Post Office Life Insurance
Choose between level, decreasing or increasing term insurance, each designed to offer you peace of mind based on your circumstances.
The quick answer is: yes, as long as there is a financial loss that would be passed on to you if they were to die, which is called 'insurable interest'. Insuring your elderly parents can help you pay for funerals, care bills and medical costs. This can include an unpaid mortgage or other outstanding long-term debt.
You'll need your parents' permission if you want to take out an insurance policy on their behalf.
People might insure their parents because it will help with costs after their parents die. Outstanding debts might get passed from parent to child, so getting life insurance for your parents before this happens means that you can help make provisions.
Of course, the most important thing is that you discuss this with your parents and make sure they are happy for you to arrange cover. They will also be able to help you as much as they can in terms of providing information for your insurer. It may bring relief for them to know that their children are provided for should they no longer be around.
The first thing to do before you insure your parents is to get an overview of their financial situation. That’s largely a case of working out how much debt your parents have, and what their assets are. You should try and work out whether these two details are going to change over time – for instance, if they have investments that mature, then you may choose to insure your parents for less.
It might help to read the detailed guide to managing a relative’s financial affairs from Which?
How much life insurance costs depends on what you need to cover once they’ve gone. If you want to insure your elderly parents just to cover funeral expenses, then you may be able to keep costs to a minimum. However, if you are taking out a policy that covers any outstanding debts you may inherit as a result, such as medical bills, then you may find that you incur higher monthly premiums. It’s a good idea to consult an online insurance calculator to give you a rough idea of what it might cost to have elderly parents insured.
Beyond the basic information, you may also be asked to provide medical information to the insurance company and the details of their doctor or healthcare company when you insure your parents.
A good guide to help you with this can be found on the Age UK website.
When it comes to choosing a plan to suit your elderly parents’ needs, you have two main choices: term insurance or whole life insurance, each with their own advantages. Bear in mind that when you're buying your parents' policy, the insurer will need to speak directly to your parents to discuss the policy and obtain permission.
Term insurance is when you pay for cover over a fixed period – say, five or ten years. During this period, you pay a regular premium that guarantees a payout to the person paying the premiums if your parent dies during the term.
The other choice, whole life insurance, is just that – insurance that covers your parent until the end of their life. If you are trying to organise a whole life policy for a parent who is already old and/or ill, then you will be charged more for the risk that it presents to the insurer.
Knowing which of these to choose will largely depend on your and your parents’ circumstances. Specialised whole life policies – such as Post Office Over 50s Life Cover – can be significantly cheaper than term life policies, however term life policies usually offer bigger payouts. They may also have a more detailed medical questionnaire.