Yes, you can get life insurance on your parents as long as you have an 'insurable interest', which in insurance terms means that there is a reasonable need to have the insurance in place.
In this article, we'll explain how to get life insurance for your parents, which types of life insurance you should buy and how to get the best and cheapest life insurance in the market. We will also show you how you can get £100 cashback when you buy life insurance.
Reasons for getting life insurance on your parents
A parent's death can give rise to a number of financial concerns that you may wish to pre-empt and address by buying life insurance that will pay a lump sum of money to fund them. Below are some common reasons for buying life insurance for your parents but you may have your own specific reasons too.
- Funeral expenses - funeral costs can be upwards of £4,000
- Inheritance tax - to settle any inheritance tax due if your parents' estate exceeds the thresholds
- Bills and debts - to clear debts/bills after death if there are no assets to fund them or to avoid selling assets to fund them
- Financial loss - any financial loss due to personal or business commitments they had to you
- Medical bills - rare in the UK but to settle any care home or other medical bills
What type of life insurance will cover your parents?
The type of life insurance you choose will depend on what the death benefit is needed for. If life insurance is needed to pay off a loan or mortgage, it will only be needed until it is repaid so a term life insurance policy is usually suitable. On the other hand, funeral expenses and inheritance tax bills will need to be funded whenever your parents die so an Over 50s or Whole of life insurance policy could be more appropriate for their long-term needs. Your parents' age, health and willingness to attend a medical exam can also determine which types of life insurance will be most suitable.
To understand different types of life insurance and their uses read our article, "Types of life insurance explained"
How to get the best and cheapest life insurance on your parents
Worries about covering funeral expenses, bills and taxes when your parents die is quite normal and so is buying life insurance for your parents to gain some peace of mind. However, there are a lot of options to choose from - some of the life insurance companies that run targeted advertising for people later in life don't provide the best value products and services to suit you.
Speaking to a specialist life insurance broker* is the best way to discuss your circumstances, concerns and budget. They will search the market based on these factors as well as your parents' age and any health issues to return the best life insurance company, product and price. If you go ahead with the recommendation, you can receive up to £100 cashback as a Money to the Masses reader.
If a link has an * beside it this means that it is an affiliated link. If you go via the link, Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. This link can be used if you do not wish to help Money to the Masses and do not wish to qualify for the cashback referred to in the article