If you’relooking for Life Insurance for your parents, you’ve come to a place where we can help you to get them insured. I relate to the way that you feel because one of my parents died without having sufficient insurance and I had to pay for a portion of his final expenses, out of pocket. I had to go into debt to cover this, so it was a lesson that I’ve experienced first hand. As a result, I make sure that I have adequate insurance so that my daughter doesn’t have to go through the same thing and I’m happy to help you to understand what it is that you’re facing. In order to be able to take out a Life Insurance Policy on another person, you must have what’s called an “Insurable Interest" in that person’s well-being. So, you can’t take out a policy on your neighbor because he doesn’t have the money to do that. You would have to have an interest in the person so that you if something happens to them, then it would or could cause you to suffer sort of financial loss. For example, if one of your parents or both parents don’t have life insurance and they suddenly pass away, there are a few ways that you could suffer that financial loss.
Such as, having to pay for their funeral expenses, having a loss of their income, if they live with you and they are helping you to cover expenses or if they are supporting you financially and something happens to them. If they help you with the kids, while you’re at work, if you have shared expenses like credit cards,auto loans, personal loans. If you should be a part of a business that they own, or you own together. There are any number of ways that you could be financially connected to them and thus suffer a loss.
Another example not related to Life Insurance for Parents would be a husband or wife. If one were to suddenly pass, you could certainly have a financial disruption , loss of income or loss of a partner to help with things that might be neededa. Again like taking care of children, being a housewife, being the bread winner, having shared debts, financial responsibilities, retirement or Social Security income. Having the loss of a second income and their final expense arrangements. The loss of their business income with no one to continue in their place if arrangements haven’t already been made. All of this while having to deal with the grief and mourning of the loss of this person. As most of us know, it’s something that is difficult to deal with for someone else and having to go through it ourselves can be devastating. I hope that explains the concept of ”Insurable interest”.
As you can see there can be many ways that you might have a financial interest if God forbid, something were to happen to a loved one. Now I know that this article is about getting Life Insurancefor Your Parents, but the other examples help to illustrate the point of insurable interest. I’m not saying these things to try and scare you, this article will hopefull help to provide you the information that you might need to be able to manage the situation in what is more than likely going to be a stressful time.
So now that you understand a little about more about Insurable interest, let’s move onto getting this coverage for your parents.
Life Insurance Rates:
So, Life Insurance rates are mostly determined by three factors, the insured’s age, their health condition and the amount and the type of coverage that is being applied for. Let’s go over each one of these scenario’s, to get a bit of an understanding of what it’s going to take to get your parents covered.
The age of the person insured is extremely important in determining the cost of the insurance. The older the individual is, the more expensive the insurance isgoing to be. This, of course, is because the older a person is the more likelythat he or she is going to die. This is something that happens to everyone, no one escapes this, but it is more likely that an elderly person is going to pass away as opposed to a young, healthy individual. Life Insurance spreads the risk out over a large group of people, so everyone is charged according to the figures that the insurance company’s Actuaries come up with. So that the insurance company has enough assets to make a profit and to cover all its outstanding liabilities. These Actuaries, determine the risk involved and set the price accordingly.
Health is another important factor that will play into how much the cost of Life Insurance will be. The health of the applicant is taken under consideration because people whobecome ill, especially to disease that can cause death are a much biggerconcern for the insurance companies because of course they could insure them and be responsible for paying out a large claim with very little premium payments from the client. The insurance company will typically check with the physician of the proposed insured to find out the condition of the client. They will also ask medical questions on the applications. If these questions are answered falsely, this can be considered fraud and the insurance company would no longer be liable for anything other than the premiums that were paid by the client and the claim would not be paid. So, it is very important that you be as honest with the insurance company about health information as you can be because you could wind up with a voided claim if something is omitted.
The amount and type of Life InsuranceCoverage:
This, ofcourse will directly affect the cost the insurance. The bigger the Face Value,or the amount of insurance applied for the larger the amount of premium. Togive you an example, LifeInsurance for a 20-year-old female, a Universal Life Policy for half amillion dollars ($500,000), which will last to age 90 would cost around $141.00per month. This policy will last for 70 years, build tax free cash value andprovide Life Insurance coverage for her family, should she decide to have one well into the lives of her children. This will also provide a nest egg for her when she gets older. The amount of the return will vary depending on the type of policy.
The samepolicy for the same person for $100,000 at age 60 would cost around $132.00 permonth. You can see the stark difference in premium. It is based on thelikelihood of the policy paying out and the possibility of the insurancecarrier getting to invest the premiums and get a return on that investment.
Types of Insurance:
Whole Life insurance is insurance that will cover the insured throughout their life, often until age 121. It has certain characteristics, things like premiums that remain level or that can change over time, depending on the type of policy. It can have a cash value portion of the policy, where the amount of cash value in the policy is available to be borrowed. Any loan that is taken out has to be paid back, with interest, or that amount will be taken out of the face value of the policy at the time a claim is made against the policy.
Term Life Insurance is a life insurance policy that last you for a certain time, such as 10 years,20 years or 30 years. This coverage is less expensive than Whole Life, but itwill only last for the length of the policy. After the term, you can still havecoverage, but it will become overly expensive. It would be better for you to cancel the policy and get additional coverage if you wanted to continue to have insurance to cover your final expenses. This is good coverage if finances don’t permit you to get Whole Life Insurance.
Final Expense Insurance is considered a type of Whole Life Insurance, but it isusually for people who can’t get coverage because of issues, like Age orMedical Condition. If you have been denied coverage, then this is good option.You can’t be denied if you meet the age requirement, somewhere in the age rangeof 50-85. This pool of insurance is often used because this is the only type of insurance that a person can get. It is also the most expensive. This is often a last resort for people to get covered.
If you are lookingfor Life Insurance for you parents, Aware Insurance Services has you covered.You can contact us directly or you can sign up on one of the links provided inthe article, all are good options. We want to be here for you when you’re readyto get insurance coverage. No high-pressure sales so that you might regret the decision after you made it. Again we are here to serve your needs. If you want to speak with someone, if you have any questions, please feel free to reach out.
I’m Willie Ware, but you can call me Bill.
Thanks for sticking in there.