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How to buy life insurance for your parents

A handy guide to buying life insurance for your parents.

Buying life insurance for your parents can provide peace of mind and financial security for both you and your folks. So long as you follow the proper steps, you should have no bother taking out a policy on their behalf.

Can I buy life insurance for my parents?

Yes, but there are a couple of things that you'll need to do.

  • Get their consent. You can't buy life insurance for anyone without their knowledge; that includes your parents. You'll need to get their written consent when you buy a policy for them.
  • Prove that you have an "insurable interest". To be able to get life insurance for your parents, you need to be able to show that their death would cause you to suffer financially. In other words, you need to show that there are debts and expenses you'd need to pay if they died.

How to buy a life insurance policy for your parents

Follow these steps when buying a life insurance policy for your parents.

  • Calculate how much money you will need. You need to work out how much you'll need to pay off all their debts. This means you'll need to add up their debts, including any mortgages and loans, plus find out their assets and savings. You can use our life insurance calculator to help you get started.
  • Choose between term and whole life insurance. Term lasts a set period of time and so is almost always cheaper, while whole life insurance provides lifelong coverage. If you want to guarantee that their debts will be cleared by a policy, then whole life insurance may be a better option in this situation.
  • Shop around. This is the part we've made simple. You can compare life insurance policies for seniors side by side here to get a clear sense of how brands stack up against one another.
  • Select the beneficiaries. This is the person or persons who receive the payout. You need to get your parents' final say on the beneficiaries, though presumably it will be you.
  • Apply. Once you've figured out all the above details, you can apply for a life insurance policy on your parents' behalf. Be sure to submit everything that the insurer asks for.

Can I still buy a policy for my parents if they're in poor health?

Yes, but it can make things a little trickier. If they're in poor health, some insurers will refuse to cover them, so you may need to get life insurance through a provider that specialises in high-risk individuals.

If you're eager to get cover then look at guaranteed insurance, which doesn't require any medical questions. Be warned though, it can be very expensive when compared to other policies.

Medical conditions that can make it difficult, but not impossible, to get life insurance include:

  • Cancer
  • Kidney or liver disease
  • Heart attacks
  • Strokes
  • Sleep apnea
  • High blood pressure and high cholesterol

Why consider taking out a life insurance policy for your parents?

There are lots of reasons why you should seriously consider taking out a life insurance policy for your folks. Here are just a few:

  • Debt. Any debt that your parents have will be passed on to you when they die. This includes everything from car loan payments to credit card bills.
  • Provides you and your parents with peace of mind. Your parents don't want to leave you with any financial burdens when they pass away, and you don't want to deal with it either. Life insurance provides peace of mind knowing that finances are the last thing you'll have to think about when the day comes.
  • Paying for the funeral. Funerals can cost anywhere from around $4,000 to over $15,000 in Australia which is not cheap. A policy for your parents can cover that as an add on, so keep an eye out for it when you're shopping around.
  • Inheritance. All parents want to give their kids a better life than they had. A life insurance policy is a nice way for them to ensure that they leave you with something.

Are there any exclusions I need to be aware of?

There are general exclusions, which apply to all policies, and there are also often specific exclusions that apply to individual policies.

General exclusions include:
  • Suicide and self-harm are not covered within the first 13 months of coverage.
  • Criminal activity, for example, any injuries or death which occur during you doing anything illegal.
  • Recklessness, negligence and unreasonable behaviour. For example, unsafe driving, failure to take proper safety precautions or not seeking medical attention for a clear health issue.
Specific exclusions can include:
  • No cover for pre-existing conditions. This can include ongoing health conditions, such as diabetes, or an illness which might recur, like cancer. In some cases, this condition may be specifically excluded from cover.

Bottom Line

Losing your parents is tough no matter how old you are. Being burdened with debts, loans and expenses is something you can do without. Luckily, you can take care of the financial side of things by buying life insurance for your parents.

