Life insurance is useful for lots of us, and while it’s typically talked about because of its advantages for younger people, there are also advantages to having a policy as you enter your golden years.
You may even consider purchasing life insurance for aging relatives, with a view to shielding yourself from any debt that they might have left over after they die.
The benefits of buying life insurance for parents include being able to cover the costs of things like end-of-life-care and funeral arrangements as well, which will be helpful to ease the financial burden of a loved one passing on.
There are, however, a number of common errors that people make when buying this type of policy, so let’s go over them so you can avoid the most frequently encountered pitfalls.
Overlooking Eligibility Requirements
Every insurance policy has its own unique requirements for qualification that will need to be met by the individual being covered in order to ensure eligibility.
If you don’t take this into account upfront, you might get a long way through the application process before you realize that the policy in question is not accessible to your family member, perhaps due to a pre-existing condition.
Not Seeking Consent
It should go without saying, but you cannot take out a life insurance policy on any senior citizen without having their express consent.
In some cases, all that means is getting them to sign the application document. In others, they will have to go through a medical examination by a healthcare professional, both to ensure their eligibility as mentioned earlier, and to secure their consent in person.
Talking about life insurance with seniors is not always easy, but it is a difficult conversation that has to be had at some point, and it is better to get it out the way sooner rather than later, so that they are in a fit condition to give consent in the first place, and even provide POA if necessary.
Picking The Wrong Policy
The right life insurance policy for parents is not a one-size-fits-all thing, but rather has to be a package you choose based on your circumstances.
Making the wrong decision is a possibility if you rush into this and don’t weigh up all your options, or get quotes from as many providers as possible. Seeking advice from an independent insurance expert is wise if you’re in the dark after a decent amount of your own research.
For the elderly, a term life insurance deal may work well, as this lets you set the period over which the policy applies, and will provide a payout of an agreed amount if the individual it covers dies during this window. There is a risk involved, in that if they outlive the term of the policy, then no claim can be made.
A whole life policy is an all-encompassing affair, as the name suggests. Furthermore there are different categories of insurance products within it to get your head around.
Take your time, determine a suitable budget, and work out which is the most financially sensible. You might even decide that no type of life insurance is needed.
Forgetting About Insurer Reputation
Finally, if you don’t do your homework, you might end up with a life insurance package which is cost-effective, but doesn’t actually deliver the benefits you’d expect because it is provided by an insurer that has a bad reputation for customer service.
The last thing you want is to find that processing your claim is a pain when you are also dealing with the fallout of the death of a family member. So check up on whether an insurer is well respected, and don’t make a commitment until you are confident it is the right choice.