Many children who are now grown adults are wondering if it is a good idea to take out a life insurance policy for either one or both parents. In the case of their passing, the coverage could be left to the children and the grandchildren.
The two main concerns and emotional responses that come up are of a financial and moral nature. From a financial aspect, some parents might only be in their sixties and still have an abundant life ahead of them. The person taking out the insurance policy would have to be willing to pay it for the next 25 years or more.
From a moral standpoint, children might feel as if they are pushing their parents into the grave, so-to-speak, or that the action of taking out a policy is selfish and self-serving. In addition, if the parents or parent are surviving on a low income budget, it could be that the money would be better spent caring for them during their living years, taking care of issues like healthcare and long term living assistance.
Regardless, you must find some solid ground between financial and moral balance that gives you the peace necessary to feel like you are making the correct decisions.
This is definitely an issue that takes careful consideration, and at the end of the day be sure to follow your heart as well as your head. Consider this: Is your parent (or are your parents) in full agreement with the plan? Maybe the parent had always hoped to have this kind of plan, but due to financial constraints could not bring it into fruition.
If the parent welcomes help for this sort of thing and it has even been on his or her mind, it might be a good decision.
As for the feeling that one is “gambling on their parents’ death,” ask yourself if the sole motivation for considering such a plan is indeed for your own monetary gain. If this is the case then there are definitely opposing forces at work. If your mind is preoccupied with wanting a claim, how can it be focused on loving the life that is?
If there is a case where the parent is in declining health but is still able to acquire a life insurance policy, then the situation looks pretty lucrative financially, but who would want to capitalize and speculate on the death of any person, let alone their own flesh and blood?
As a result, it’s no surprise that many people would feel a little shady taking out a policy under those circumstances, but sometimes it is necessary to pay for expenses that will pop up after death. In addition, keep in mind that if a policy is being taken out on a person who still has a great 25 years ahead of them, financially this is often not a wise investment.
At best, the idea of putting the money that would go towards a life insurance policy into savings instead, especially for a parent who is not so well-off financially, is a plan that is both financially and morally rewarding. This money could provide comfort to a parent (or parents) whose finances have gotten out of hand, while saving this money in advance can also help you be prepared to rise to the occasion and help out if necessary with very little financial strife. In addition, if the money never has to be used, it could always be invested differently in the event of the parent (or parents) passing.
Photo Credit: roblisameehan
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For this kind of decision-making about life insurances for parents, ASSESSMENT is the first and best action to take. This would surely clear your doubts and questions in your mind.