Can I Buy Life Insurance for My Parents?

It used to be that your parents worried about your finances as you grew up. But now that you’re an adult and your parents are older and perhaps retired, the roles may be reversed: it’s your turn to fret over their financial wellbeing. Especially if they rely on a fixed income, you’ll want to make sure they protect each other and their family with life insurance.

Here’s the big question: If one parent passes away, will there be enough money for the surviving parent to live on?

If your parents have life insurance policies already, then they can use the benefits to cover final expenses and everyday expenditures. But if they’re not insured, the surviving parent may have trouble covering living expenses and rely on their adult children to make ends meet. That’s not something you or your parents would want to experience. To help your parents settle into retirement and avoid that unfortunate scenario, you can suggest one of three insurance options from Gerber Life for older adults.

Before we go on, let’s answer a frequently asked question: Can you buy life insurance for your parents?

You cannot buy life insurance for just anyone, however, you can buy life insurance for someone else if you have their consent and “insurable interest” – which just means their death would impact you financially. So yes, you can buy life insurance for your parents and be responsible to pay the premiums. (Your parent, whose life is being insured, just needs to consent and sign the application.)

Gerber Life has several options for seniors, depending upon their age.

Life Insurance Policies for Parents

Term Life Insurance:

The Gerber Life Family Plan Term Life insurance plan offers coverage from $100,000 to $2,000,000 for those up to age 70. Depending upon age, the duration (or policy "term") can be for 10, 20 or 30 years. Those who are older ages may want to consider Whole life insurance instead as that provides permanent coverage for a lifetime (assuming premiums are paid of course).

Whole Life Insurance:

Whole life insurance may make more sense for older people since coverage does not end after a certain amount of time (like term life), with whole life you won’t outlive your coverage. While whole life is generally more expensive than term life insurance, there is an added benefit in that it builds cash value over time. Your parents can borrow against the cash value if they need some money quickly. They can also choose to turn in the policy for its cash value. The longer your parents hold the whole life insurance policy, the more cash value it accumulates.

Coverage is available from $50,000 to $1,000,000 up to age 55 (for ages 56-80, coverage is available up to $500,000), and premiums are guaranteed not to increase during the life of the policy. Your parents can apply for the Gerber Life Family Plan Whole Life Policy up to the age of 80. Coverage is dependent upon answers to health questions. For those younger than 55, no medical exam is required. For those over 55, Gerber Life will schedule a simple medical exam where a paramed visits you at your home. Either or both parents may apply for a policy.

Guaranteed Life Insurance:

If your parents are 50+ years old, they’re eligible for the Gerber Life Guaranteed Life Insurance Policy*. It provides between $5,000 and $25,000 in life insurance coverage (for South Dakota residents, the maximum coverage is $15,000). There is no medical exam, and no health questions will be asked. They can’t be turned down for medical reasons because acceptance is guaranteed* regardless of health. And like our whole life insurance plan, it builds cash value over time that your parents can borrow against if there’s a financial need.**

The Guaranteed Life insurance policy can enable your parents to put money aside for funeral or other final expenses and give them comfort in knowing that they’ve made plans to ease the burden for you.

If you have questions, or you’re ready to talk about adult insurance options for your family, call us toll-free at 1-800-503-4480. Our life insurance specialists are here to help.

* To be eligible for coverage you must be a U.S. citizen between 50 and 80 years old (New York residents, maximum age of 75) residing in the US or permanent legal resident. Total limit of all combined Gerber Life Guaranteed Life policies is $25,000. Gerber Life Insurance Company will not issue insurance for any proposed insured when a POA or Guardianship exists on the proposed insured, except legal guardians of children.

** Policy loan interest rate is 8%.  Loans may impact cash value and death benefit.