09 tips  for  buying a life insurance policy for your parents 

There are some tips for buying a life insurance policy. One must keep in mind while buying a policy for parents. Read more here

09 tips  for  buying a life insurance policy for your parents 
Feature image of life insurance for parents

Not everyone needs to purchase life insurance for parents. Some people do and some don't. It all depends on each particular situation. Sometimes it is simply not necessary to purchase a life insurance policy for the parents. 

For those who do want or need to hire one, we share 10 infallible tips that will guarantee you to hire the right policy at the best possible price. 

1. Select the right policy type to achieve your goal 

It is well known that insurance is a general term. There are many different types of policies, and they all work differently. 

Life insurance is a tool that is used to fulfill a purpose (what the money would be used for). However, not everyone has the same goal in mind, so there is no single life policy that suits everyone. 
For example, someone wants life insurance proceeds to pay off some debts. On the other hand, some people want life insurance that covers final expenses. 

Because those needs are different, they justify a different type of life insurance policy. 
To make sure you really meet your goal, it is vital that you select the most suitable type of life insurance to achieve your goal. 

There are two main categories of Life insurance. Permanent and temporary insurance coverage. Each has its own pros and cons, and they should be used for different purposes. 

2. Avoid tax consequences by doing this

If you were to imagine that a life insurance policy was a shape, it would be a triangle. It includes three points, which are ... 

The insured: The individual who is insured by the policy. 
The owner: The individual who pays the premiums and who exercises control over the policy. 
The beneficiary: The individual designated to receive the death benefit upon the death of the insured.

To avoid a potential tax bill, you must ensure that two of the three points in the triangle are the same person. 

If the three points are different people, then the death benefit could be considered a taxable gift to the beneficiary. 

This situation is known as Goodman's Triangle or as the Profane Trinity. 

3. Work with an independent agent 

Know this. There is no single life insurance company that suits everyone. That is totally impossible. 

Everyone accepts and rejects various health problems, so there is no company that can satisfy everyone. 

Let's draw the conclusions: 

To find the best life insurance policy for parents, it is imperative that you work with an independent agent because only they can compare offers from dozens of insurance companies. They will simply find the company that best suits their circumstances. 

In the life insurance industry, there are two types of agents that you will have to deal with: 

Captive Agent: An Agent represents a single insurance company. For example, State Farm is an example of this. It's the agent who can only sell you State Farm insurance. You cannot represent any other insurance company. State Farm strictly prohibits it. 
Independent Agent: An insurance agent who is free to represent as many independent insurance companies as he wishes. It doesn't matter how many other insurance companies an agent represents. 
The type of agent you work with will greatly influence the type of offer you get. 

4. Your parents' health: Gather as much information as possible 

The medical history of your parents is the major factor to determine which company will accept them, and what the will be price and the most important which company is best for them.

For that reason, try to become as familiar with your health as possible before you start talking to agents. 

Any reputable agent will try to collect information about your parents' health history. This will allow you to do your job of finding the best plan for them. 

5. You DO NOT need to be physical with them to apply. 

In the past, you had to sign the papers in person, which meant that both you and your parents had to be in the same place at the same time. 

This is not how it works now in the modern age. 

Even you and your parents may live in totally different areas/states, and you can still buy insurance for them. 

Today, many life insurance companies have electronic application processes that make this possible.

6. Consider your budget 

You may want to purchase a certain amount of coverage for your mother or father, but the question is… do you have the money to do it? 

This is what you should know. 

If you can't comfortably pay 12 installments over 12 months, then you shouldn't. Buy less coverage. 

Do not feel bad or aggravated because your budget does not allow you to buy the coverage you want. 

Remember this. 

Hiring some type of coverage is better than having no coverage at all! 

7. Make sure you get their consent first 

You cannot purchase any type of life insurance for another person without their consent. The insured must consent to the policy. 

This rule is true even if you have power of attorney, or if you take out a guaranteed acceptance policy that does not involve health questions or medical underwriting. 

The only exception to that rule is when you purchase whole life insurance for a child. 

8. Don't choose an insurance company based on how well-known it is. 

In 2016, there were 5,977 insurance companies in the United States     (including territories). Hopefully, you've heard about 1% of them. 

So the remaining 99% of companies are bad because you've never heard of them before? No way. 

This is what you should know. 

Very few insurance companies advertise on a large scale to ensure they are a household name. Those that don't are also just as credible, trustworthy, and financially stable as those that advertise in the mass media. 

So be open to purchasing insurance for your parents from an insurer you've never heard of. 

9. Avoid Guaranteed Acceptance Life Policies If You Can 

A guaranteed acceptance life insurance policy is one in which there is no medical or lifestyle underwriting. There are no health questions or anything. Your acceptance is always guaranteed. But requirements are only two:- 

The insured person lives in an area/state where the insurer offers the product. 
The insured has the mental faculties to enter into a legal contract. 
If you meet these two requirements, you can get a policy. However, you shouldn't get these just because you can ge these. In fact, you should only consider them as a last resort. Ultimately, if you want life coverage for your parents that starts right away and costs less, avoid guaranteed issue plans unless that's impossible (it usually is). 

Can you buy life insurance for your parents? 

Yes, you can purchase life insurance for your parents to pay your final expenses or other debts. but they must have to agree to the coverage and have signed the application. 

To contract coverage between $ 2,000 and $ 50,000, you do not need to give explanations. However, if you want to buy more than $ 50,000 you will probably be asked to explain why you need so much coverage.