So what does this mean for you? If you’re aging parents do not have a life insurance policy and they don’t have savings or retirement funds to pay for their final medical bills and funeral expenses, their adult children – you – most likely need to come up with the money. That usually comes at a time when you are building wealth for your own retirement and your own future. As a result, this can set back your savings by tens of thousands of dollars.
Only 30% of Americans 55 to 70 have an individual policy
While we are employed, generally, our employers cover us with life insurance, and we think that is sufficient. When we retire many times, we don’t transfer those policies to an individual policy and now we’re older and individual policies are much more expensive because of our age and our current health. They can be much more expensive than the employer provided policy. And once retired, savings generally are directed toward paying for our daily cost of living, and that can be nearly - if not entirely- depleted before passing away.
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Time for tough conversation about life insurance with your parent
It’s not an easy conversation to have. Your parents have taken care of you your entire life. Now they are older and retired. They are no longer adding to their wealth so much as living off of it. Naturally, they’re not likely thinking of their own mortality - let alone how to pay for their final expenses. Now is a good time to have the tough conversation and prepare for the inevitable as part of your own financial planning.
Social Security - if you can qualify for it - only pays $255 for funeral expenses by law. Social Security will allow your parents to set aside up to $1500 for funeral or burial expenses and not count it toward their income but there are a lot of regulations around that. Additionally, funeral expenses are anywhere from $6000-$9000. A $255 benefit, plus $1500 savings won’t come close to paying for an actual funeral that will honor your parents memory or last wishes.
You can provide your parents with life insurance
There are many options for preparing for our parents passing. Among the most popular, and the most cost effective is called final expense insurance (also called funeral expense or burial insurance). For about two dollars a day you could have a $10,000 or greater policy to cover your parents final expenses. Saving $10,000 and two dollars a day would take the equivalent of 13 years. Compare that with a simple final expense insurance policy. Click the link to get a quote today.