Can I Buy Life Insurance for My Parents?

Life insurance can be a practical way to manage end-of-life expenses and reduce financial stress on loved ones. If your parents are over 70, you may be wondering if it’s possible—or worthwhile—to purchase a life insurance policy for them.

The short answer is yes, but there are some key factors to consider. Your parent’s health, the type of policy, and your budget all play a role. Here’s what to know about buying life insurance for a parent in their 70s and how to choose the right plan.

Can You Take Out a Life Insurance Policy on a Parent?

Yes, but only with their full knowledge and consent. Insurance companies have two main requirements:

1. You Need Their Consent

You cannot purchase life insurance for someone without their agreement. Your parent must:

• Sign the application.
• Answer medical questions, if required.
• Undergo a medical exam, depending on the policy type.

2. You Must Have an Insurable Interest

This means you must show that your parent’s passing would result in financial loss for you. Common examples include:

• Covering funeral and burial expenses.
• Paying off their medical bills or credit card debt.
• Providing ongoing support for a surviving spouse or dependent.

Once these conditions are met, you can move forward with selecting a policy and handling the payments.

Why Take Out Life Insurance on a Parent?

Not every family needs life insurance for a parent, but in many cases, it’s a smart and responsible step. Common reasons include:

Funeral Costs

Funerals in the U.S. can cost between $8,000 and $12,000. Even a small policy can help prevent the need to borrow or go into debt.

Medical Bills

End-of-life medical care, even with Medicare or private insurance, often results in significant out-of-pocket expenses. Life insurance can help cover those final bills.

Outstanding Debts

If your parent dies with credit card balances, car loans, or a reverse mortgage, these debts could affect their estate. Insurance proceeds can help settle them.

Supporting a Surviving Spouse

The surviving parent may need funds for relocating, hiring care, or moving into assisted living. Life insurance can offer financial flexibility.

Types of Life Insurance for Parents Over 70

Several types of life insurance are available for people over 70, though not all policies are equally accessible or affordable. Here are the most common options:

Final Expense Insurance

Also known as burial insurance, this is a type of whole life policy with a small death benefit — typically $5,000 to $50,000.

• No medical exam required.
• Approval is usually quick.
• Premiums are fixed for life.
• Designed to cover funeral costs and small debts.

Term Life Insurance

This policy provides coverage for a set period, such as 10 or 15 years. If the insured passes away during that term, the death benefit is paid out.

• Offers higher coverage (e.g., $100,000+).
• Often more affordable than whole life insurance.
• May require a medical exam or health screening.
• Coverage ends when the term expires.

Whole Life Insurance

Whole life insurance offers permanent coverage and builds cash value over time.

• Premiums are locked in for life.
• Policies accumulate cash value that can be borrowed against.
• Medical underwriting is often required.
• More expensive than term or final expense coverage.

Guaranteed Issue Life Insurance

This policy does not require any medical exams or health questions. Approval is guaranteed.

• Coverage typically ranges from $5,000 to $25,000.
• Most policies have a waiting period of two years before full benefits apply.
• Premiums are high relative to coverage amounts.

How Much Does Life Insurance for Parents Over 70 Cost?

Premiums for seniors are higher than for younger adults, largely due to age and health risk. Here’s what you might expect to pay:

Policy Type	Coverage Amount	Average Monthly Premium (Age 70, Non-Smoker)
Final Expense Insurance	$10,000 – $25,000	$50 – $150
Term Life (10-15 years)	$100,000 – $500,000	$100 – $400
Whole Life Insurance	$25,000 – $100,000	$200 – $600
Guaranteed Issue Insurance	$5,000 – $25,000	$80 – $250

Factors That Affect Life Insurance Premiums

Several elements influence the cost of a policy, including:

• Age: Premiums increase with age.
• Health Condition: Chronic illnesses like diabetes or heart disease may raise costs.
• Smoking Status: Smokers often pay significantly more.
• Policy Type: Term policies are usually cheaper than whole life. Guaranteed issue is often the most expensive per dollar of coverage.
• Coverage Amount: More coverage equals higher premiums.

Planning ahead and applying early can help reduce premium costs.

Do They Have to Take a Medical Exam?

Not always. Many policies offer simplified underwriting, which means your parent only needs to answer health questions. Guaranteed issue policies don’t require any health information at all.

If your parents are in good health and agree to take a medical exam, they may qualify for lower premiums and better benefits.

How to Choose the Best Life Insurance for Your Parents

Choosing the right policy involves reviewing your parent’s needs, their health, and what your budget allows.

1. Assess Their Coverage Needs

Before choosing a policy, consider what expenses need to be covered. Common financial needs include:

• Funeral and Burial Costs – The average funeral costs $7,000 to $12,000. A final expense policy may be enough to cover this.
• Medical Bills – If your parent has outstanding medical expenses, a larger policy might be necessary.
• Outstanding Debts – Credit card balances, personal loans, or mortgage payments may need coverage.
• Financial Support for Dependents – If a surviving spouse or other family members rely on them financially, a higher coverage amount may be beneficial.

