Buy life Insurance for parents

Why would anyone wants to buy life insurance for parent?

This is a bit tricky issue to tackle as normally life insurance premium goes up a lot with age, and if they are parents, definitely they would not be young and the premium would be very high as compared with you, the children. So why would any children want to condider buying life insurance for parents?

Let us analyze what might happen if in the unfortunately circumstance that one of both your parents die one day, which is a certainty. There are burial expenses to think of and nowadays, it will not be cheap and if your parents do not have sufficient savings or had some old, still current life insurance policies, you will have to foot the bills. Then there may be debts to settle.

Insurable interest

If you have the funds, you may think buying parents life insurance is just a simple task. Just go get the parents life insurance rates, assess your abilities to pay, and if within your means, just pay the insurance premium. However, there is a very important principle for purchasing life insurance. The person must have an insurable interest, that is, he has to demonstrate that there will be an element of loss if ever the insured person dies. If anyone is allowed to purchase life insurance for any Tom, Dick and Harry, he or she may have an ulterior motive. Buy a huge life insurance, then murder the person and collect the premium. Obviously this would not be fair to the insurance company and if they ever suspect any motives of this sort, they are not going to allow you to purchase the insurance policy.

Demonstrating your need to take care of the burial expenses is sufficient insurable interest, and although we have stated that the older a person, the more expansive the premium. In this particular case, if you are just insuring for the burial expenses, you may purchase a life insurance policy where the sum assured is just sufficient to cover the burial expenses and the premium can be very affordable.