Compare direct life insurance options

Name Product Maximum Cover Maximum Entry Age Terminal Illness Benefit Claims Acceptance Rate Average Claim Time Sum Insured
NobleOak Life Insurance
Finder AwardBonus
NobleOak Life Insurance
1.1 months
$24,483 million
Our verdict: Finder Life Insurance Award winner for the last 5 years in a row. Good value for money, simple application process and a high claims acceptance rate.

⭐ Current offer: Get two months free on all cover types apply by 14 June 2024. T&Cs apply.
Medibank Life Insurance
Data not available
Data not available
Data not available
Our verdict: Medibank offers a higher payout limit ($2.5 million) than 15 other providers. Get a 10% discount if you're already a Medibank Health Insurance member.

⭐ Current offer: Save 10% on your first year of Medibank Life Insurance when you apply by 1 July 2024. T&Cs apply.
TAL Accelerated Protection Life Insurance
No set limit
Not stated
Data not available
1 months
$249,285 million
Our verdict: One of Australia's leading life insurers. Automatically includes child critical illness cover. Plus, it comes with a level premium option (e.g. costs remain similar as you get older).

⭐ Current offer: Get up to 15% off your TAL Life, Trauma or TPD insurance policy for life - if you have a Body Mass Index (BMI) between 19 and 28 at the time of your application. Offer T&Cs on insurer website apply.
RACWA Life Insurance
1.1 months
$24,483 million
Our verdict: RAC’s maximum death cover limit of $25 million is one of the highest limits you’ll find, including $5 million in TPD insurance. You can get an online quote, but you’ll need to call RAC to get trauma cover. Benefit from added peace of mind with fully underwritten insurance. RAC is also WA-based but services all of Australia.

⭐ Current offer: Get two months free when you apply for two or more RAC Life Insurance covers by 30 June 2024. T&Cs apply.
ahm Life Insurance
Data not available
Data not available
Data not available
Our verdict: ahm offers a simple application process. You can be approved online or over the phone. There are no medical or blood tests needed.

⭐ Current offer: Get 10% off your first year of ahm Life Insurance when you apply by 1 July 2024. T&Cs apply.
AAMI Life Insurance
Data not available
3.1 months
$37,768 million
Our verdict: There’s flexibility with AAMI as you can add another adult to your cover, with a competitive limit of $1.5 million. Easy application process with no medical exams.

⭐ Current offer: Take out a new AAMI Life Insurance policy and get $100 eGift card after your first 4 months of cover. T&Cs apply. Ends June 30, 2024.
Suncorp Life Insurance
Data not available
3.1 months
$37,768 million
Our verdict: Competitive maximum cover limit of $1.5 million. Suncorp lets you change your cover amount by up to $100,000 after a big life event, such as having a baby.

⭐ Current offer: Take out a new Suncorp Life Insurance policy and get $100 eGift card after your first 4 months of cover. T&Cs apply. Ends June 30, 2024.
Real Family Life Cover
2.4 months
$53,238 million
Our verdict: The application is simple; it can be done with 1 phone call and there are no medical exams. But households with larger debts may need more than a $1 million payout.

⭐ Current offer: Get back 10% of the premiums you’ve paid after 1 year.
Zurich Ezicover Life Insurance
3 months
$24,495 million
Our verdict: Good if you want a cheap policy from a well-regarded insurer – its 98% claims acceptance rate is higher than any other provider on Finder. Zurich keeps things simple: unlike others, it doesn’t go in for optional add-ons such as TPD or trauma cover.

⭐ Current offer: Policy discounts include 10% off for your partner if you sign up for a joint policy. You can also get 5% off income protection if you buy it alongside your life cover.

Why compare life insurance with Finder?

  • You pay the same price as buying directly from the life insurer.

  • We're not owned by an insurer (unlike other comparison sites).

  • We've done 100+ hours of policy research to help you understand what you're comparing.

Why you can trust Finder's life insurance experts

freeYou pay nothing. Finder is free to use. And you pay the same as going direct. No markups, no hidden fees.
expert adviceYou save time. We spend 100s of hours researching life insurance so you can sort the gold from the junk faster.
independentYou can trust us. We say it like it is. We aren't owned by an insurer and our opinions are our own.

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