Once your parents reach a certain age, you may want to find a life insurance policy that will accomplish two specific goals- cover your parents’ final expenses and provide for the surviving spouse if one of them passes away.
Protecting Your Parents
When your parents get older, it is up to you to protect their interests. With the right type of life insurance in place, you can ensure that your parents have the protection they need. If one of your parents passes away, the death benefit will allow you to provide your surviving parent with the care they need.
The next step is to determine if they are eligible for the type of policy that you want them to have. You will also have to make sure that your parents will allow you to purchase a policy on their behalf. While you have the right to protect yourself, your parents must retain the right to care for themselves for as long as they are capable of doing so. Your parents have the right to choose their own beneficiary and the type of policy they are comfortable with. They may already have a life insurance policy in place.
Which Type of Policy Is the Best?
Once your parents reach a certain age, a whole life policy is really no longer necessary. A term life policy may be in their best interest, especially if the policy is going to be used to pay for their final expenses. Understanding your parents’ needs will go a long way in helping you figure out which type of policy will guarantee that all of their goals are being met, both before and after they pass away. Your insurance provider can guide you through the process and make sure your parents have the type of insurance they want and need.
When Should You Buy the Policy?
Understanding when to buy a policy for your parents is important. Buying it as soon as you can is important. The earlier you can purchase the policy, the more benefits your parents will be able to take advantage of. Discuss with your parents to determine what type of policy they will need help with to speed up the process. Buying your policy while your parents are still young enough to establish some type of equity is important if you want them to be able to utilize any benefit they would receive.
Tax Considerations to Be Aware Of
Buying certain types of insurance policies also offer tax considerations that may benefit both your parents and you as their beneficiary. Getting involved with the tax aspect of a life insurance policy can be confusing. Take advantage of the information you can gain from your insurance agent. They know how to explain the tax laws and how they will affect you and your parents when the policy is cashed out, or a death benefit is paid.
Call our agents at Udell Family Insurance to find out everything you need to understand about life insurance, how it works, and how it will impact your parents. Contact us today and schedule a consultation to get started on a customized policy today!