insurance will be a lot lower.
Also, you’ll buy more time for the cash in the policy to grow and compound. It could end up being quite a nice little nest egg. Thanks, Grandpa and Grandma!
Funerals are VERY expensive. I think this is one of the most underestimated costs people encounter.
If you don’t plan for your burial, the bill will be left to your family – and when you’re talking about $10 – $20K it can be a real financial setback.
So if you’re looking for the best life insurance policy for parents you may want to buy a small permanent plan that will cover these funeral costs. For approximately $75 per month, a healthy 60-year-old male, non-smoker, can buy a $25,000 life insurance burial policy.
Many carriers offer smaller amounts of coverage all the way down to $5000. After all, some protection is better than none.
Types of Life Insurance Available for Your Parents
Now that you know some reasons you may need the best life insurance for parents, let’s consider what sort of products they have at their disposal.
Of course, term life insurance is the best-known type of coverage.
You pick a period of time you need protection, a dollar figure that works for your situation and pay a premium that’s guaranteed to remain level for that term. It’s a great way to go and if you’re young it’s really cheap.
Life Insurance Gets More Expensive as You Age
The problem is as you get older your term premiums are more expensive. It makes sense because you’re a much higher risk to insure as the likelihood of dying during your term rises.
This is one of the reasons term insurance won’t necessarily work for your parents as they get into their late 60’s and 70’s.
There’s a point where it becomes really costly and permanent insurance becomes more viable. Not to mention, you’re left with nothing if you survive your term (…and that should always be your goal).
Short term coverage for 10 years or less may still work to cover a loan or something but you really have to do the math. Even then it depends on how old you are as specific insurance terms aren’t available beyond certain ages.
For more about this, check out my post on term life insurance for senior citizens.
Life Insurance Coverage Until You Die
Which brings me to permanent insurance. This coverage lasts until the day you die….but as you can imagine the premiums are substantially higher.
However, if you’re looking to benefit a family member financially this is a good choice because as long as you’re paying your premium, they are guaranteed to receive a tax-free lump sum.
If your parents happen to have any medical conditions, a simplified-issue or no medical exam policy is the way to go. These policies are also an excellent way to cover funeral costs.
However, individuals who have health issues do have options for securing life insurance coverage. Life insurance with no medical exam can be a smart choice for those who might not otherwise qualify for coverage. It is important, though, to consider how these types of policies work, the strength of the insurance company offering coverage, the cost of coverage, and the length of time the coverage is in place before accepting a new policy.
The Best Life Insurance for Young Parents
If you’re looking for the best life insurance for young parents, there are a lot more options open to you and reasons to get life insurance.
The good news is, life insurance is super affordable when you are fit and healthy. Yes indeed!
So let’s say you’re in your 20’s and have kids. A 30 year term policy covers you through all your most vulnerable years.
Why You Should Contact Policy Architects If You're Looking for
the Best Life Insurance Policy for Parents!
So if you’re looking for the best life insurance policy for parents OR life insurance for young parents…
…my best advice is to give Policy Architects a call.
We have all the information you need. Every single case is very different so there’s no way for me to give generalized advice for elderly or young parents looking for life insurance coverage.
It all depends on your financial situation, medical condition and the period of time and amount of coverage you need. These variables radically change the advice I’d give you.
One thing I want to stress however is if you:
- have debt,
- want to help your loved ones cover your funeral and/or financial obligations, or
- simply want to leave some cash to people you care about
….Life insurance is an awesome tool.
The key is to ALWAYS speak to an independent agent. There are tons of creative ways to address personal circumstances.