Despite the unprecedented wealth and success of the Baby Boomer generation, there are still many people who don’t have significant savings to rely on at the end of their lives, and as subsequent generations age, the financial situation has grown worse, and successful prospects have dwindled.
Children are now increasingly being forced to cover the costs of funerals, hospitalization, and care for their older relatives. What options are available to children to help cover these costs? What are the drawbacks?
The Question
Discussing life insurance.
One such person posted this question on the subreddit r/LifeInsurance with the post titled “Am I able to take life insurance out on family?”. In this post, the author states that he does not know if his parents have any arrangements for their funerals, but he knows they don’t have life insurance. The author does not want to be stuck paying for funeral costs because they have four kids and doesn’t want the headache of additional debt for people who were never financially responsible.
Please remember, that the advice in the original thread and the content in this post are not tax advice. You should always consult with a professional before making any financial decision.
The Response
A life insurance policy.
The answer is definitely ‘yes’, and there are a few different options that responders offered that could help besides a normal life insurance policy.
First, of course, as long as your family member is still alive, you can open a life insurance policy for them if you have their permission and personal information. There will be a few more steps for you to complete in order to finalize the policy, but the process will essentially be the same. However, different companies offer different levels of insurance at different costs, especially if you are opening a policy on an older individual who might pass away sooner than younger family members. For that reason, it is smart to do additional research and compare plans before you settle on the first one.
Of course, based on the age and health of the individual being insured, some companies might refuse coverage or offer less money than you were hoping for.
Second, there are also plans known as final expense insurance, funeral plan insurance, or burial expense insurance, but they are all basically the same. These are plans that only cover the expenses involved with the death of an individual, and not for covering the loss of income or other financial burdens.
These policies might be a better option for a number of reasons. Mainly, the coverage amounts are much lower so the premiums will be much more affordable. Also, there are no medical exam or health questions you need to answer, and most insurance companies have guaranteed acceptance within an age range (usually between 45 and 85 years old). The rates for these plans typically do not increase and the benefits will never decrease because of health or age. If you are only looking to cover funeral expenses, one of these plans is probably the better option, especially if finances are already tight.
Third, there are prepaid funeral options. These are insurance plans, but they allow someone to pay for their eventual funeral expenses ahead of time in installments. While not insurance, these plans can help spread the cost of a funeral over time and make it more predictable. Most funeral homes will offer prepaid funeral plans, so it’s always worth checking in with a local service where your family lives.
A Quote in Minutes
Even if you’re in a similar financial position and unsure about the exact amount of coverage needed, it’s always wise to get a quote and explore your options.
A quick, no-obligation quote can provide valuable insight into what’s available and what might best suit your family’s needs. With affordable rates and customizable policies, life insurance is a simple step you can take today to help secure peace of mind for your loved ones tomorrow.
Click here to visit our website and learn how to get a quote in just a few minutes.
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