Many people ask me if they can obtain life insurance for grandparents.
Yes, you can. Have you ever considered how life insurance could provide financial security for your grandparents and their loved ones? Many life insurance companies have made it easier for grandchildren to buy life insurance from their grandparents. Understanding the key factors in purchasing life insurance for your grandparents. Let’s discuss all the factors related to life insurance for grandparents.
Can You Buy Life Insurance For Grandparents?
The quick answer can be “Yes,” but some important details come with purchasing insurance coverage for grandparent insurance.
The first thing to consider is that something referred to as “insurable interests” must be present between the grandparents who are covered and the person who is the policy’s beneficiary. That means the beneficiary will suffer an economic hardship if the insured parent passes away and they have to pay for funeral costs and other funeral expenses or pay any outstanding debts that they become responsible for.
Life insurance companies demand that an insurable interest exists to stop someone from buying an insurance policy for a grandparent’s passing.
A grandchild who wants to apply for a $400,000 insurance policy on their grandfather who is 75 years old might be seen as a worthwhile investment, however, it’s highly unlikely that an insurance company will accept the application. The grandchild will need to show that their grandfather’s death did create a financial burden that demanded that much insurance for example, if the two were business partners, or the amount of insurance required to pay estate tax.
In the second instance, if you’re planning to purchase life insurance for grandparents on behalf of the grandparent you love, then they need to know that you’re putting the policy. The life insurance application must be completed by your grandparent either verbally, physically or electronically.
Types of life insurance policies for grandparents:
“Life insurance” is a general phrase. Various types of policies for life operate differently and are designed to satisfy specific requirements.
One method to help you choose the best kind of insurance can be to consider asking yourself “What do you think the death benefit will be employed to fund?” The answer to this question will assist you in determining the type of insurance you’ll need.
An experienced life insurance agent can assist you in deciding which kind of policy for your particular situation. If they come to visit you, they’ll likely speak about three kinds of Life insurance options for grandparents that children buy for their parents:
Term Insurance
Term insurance is the cheapest life insurance policy as they are designated to last a pre-set period. Coverage comes to an end on the expiry of the pre-set time, which can be 5, 10, or 20 years. By far, it is the least expensive of all the life insurance policies.
Given the time limits that come with these types of policies, it is important to buy term insurance when one has temporary objectives that can be met over a given period. It is also important to note that most insurance companies offer term insurance up to the age of 80, so that may be your cut-off, even less in some cases.
Whole Life Insurance
A whole life insurance policy is ideal insurance coverage that does not have any time limits. Such policies do not expire, the same way term insurance plans do. One can buy this Grandparent life insurance to enjoy protection for an unlimited period.
However, it is important to note that these policies tend to cost more than other life insurance policies. Similarly, they cost more as they provide the assurances of beneficiaries accomplishing their objectives.
Whole life insurance policies for grandparents would come in handy once they mature, by shielding those left behind from any living expenses that might come. This may include funeral bills as well as any underlying debts left behind by the deceased and medical bills. The payout can also come in handy in estate planning or from donating to family or charity.
Guaranteed Issue Life Insurance policy
Guaranteed issue life insurance is ideal insurance coverage for seniors above the age of 50 who cannot get approved for any other policy. These policies typically come with a two-year waiting period. This means that if you were to pass away in the first 2 years the full death benefit would not be paid. Typically the premium you paid plus interest would be paid to the beneficiaries but that is it. After 2 years the full death benefit would be paid.
These policies help shield the family members and beneficiaries in case of scary uncertainties. This type of insurance caters to all things like medical bills in case of sickness to other costs that might come into being as a result of hospitalization.
Similarly, guaranteed life insurance is usually bought to pay off any burial expenses that might arise in case of death. Most of these plans only go up to $25,000 which is more than enough to pay for a funeral and often extra final expenses.
By consenting to such policies, a grandparent should be able to protect their family from any debt by covering any final expenses. These policies also provide grandparents an opportunity to look out for their loved ones for a given period when they are not there.
Again, these types of policies are better for those seniors who are not able to get traditional coverage due to severe health risks.
Tips for buying life insurance for grandparents
While getting life insurance coverage, it is important to note that there are scenarios whereby taxation can come into play once a policy matures. To avoid the taxation problem, it is required to see that the individual paying for the premium is the one controlling the policy and is the one being insured.
Work with an independent agent:
As with most families, it is usually possible to get affordable life insurance for grandparents but very few are ever able to get the best insurance policy. Applying for a life insurance policy with the assistance of a qualified life insurance agent means that you will be in a good position to access some of the best deals from different insurance companies. Independent agents specialize in matching their prospective clients with whichever companies fit their needs. It is important to note that there is no cost in dealing with an independent agent. This is because insurance companies pay independent agents a commission, on bringing in new customers to them.
Health information:
If you are to end up with the best life insurance policy, then gathering all the relevant health information on the person being insured is vital. Grandparent’s health history is the single most important piece of information that determines the kind of coverage an insurance company would agree to.
Before visiting an insurance agent, make sure you have all the health information in place. If you do not have any information, there is no way an agent would be able to match your needs with various offers in the market.
While it is possible to get life insurance quotes using age and gender, such quotes would only be theoretical and may not pass through with most insurance companies.
Some of the key health information to provide to an insurance agent includes past and present prescription medicines as well as past and present diagnosed conditions. One must also provide documents detailing major events such as heart attacks, strokes, or hospitalizations. In the case of tobacco and alcohol use, one must also detail the same.
Consider Your Budget
Getting life insurance can be financially draining, especially in the instance of rising premiums. For this reason, it is important to consider one’s budget. One should be able to cater for premiums for up to 12 months, without straining the current financial position.
Many people have failed with life insurance policies by trying to take out a big policy for their grandparents to the extent of defaulting on premium payments. For this reason, people need to consider their budget before signing up for any life insurance policy. Make sure it is something that you can afford sustainably.
Consent Is Key
It is impossible to buy life insurance for a third party without their consent. In this case, the grandparents must agree to the policy and be ready to share any information that an insurance company may require.
Consent is necessary even when one is buying a guaranteed Life insurance coverage for grandparents that does not require any background medical information. Getting consent should not be a problem especially if grandparents are not the ones who will be paying premiums.
How Much Does a Life Insurance Policy for a Parent Cost?
The Cost of affordable life insurance for grandparents can vary. Several factors determine cost:
- The type of life insurance
- The company you choose
- Your age
- Your health status
- Your coverage amount
Here are some age charts you review to get an idea of how much purchasing life insurance might cost:
It’s Easy To Buy best Life Insurance For Grandparents:
Purchasing life insurance for grandparents is one way of ensuring that they take care of your family’s financial future after they are gone. A lot of life insurance companies permit you to complete the whole application process online and offer authorized agents that don’t receive commissions for sales to guide you in the buying process.
There are many websites run through independent insurance companies and agents who can assist you and your parents get the Best life insurance for grandparents for a reasonable cost. Pick the approach that works best for your family members and yourself and feel the joy from knowing that you’ve boosted the financial situation of multiple generations in your household.
FAQs
Yes, grandparents are eligible to purchase whole life insurance for their grandchildren after obtaining consent from the child’s parent or legal guardian.
Grandparents insurance is the process of obtaining a policy to cover the life of a grandparent and then designating yourself as the survivor. This means that even though your grandparent is insured, you will be the one to pay for the premiums. If your grandparent dies during the time in which the policy is active, you can collect the policy’s face value.
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