Last Updated on March 5, 2018 by lifepolicyshopper
Buy a Life Insurance Policy For Your Parent
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We can help guide you when you shop for life insurance. Here we discuss how to find a policy that meets your needs, fits your budget, and decide how much insurance you need. Using LifePolicyShopper will help you make informed decisions when you buy a policy on your aging parent.
You may qualify for a state-regulated program to pay for your final expenses. It is important you know how to qualify for this life insurance benefit available to you. This benefit will pay for 100% of all funeral expenses up to $35,000. This payment is tax free for Virginia residents. You are entitled to receive no-cost information as a resident of Virginia. IMPORTANT – Return this postage paid card within 5 days.
Important things to consider for your parent’s policy
Review your own insurance needs and circumstances. Choose the kind of policy that has benefits that most closely fit your needs. In this case you will want a policy with the following attributes:
1. First Day Coverage. Your parent will be fully protected the very first day your coverage goes into effect with no exclusions and no waiting period.
2. Ease of issue. No physical exams.
3. Your aging parent premiums will never go up. Lock into a rate at their current age and the cost will never increase regardless of changes to their health and age.
4. Benefits will never go down. Regardless of changes to their health and age.
5. All programs build cash values.
6. The benefit is paid to their beneficiary tax free on the worst week of your life.
7. The policy can never be cancelled as long as premium payments are made.
8. This is a protected asset that you will never be forced to liquidate.
Be sure that you can handle premium payments. Can you afford the initial premium? Don’t sign an insurance application until you review it carefully to be sure all the answers are complete and accurate. Don’t buy life insurance unless you intend to stick with your plan. It may be very costly if you quit during the early years of the policy. Don’t drop one policy and buy another without a thorough study of the new policy and the one you have now. Replacing your insurance may be costly. Read your policy carefully.
Buying Life Insurance for your Aging parent
When you buy life insurance, you want coverage that fits your needs. First, decide how much you need—and for how long—and what you can afford to pay. Keep in mind the major reason you buy life insurance is to cover the financial effects of unexpected or ultimately death. Life insurance also can be one of many ways to plan for you future. Next, learn what kinds of policies will meet your needs and pick one that best suits you. Then, choose the combination of policy premium and benefits that emphasizes protection in case of early death, or benefits in case of long life, or a combination of both. It makes good sense to ask a life insurance agent or company to help you. We can help you review your insurance needs and give you information about the available policies. If one kind of policy doesn’t seem to fit your needs, ask about others.
Does your aging parent have a policy in force now?
If you are thinking about dropping a life insurance policy, here are some things you should consider: If you replace a policy, don’t cancel your old policy until you have received the new one. You have a minimum period to review your new policy and decide if it is what you wanted. It may be costly to replace a policy. Much of what they paid in the early years of the policy they have now, paid for the company’s cost of selling and issuing the policy. You may pay this type of cost again if you buy a new policy. Ask your tax advisor if dropping your policy could affect their income taxes. If they are older or their health has changed, premiums for the new policy will often be higher. We will look at all of their health impairments and find the right carrier that accepts those conditions at the best rate. You may have valuable rights and benefits in the policy you now have that are not in the new one. If the policy your parent has now no longer meets their needs, you may not have to replace it. You might be able to change your policy or add to it to get the coverage or benefits you now want.
How Much Do You Need?
Funeral costs continue to increase every day. Families are faced with the difficult task of saying goodbye to loved ones. Did you know that according to the National Funeral Directors’ Association - as of January 2013 the national median cost of an adult funeral with vault costs $8,343.00 with additional expenses? Additional expenses can include a cemetery plot. Many funerals exceed $10,000.00 dollars and that’s before any outstanding debts or medical bills.
Planning your funeral requires a careful consideration of all your final needs. Consider how you want to be remembered, where your final resting place should be, whether you wish to be buried or cremated and what type of casket or urn you prefer. A funeral director will give you a list of the services and products that it provides. The value of your final expense life insurance policy should cover the expense of the package you choose, plus any additional costs.
The most basic, economical option is generally an immediate burial plan. An immediate plan may include a modest service at the graveside and a simple casket. The expense of a viewing is not included in most immediate burial policies. The costs of the plot, a headstone and flowers must be paid for separately and should be included in the estimate of your final expense.
A traditional full service option, including a viewing, a hearse, a formal ceremony and entombment and cremation is more costly than an immediate or direct package. When you consider the costs of a package, you must take every extra expense into account in order to arrive at an accurate estimate of your financial expenses.
When planning for final expenses, it is important to remember that funeral and burial costs are on the rise. Over the past 25 years, funeral costs have consistently increased. The average funeral cost today is $8,5081. Additional fees for cemetery, monument, flowers, & obituaries can increase this cost to $14,8582. Considering the average costs over the past 40 years and projecting out at 5% inflation per year, by 2030 the cost would be $18,276.30. The Social Security Death Benefit only provides a lump sum benefit of $255 for those who qualify.