How to Buy Final Expense Insurance for Your Parent

You probably never thought you’d buy final expense insurance for your parents. The thought of them passing away is a very unpleasant thought, and thinking about a funeral can be particularly upsetting and stressful. For a lot of families, buying final expense insurance for a parent is a real need.

If you’re considering buying final expense insurance, you know the benefits of insurance. Specifically, getting a check from the insurance company providing you with needed funds to pay for all of the final expenses for your loved one.

Let’s examine final expense insurance: what it is, how to buy it, when to buy it. I’ll also provide an FAQ on this particularly misunderstood topic.

Can You Buy Final Expense Insurance for a Parent?

In short: Yes!

Sometimes called “burial insurance” or “funeral insurance”, final expense insurance is life insurance. Final expense insurance is typically a small, whole life policy that varies from a few thousand dollars to as much as $50,000. It’s sold as a policy for the express purpose of burying a loved one, and is generally limited for purchase for ages over 50. 

It’s still just life insurance.

When the insurance company pays someone the death benefit, they can use it for any purpose they want to. Someone who bought a $25,000 policy on a loved one could spend $15,000 for a funeral and burial, then spend the remaining $10,000 on a vacation. How the money is spent is their choice. 

Since final expense insurance is life insurance, and you in most cases, you can buy life insurance on anyone with an “insurable interest”. So you can buy final expense insurance on a both parents. 

What’s “insurable interest”?

The term, “insurable interest” means that you’re buying life insurance on the life of someone whose death would have a negative financial impact on your life. If your parents die without any liquid assets, like cash, to pay for their burial and they didn’t own any life insurance, you then have a justification for buying final expense insurance for them. You have an insurable interest if you’re going to be the one that pays for their funeral.

Insuring your parent(s) makes perfect sense

It may feel somehow “creepy”, but parents buy life insurance on their kids. Business partners buy insurance on one another. We insure those we care about and their death would impact us financially.

It’s no different with you buying life insurance for your parents. You may not have the cash available, and you want to provide them with the kind of funeral that they would like. If you promised them that you’d carry out their final wishes, you want to be able to deliver when the time comes.

How to Purchase Final Expense Insurance for a Parent

Buying final expense insurance for a parent is fairly easy. There are just a few details that need to be covered.

Buy final expense insurance for a parent, step by step.

Step 1: Start the conversation

First, you’ll need to talk with your parent(s). Though it may be a difficult conversation for them to have, as well as for you, it‘s really important. Discuss important details like:

• What do they want their obituary to say?
• Who do they want to officiate at their funeral?
• Who do they want to deliver a eulogy at their funeral?
• What clothes do they want to be buried in?
• Do they want a burial or cremation?
• If cremation – where do they want their ashes scattered?
• If burial – where do they want to be buried?
• Do they have money set aside to pay for their final expenses?

This last question will lead you into the discussion about buying final expense insurance for them if it’s needed. 

Step 2: Talk through important details

This is where you and I can work together, so you’re fully prepared for the conversation.

Give your parent(s) details about final expense insurance (I can help you gather these details):

• What final expense insurance is and it’s purpose
  • I can provide you with printed materials to help with the conversation
• How much coverage will be needed based on their answers to step 1
• What information is needed for the application
  • I can help you put together a list so they’ll be prepared
• How long does the process take
• When will they be fully covered

Step 3: Call me (702) 867-8150

After talking with your parent about getting final expense insurance, you’ll need to speak with a licensed life insurance agent about buying a policy. As an independent, licensed agent I can present you with options from several different life insurance companies, not just one, like agents that work directly for an insurance company.

We can go over all the legal regulations must be followed and any decisions that need to be made. We’ll need to get:

• Consent from your parent(s) since they will need to sign the application as the insured
• A beneficiary name to receive the death benefit when your parent dies (this should be you)
• Who’s paying for the policy (most likely this will be you)
• Who will own the policy (if you are paying, it should be you)
• Type of policy: term or whole life. The only option here should be whole life since the premium and benefit amount stays the same their whole life, and it actually builds cash value
• The amount of the policy

Step 4: Complete the application

We’ll complete the application together – right over the phone – with your parents. All questions concerning insurability will need to be answered by your parent. You can’t answer for them. They won’t need a physical exam; no blood will be drawn. Based on their answers to the questions about their medical history, we’ll get a decision from the insurance company.

Note: If you are concerned about any serious medical conditions preventing your parent(s) from being covered, don’t be. There are carriers that provide whole life insurance policies with guaranteed acceptance for a little higher premium. We can talk through this type of policy during our call.

Once the policy is issued, you’ll need to review it with your parent and make sure everything is in order – owner, payor, and beneficiary are correct. You can contact me directly help you with any questions.

Step 5: Safely store your policy

Put the policy in a safe place that you can easily access when your parent passes away.

This will already be a difficult time for you emotionally, and the last thing you want to do is be hunting to find the policy.

How does final expense insurance work after your parent(s) are covered?

There are two things you need to pay attention to after your parent(s) are covered: premiums and payout.

Final Expense Insurance Premiums

Ensure that the premiums are paid on-time, every time. For such a very important policy type – the one that will cover your parent(s) final expenses – insurance companies generally want an automated payment. Neither you nor the insurance company want the policy to lapse. But make sure that the premium payments are being made.

Final Expense Insurance Payout

Unfortunately, there’s ultimately going to come a time when your parent will pass away, and you’ll need to collect the death benefit from the life insurance company. There are a few things you’ll need to get this done when you file a death claim:

• A copy of the policy with the policy number
• Death certificate
• How you want the proceeds paid (check or direct deposit)

Who to contact

You will contact the insurance company, provide them these details, and they will handle the rest.

You can also contact me if there are any questions or concerns. As your agent, I will be very glad to assist in any way I can during this emotionally difficult time.

Act now. Don’t wait.

Now that you know you may need to buy final expense insurance for your parents’ end-of-life expenses, don’t delay talking with them. You can rest assured that it’s something they’ve thought about before, and they may be relieved when you approach them about it. 

You don’t want to be surprised when you are at the funeral home, and you find out what the funeral expenses cost – and you don’t have insurance on your loved one. Take action to prevent a serious financial setback for you during an emotionally difficult time.