Life insurance for parents

If you're the parent buying coverage

Size it against the obligation rather than a multiple of income: the years until your children are independent, the mortgage, childcare, and education, minus what's already in place.

Term insurance usually fits, because the obligation has an end date. Match the term to the longest of those commitments rather than picking a round number.

If you want a policy on your parents

This is possible, and there are two requirements. You need insurable interest — a genuine financial stake — and your parent generally has to consent and participate in the application. You can't insure someone without their knowledge.

• The parent must typically consent and complete the application
• You may be the policy owner and pay the premiums
• Insurable interest is generally satisfied by the financial relationship
• Underwriting is based on their age and health, not yours
• Simplified or guaranteed issue may be the realistic route at older ages

What people usually want it for

Most commonly, final expenses — funeral costs, outstanding medical bills, and the administrative costs of settling an estate, which arrive quickly and in cash.

Final expense policies exist for exactly this: smaller face amounts, simplified underwriting, and permanent coverage that doesn't expire.

Have the conversation first

Since your parent has to participate, this starts as a conversation rather than a purchase. Framing it around not leaving anyone with unexpected bills usually lands better than framing it around insurance.