We’re all familiar with the necessity of having life insurance for our spouse and children. All are dependent upon either our financial support or our direct care. In the event of our deaths, they would suffer hardship, and for that reason we carry life insurance to protect them.
But we can also look in the other genetic direction – to our parents – and see another growing need for life insurance. There is a certain role reversal that takes place between parents and children as parents move into old age. The children take on the role of parents – or caregivers – while the parents move into the role of children. They become dependent upon their grown children to take care of them. And as they do, it’s time to think about taking life insurance, naming aging parents as the beneficiaries.
Your parent may be dependent on your income
In an increasing number of cases, elderly parents are becoming dependent upon the income of their adult children. It’s becoming more common as people live longer. Even if they had a substantial amount of savings and investments earlier in life, if they live long enough, they begin to outlive their money.
In such cases, adult children often need to step in with either partial or complete financial support. An elderly parent in this situation is not at all unlike a dependent child – they are substantially dependent upon your income for support.
If they are, you may need to seriously consider taking out a life insurance policy naming them as beneficiaries. In the event of your death, life insurance proceeds will offer the financial support that you won’t be around to provide.
Providing physical care
Even if you aren’t providing financial support for your elderly parents, you may still need an adequate amount of life insurance if you are providing much of their physical care.
In-home nursing care is expensive, so many families opt to provide direct physical care in an attempt to save money. In addition, many elderly parents feel more comfortable being cared for by family members rather than strangers.
But if you predecease your parent – and you’re largely or primarily responsible for their physical care – some sort of provision will have to be made to pay for someone to take care of them in your absence.
Even within families, there generally is not a long line of people willing to take care of the elderly. The job almost certainly will fall on outside professional services in the event of your death. You may need to provide an adequate amount of life insurance for your parents that will enable them to obtain physical care upon your death.
Housing
If your elderly parent is living in your home, your death could leave him or her needing another place to stay. Unless there is other family available to take them in, they may have to go to a separate facility. This will cost money – and usually a lot of it – since any type of facility that provides even minimal care can cost several thousand dollars per month.
If you have an elderly parent living with you who is in need of care, life insurance may be needed to provide funds to give them a place to live in the event of your death.
An elderly parent could become your dependent
In a real way, an elderly parents can become a full dependent, much like your children. This is particularly true if they are disabled or in any way impaired. They’ll be completely dependent upon you for nearly everything that they have in life.
And just as it is with a child – an elderly parent can also be completely dependent upon you for everything – you should have an adequate amount of life insurance on your own life to provide for them and their special needs in the event of your death.
Term life insurance to the rescue
If you’re considering additional life insurance on your own life for the benefit of your elderly parents, term life insurance will almost certainly be the best way to go. It is far less expensive than whole life insurance, which means you can buy a lot more of it. And if you are providing major care and assistance to your parent, you will need a large amount of coverage.
In addition, since you will only need the policy to be in force while your parent is alive, you may only need coverage for a five or ten year term. There will be absolutely no need to buy more expensive permanent life insurance for this purpose.
Have you contemplated the need for additional life insurance on your own life for the benefit of your elderly parents?
