Types of Life Insurance for Parents

Since people are retiring later and living longer life spans, life insurance is often required for a variety of different reasons.

So, the best life insurance plan for parents over 60 may differ significantly from the life insurance needs of people over the age of 70.

What is the best life insurance for your parents?

Determining the reason why your parents may need coverage will help you select the appropriate type of policy and how much coverage they may eventually need.

Reasons to Buy Life Insurance on Parents

Mortgage protection life insurance

Cover credit card debt

Protect income to spouse

Pay for burial and funeral expenses



Help Pay Estate Taxes



Create a legacy for children

Make a charitable donation

Term Life Insurance

Most people also realize that as their folks get older their life insurance rates will go up in cost each year.

A level term life insurance plan offers a way to lock in their premiums at a fixed rate for between 10 and 30 years.

Good news!

If your parents are in decent health, they can qualify for affordable term life insurance rates.

Term life insurance is an solid choice for people looking to cover their family until financial burdens such as credit card or mortgage debt can eventually be paid off.

So, if your parents still owe money on their home loan, a mortgage life insurance policy can protect their mortgage and allow a house to be passed free and clear to children.

Term insurance can also cover your parents while they are paying off outstanding personal loans or credit card debt.

Another common reason seniors buy term life insurance is to either protect their earned or retirement income for a surviving spouse.

Many senior citizens need income to meet ongoing financial obligations and keep busy working jobs well into their seventies.

Retired parents also use term life insurance to protect their pension income to their spouse in case of a premature death as well.

What type of term life can people in their seventies purchase?

Parents selecting term life insurance plan at age 70 and over have only two options with most insurance companies.

This is because only the 10 and the 15 year term life insurance duration’s are available after the age of 70.

A ten year term will be your cheapest term plan, while a fifteen year policy will cost mom and dad more money in premiums each year.

So, you can save money by purchasing term life insurance only for the time that your parents still have outstanding loans.

If either parent dies prematurely, the life insurance policy will provide tax free funds to ease the financial burden on surviving family members.

Mortgage Protection Example:

At the age of 76, John still has ten years left on a $250,000 mortgage.

John has a tough decision!

He could save money by just covering the 10 years remaining on his mortgage or he could buy more expensive coverage which will last his entire lifetime.

Please take a look at rates below for a $250,000 term life plan for 10 years at 76 years old that costs only $381 per month, compared to $744 for a 15 year term life insurance at 76 years old.

Why is there such a big price difference between plans?

The reason for the additional cost is that a 15 year term policy will provide coverage until the age of 91 compared to only age 86 with a 10 year plan.

So, the probability of a death claim being paid is higher because your 15 year term policy will run further into your parent’s life expectancy!

Buyer Tip:

This buyer tip will depend on your parent’s age, health, and financial situation.

If john has extra money, he could potentially enhance the value of his estate by purchasing either a 15 year term or a lifetime universal life plan.

With this long term strategy, he would cover his mortgage and provide tax free funds to his children when he eventually dies.