Buying Life Insurance and Funeral Insurance for Parents?
January 20, 2015 2:51 PM   Subscribe

Is there a way I can purchase life insurance and/or funeral insurance for my parents, and if so, which would be the best way to do it?

My parents are in their 70s and their financial affairs are a mess. They're in massive amounts of debt, living off credit because my brother who is a drug addict has siphoned all their money from them. After a close friend of mine died recently and left no will or final instructions, I realized how devastated I would be if one or both of my parents died, not only because of the unbearable grief I'd be dealing with, but because I'd need to pay for the funeral and sort out their affairs on top of it. And on my salary, there's no way I could pay for it. I couldn't even deal with a crowdfunding campaign, if it came to that.

Is there a way I can purchase life insurance and/or funeral insurance for my parents, and if so, which would be the best way to do this? I'm particularly looking for trustworthy, credible companies that are affordable and deliver in the end.
posted by anonymous to Work & Money (4 answers total) 3 users marked this as a favorite
For funeral insurance, the word they use for this is "pre-need." In my parent's case, I prepaid and selected the services I needed, and then we went back after my parent passed away and then paid for the reception etc.

I'm not sure where you're based, but I'm based in the western US. I made arrangements through one of the larger funeral homes in my town, which in turn was part of a larger network (called Dignity, I believe). This meant that if my folks moved away in the meantime, the fees would apply to whatever funeral home in the network we wanted to use. When my parent passed away, the nurse asked us if we had a funeral home selected. We gave her the name and the services went very smoothly. This was my one and only experience setting up such a thing, so I can't compare it to anything else. It was fine. People were kind and respectful in helping us.

The sales process was... it was a sales process. But in my case, the arrangements were pretty simple (cremation, urn, and then a memorial service we paid for separately). A big, full-court funeral can cost thousands and thousands. YMMV.
posted by mochapickle at 3:20 PM on January 20, 2015 [2 favorites]

On the life insurance angle: You can take out insurance on them if you demonstrate a need, which you certainly will do. The company/agent will have a form for you to fill out.

What state do you live in? Usually there are 1-2 companies that tend to be competitive when independent agents in your area send out quote requests, and have a reputation for service. In my area (Midwest), it's often Pekin Insurance. They'll all pay and have reinsurers covering their own assets, though the big ones like Allstate, Metlife, John Hancock, etc. tend to be a bit more rapid-response with the check (and also cost more.)

It will be expensive. For the cost of two term policies on 70-year-old people you could probably save up for their funerals in a few years, and there's a chance the insurance will expire without their using it (they will not qualify for a long term), so if you were willing to make room in your budget for insurance, consider an automatic withdrawal into a savings account for about the same amount. But, if your parents are less healthy than they look on paper/blood test, then the life insurance may be the way to go -- and if lawyers are going to be involved and they won't have any cash, especially so. If you need the insurance, then you'll still be wanting to save up for when the term expires, but at least you'll have a 10-year window where you know things will go smoothly no matter how little you have.
posted by michaelh at 3:28 PM on January 20, 2015

Life insurance for someone in their 70's tends to be crazy expensive. If it is not, it probably pays either very little money or under very limited circumstances (like if they die in a plane crash on a Tuesday at noon -- I am only exaggerating a little here).

So I will second the suggestion of looking into a prepaid funeral.
posted by Michele in California at 3:32 PM on January 20, 2015 [4 favorites]

Your parents can default on their debt, so that's not an issue. You can offer to help them with setting things in order and let them know that while you don't expect anything bad to happen, it wouldn't be a bad idea if you were on their accounts in case you ever needed to help them with anything. My sister is on all of my parents accounts, including the bank account. I know where my MIL keeps the safety deposit key.

You can pre-pay funerals, or donate your body to science, or just go with a simple cremation. Have you discussed this with them? What are their wishes? In my and Husbunny's family we talk about stuff like this all the time. My parents signed up and prepaid with the Neptune Society. All we have to do is make a phone call.

My MIL has told us what her wishes are and the plot is all ready to go. I want to donate my body to science. Husbunny will be buried with his family.

Also, before the sun sets tomorrow, you need to sort out Living Wills, Durable Powers of Attorney and any other end of life paperwork.

Sorting it all out now will save you when you need it most. Dave Ramsey called it the Legacy Drawer. Make sure you've got your affairs in order as well.
posted by Ruthless Bunny at 5:05 PM on January 20, 2015 [1 favorite]

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