2. Compare Policy Options and Providers

Different insurance providers offer varying coverage options, so it’s important to compare:

• Premium Costs – Check monthly or annual premiums for affordability.
• Coverage Limits – Ensure the policy provides enough coverage to meet financial needs.
• Medical Exam Requirements – Determine whether a medical exam is required, as this may impact eligibility and pricing.
• Waiting Periods – Some policies, like guaranteed issue life insurance, have a waiting period before full benefits are paid.

3. Consider Medical Underwriting and Policy Exclusions

• Fully Underwritten Policies – These policies require a medical exam but may offer lower premiums if your parent is in good health.
• Simplified Issue Policies – No medical exam is required, but applicants answer health-related questions.
• Guaranteed Issue Policies – No health questions or exams, but premiums are higher and coverage is limited.
• Exclusions – Check for any restrictions, such as waiting periods or exclusions related to pre-existing conditions.

4. Look for Policies with Living Benefits

Some policies offer features that provide financial flexibility, including:

• Accelerated Death Benefit – Allows policyholders to access a portion of their death benefit if diagnosed with a terminal illness.
• Cash Value Accumulation – Whole life policies build cash value over time, which can be borrowed against if needed.

5. Seek Professional Guidance

If you’re unsure which policy is best, working with an insurance agent or financial advisor can help you navigate the options and find the most cost-effective solution for your parent’s needs.

Choosing the best life insurance policy requires balancing affordability with coverage needs. By assessing financial obligations, comparing policies, and considering health factors, you can make an informed decision.

How to Apply for Life Insurance for Your Parents

Once you’ve chosen a policy, here’s how the application process typically works.

1. Discuss Life Insurance with Your Parents

Before applying, have an open conversation with your parents to:

• Explain the benefits of getting life insurance.
• Address any concerns about costs or medical exams.
• Obtain their consent since they must agree to the policy.
• Collect necessary information, including their health history and financial needs.

2. Compare Quotes from Multiple Insurance Providers

To find the best rates and coverage, research different insurers. Consider:

• Policy Costs – Compare premiums and coverage amounts.
• Medical Requirements – Some insurers require a medical exam, while others offer simplified or guaranteed issue options.
• Waiting Periods – Check if the policy has a waiting period before full benefits are paid.

3. Complete the Application Process

Once you choose a provider, you’ll need to fill out an application. This typically includes:

• Personal Information – Name, age, and other identification details.
• Health History – Depending on the policy, your parent may need to provide medical history or complete a medical exam.
• Financial Information – Insurers may require proof of income or assets for certain policies.

If a medical exam is required, it usually involves:

• Measuring height, weight, and blood pressure.
• Collecting blood and urine samples.
• Answering questions about past and current health conditions.

For no-medical-exam policies, insurers assess risk based on age, smoking status, and basic health questions.

4. Policy Approval and Payment Setup

After submitting the application, the insurance company will:

• Review the application and conduct underwriting.
• Approve or decline coverage based on the risk assessment.
• Provide policy details, including premium amounts and payment options.

Once approved, you’ll need to:

• Set up premium payments (monthly, quarterly, or annually).
• Keep the policy active by making on-time payments.

Alternatives to Life Insurance for Older Parents

If life insurance isn’t practical or affordable, consider these alternatives:

1. Dedicated Savings Account

Set up a high-yield savings account or CD specifically for funeral and related costs. Ensure the account has a named beneficiary for fast access.

2. Prepaid Funeral Plans

Many funeral homes offer plans that let you lock in services and prices ahead of time. This option can help avoid rising costs but may limit flexibility.

3. Payable-on-Death (POD) Account

A POD account lets your parent name a beneficiary to receive the funds upon their death, avoiding probate delays.

4. Life Insurance Settlement

If your parent already owns a life insurance policy they no longer need, they might be able to sell it for a lump sum through a life settlement.

5. Government Benefits

• Social Security offers a small one-time death benefit of $255 to eligible dependents.
• Veterans Affairs (VA) may help cover funeral and burial costs for qualifying veterans.

FAQs

Can I get life insurance for my parent without them knowing?

No. Consent and a signed application are required. Forging a signature is illegal and will void the policy.

What if my parent dies before the waiting period ends on a guaranteed issue policy?

The insurer typically refunds premiums paid—sometimes with interest—but doesn’t pay the full benefit unless the waiting period has passed.

Is there an age limit for buying life insurance?

Most insurers stop offering new policies by age 85. Guaranteed issue options may be available up to age 90.

Will I have to pay taxes on the payout?

Life insurance proceeds are usually tax-free. However, interest earnings or estate taxes might apply in certain cases. Consult a tax advisor.

What if my parent already has a policy?

Check whether it’s active and offers enough coverage. If not, consider increasing it or using a life settlement if the policy is no longer needed.

Conclusion

Purchasing life insurance for a parent over 70 can be a thoughtful and practical way to manage future expenses. While premiums are higher at this age, there are still worthwhile options available—from final expense to guaranteed issue coverage.

Acting early and comparing policies can help secure better rates. And if life insurance isn’t feasible, alternative strategies like prepaid plans or dedicated savings accounts can still provide financial peace of mind.