Can you get life insurance on your parents?

Yes, with their consent. In order to take out a life insurance policy on a parent or anyone else, you’ll need some of their information, their signature, and if you want to own the policy, proof that you will be financially impacted by their death.

Senior woman and adult daughter laughing on porch

Taking a life insurance policy out on your parents

Life insurance is an essential part of a family’s financial safety net. The right one can ensure yours is well protected and give peace of mind after a loved one is gone. It’s not uncommon for children to hold a policy for one of both of their parents. Dealing with final expenses, paying down debt, and covering end-of-life medical costs are all important reasons to consider taking this step.

Broaching this conversation with your loved ones isn’t always easy, but it’s something you simply cannot afford to put off. Setting time to talk about these issues is important for every family.

As you begin to shop for a policy, you will need important information and consent from your parent. For that reason, you should work together when applying for a life insurance policy. Here’s what you need to know:

What information will I need?

To take a life insurance policy out on your parents, you’ll need to fill out an application. That will include some sensitive identification information like their Social Security number. It will also likely have a health questionnaire with important questions about height, weight, lifestyle habits, and medical history. Depending on the type of policy you get, your parent may also need to take a medical exam. 

Who owns the policy? 

Either the insured or a beneficiary can own the policy and the policy owner does not necessarily have to be the one who pays the premium. For example, if your parent is on a limited income, they could own the policy while you handle the monthly payment. As long as you’re listed as the beneficiary, you’ll receive the benefits when they pass.

In order to own the policy as a beneficiary, you will need to prove you have insurable interest. That means you will have to show that you would be financially impacted by the insured person’s death. This is usually fairly easy when trying to insure a parent. For example, if you rely on income from the deceased to pay rent, or if they have a mortgage or medical bills that will need to be paid after they’re gone.

Can you take out a life insurance policy without someone’s knowledge?

No. The insured person has to provide consent and a signature, so there is no way you can take out a policy on anyone without them knowing. This should go without saying but forging a signature will void the life insurance policy and is also a punishable crime. 

Why should I get life insurance for my parents?

If your family is stable and won’t be financially affected by a parent’s death, then you likely don’t need to take a policy out on your parent. However, there are a lot of end-of-life costs to take into consideration when deciding.  It’s not uncommon for someone to leave behind debts and other bills that the family must deal with when they pass. Here are some of the most common:

Funeral Costs

Funeral and final expenses can cost $10,000 or more. If your family doesn’t have a plan for or hasn’t already pre-paid these costs, then a small life insurance policy on your parent can help ensure you don’t incur extra debt during a difficult time.

Related: Final Expense Insurance

Medical Bills

Many of our parents will likely have health issues at the end of their life and medical bills can add up quickly. Some should be covered by Medicare or health insurance, but not all of the costs will be. It’s impossible to predict how much this could amount to, and we’ve all heard stories of people racking up thousands of dollars or more in medical bills before they die. A life insurance policy on your parent can help prevent financial strain and difficult negotiations with hospitals about these costs. 

Other debt

Your parent may have outstanding debt, and certain types can transfer down to children when someone passes on. In addition, if they have not paid off their home mortgage or have borrowed against it, that could prevent the family from inheriting a cherished home. Having a life insurance policy to cover these debts can ensure that a parent doesn’t leave a burdensome financial legacy for their family.

Relocating a Surviving Parent

If one parent dies, it’s sometimes necessary to rehome their spouse, either with other family members or in an assisted living situation. Moving and facility costs may be beyond the family’s reach. A life insurance policy can help make sure this transition goes smoothly and debt free.

What type of life insurance should I take out on my parents?

There are many different kinds of policies that are meant to cover different situations. Each family will have unique needs, so it’s important to understand all of your options. A life insurance policy for your parent that covers a small amount, say less than $50,000, is fairly easy to get. If you want to take out a life insurance policy on a parent with a higher value, you might have to do a little more work to prove your insurable interest in the policy. Here are some things you will want to take into consideration while looking:

Limited term vs. whole life

Limited term life insurance is designed to cover a set period of time, often between 5 and 30 years. After the time is up the policy simply ends, and benefits will not be paid. Because of this, term policies are generally used to cover specific needs that will change with time, like a mortgage or income replacement.

Whole life insurance, on the other hand, never expires as long as the premium is paid when due. The drawback is that the premiums are often higher than term insurance. Many people choose whole life insurance for their parents when they need a smaller amount to cover end-of-life expenses or other debts.

Do they have to take an exam?

There are some types of guaranteed and simplified life insurance policies that do not require a medical exam. They will likely still include a health questionnaire, however, and premiums tend to be higher. If your parent can take a medical exam, that is usually a better solution financially.

Related: Life insurance without a medical exam

Take the next step

If you would like to explore your options for life insurance, either for yourself or for a loved one, an experienced life insurance agent is your best option. They can help fully examine your unique circumstances and help you customize a plan to ensure your family is protected now, and in the future.


Want to learn more about life insurance?

A New York Life financial professional can help determine what’s right for you.