Can a child buy a funeral life insurance for a parent?

The so called sandwich generation, mostly comprised of baby boomers ages 55 to 65, has found itself caught between aging parents and dependent children. Many of these baby boomers are concerned that their aging parents may not have the resources to take care of final expenses and basic burial costs. Can the child of aging parent take out a life insurance policy on that parent? The answer is simply yes but with some conditions!

The child of a senior must be aware that taking life insurance on a parent must be done with the parent’s consent and awareness. In situations were the child has power of attorney, this consent may still be needed. Besides, since every senior may have a different idea about what they want for burial, it would be important and respectfully to ask them first. Some seniors may just want to be cremated while others want something much more elaborate. You don’t want to buy a life insurance policy only to find out that your parent had written instructions that may be pricier than what you had planned. Another major reason to have your parent involved in the application process is accuracy. You must make sure that all questions in the application have been answered correctly. Parents tend to be a bit secretive about ALL their health conditions and answered no to a health question when it should be yes, could be ground for a rescinded policy or worse, a denied claim. As a child, I am sure you want to help your parent but again, make sure that all questions are answered correctly on the application. If you suspect that an answer should be answered yes, ask your parent if it would be OK to check with their DR.

I also recommend that the policy owner be the child rather than the parent. This would be for two main reasons. One, if your parent becomes unable to think for himself or herself then it can become difficult to make changes to the policy without involving the legal system. If the child is the owner of the policy, changes can be made by the child with, usually, just a phone call. Two, if the policy on the senior is a whole life insurance policy, the cash value in the policy may affect the seniors ability to qualify for certain government benefits or your parent may see his or her benefits reduced.

Please note that, if you are going to get a life insurance on your parent, you should do this as soon as you can but certainly before they reach age 86. At this age and beyond, it seems that it becomes  extremely difficult and expensive to get a life insurance policy. Regardless, Prices can jump significantly from one age bracket to the next so the sooner the better. Make sure that you keep the plan affordable though as you would not want to start a plan only to cancel it a few months later because your budget is too tight. If you cancel the life insurance early, all of your premiums may be lost!

We hope that this brief article has answered your questions and more. As we say in nearly all of our articles, once your parent does get approved and you receive the life insurance (burial or funeral) policy, please review it carefully. You certainly would not want to find out on the day your parent passed away that the policy is not what you expected. Losing a parent is traumatic enough. Be well!