Are your parents thinking about investing in life cover? They’ll have to take out a policy in their own name, but it is possible for you to pay for their premiums.
Important Things To Know
Most insurers, including MiWayLife, require that the policyholder (the person who takes out the life insurance policy) and the life insured (the person whose life is covered by the policy) be the same person. However, the life insured can then nominate whoever they wish to be the beneficiary of the pay out should they pass away. In short, you can only insure your own life but your beneficiaries can be whoever you please.
This means that, if your parents want to take out life cover, they’d have to the policyholder. Just bear in mind that most insurers have set the age limit at 65 years old. Also, if your parents are over 50, their life insurer will require that they submit their medical history.
That aside, while your parents would be their own policy holders, there’s nothing preventing you paying for their premiums, provided you can show you have an insurable interest.
What is Insurable Interest?
If you’re the premium payer, you have to demonstrate that, should the life assured pass away, you’d suffer financial or emotional hardship as a result of their death. Immediate family members such as a spouse, child, parent, sibling – and even grandchildren and grandparents – are typically approved for insurable interest.
Just remember, as the policy holders, your parents get to choose their beneficiaries,. So, even if you’re paying for your parent’s premiums, you’re not automatically entitled to any pay out should they pass away – unless they name you as a beneficiary in their policy.
A Bit About Funeral Cover
While paying for your parent’s life insurance policy is certainly an option, it’s always best to talk openly and honestly with them about your family’s unique financial situation. As an example, you might find they’re only concerned about not burdening you with funeral expenses. In this case, remember that if you have your own life policy with MiWayLife, you’re allowed to cover your extended family – so you can make provision for funeral costs without the need for multiple individual policies.
At the end of the day, we appreciate that every family’s situation is unique, which is why we suggest contacting us directly for a quote. This way, we can suggest the right type of life insurance cover as well as the best amount of coverage for your needs.
