Can I be the policyholder of my parent’s life insurance policy? Sometimes, our parents may prefer something other than getting life insurance for various reasons. However, that shouldn’t stop a caring child from securing life insurance for their parents to cover final expenses, terminal or chronic illnesses, and any outstanding debts.
The child needs to converse with their parents, explaining the advantages of life insurance and assuring them that they will handle the policy payments. In other words, the policyholder and the beneficiary can be the same person, with the parent being the insured party.
What’s the benefit of this? For instance, the parent falls ill if the child is a permanent life insurance policyholder with living benefits. If the child needs funds for medical care, the parent can access a portion of the death benefit to cover their treatments. On the other hand, if the parent passes away, there will be ample funds for funeral expenses and settling any debts the parent may have left behind, such as a car loan, mortgage, or any outstanding personal loans. If there are no debts at the time of death, the death benefit is tax-free to the contract beneficiary.
The life insurance purchased by the child for their parents functions as if the parent had taken out the policy themselves; only the contract owner has changed. In this scenario, the child, who assumes responsibility for the policy payments, is also the person who receives the death benefit when the insured party passes away.
If you’re considering life insurance for your parents, contact a specialist at Univista Insurance. They can address all your concerns and guide you in securing a beneficial policy. Can I be the policyholder of my parent’s life insurance policy?
Give us a call today for a comprehensive assessment! (305) 728-6352. You can also get a free quote here.
