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Guide to Buying Burial Insurance for Your Parents

Written by Anthony Martin
Licensed Agent

Fact Checked by Jeff Root & David Duford

Licensed Agents & Life Insurance Experts

First of all, yes you can get final expense insurance on your parents.

If you want coverage on your mom or dad (or your grandparents), you came to the right place.

In this article, you’ll learn how these plans work, see real prices, how the application process works, how to get find the best plan and much more.

Feel free to click a link below to jump to whichever section might interest you most or just read on.

Topics Covered In This Article

Can You Get Burial Insurance For Parents?

Yes you can buy burial insurance for your parents. It’s actually quite common for kids to buy parental coverage to cover their final expenses which can easily exceed $10,000. They must sign the application and agree to the coverage. You can be the owner, payer, and beneficiary since you’re paying the premiums.

How Final Expense Policies Work

These plans are small whole life insurance policies that have small coverage options between $2,000-$40,000. Premiums are affordable, exams aren’t required, and health issues won’t preclude them from qualifying.

Upon passing, they pay out a tax-free check to pay for funeral and other final expenses. Any money leftover stays with the beneficiary(s).

Understanding the fine print of these policies is easy. Since they’re whole life insurance, here’s a full summary of how they work.

That’s literally all there is to these plans. You need not be concerned this is some hidden clause or fine print somewhere that will come back to haunt you.

It’s important to remember that you will also hear “burial insurance” commonly referred to as final expense insurance or funeral insurance. All three of these terms have the same meaning.

There Are Two Requirements

Burial insurance is life insurance. As such, it’s governed by the same rules and regulations. If you are interesting in purchasing a funeral insurance policy for your parents, there are some requirements you will have to satisfy.

Thankfully, these requirements are simple, and almost never an issue. However, we reveal these to you now, so you know what to expect before you pick up that phone.

1) Insurable interest

Fortunately, this first requirement is satisfied by the mere nature of your relationship. Life insurance companies require insurable interest if you are going to take out a funeral policy on parents.

In layman’s terms, insurable interest means that you would have a financial loss if your parents were to pass away.

Obviously, you being stuck with upwards of $10,000 in funeral bills is obvious evidence that you would incur a financial loss in the event of your parent(s) passing.

Here’s the bottom line

No burial insurance company will ever question you or require any sort of documentation to address the issue of insurable interest. Because you are related, that satisfies the requirement.

Sometimes we contemplate deleting this section altogether since it’s a non issue. However, we just like to give everyone a behind the scenes understanding of how this stuff works for the sake of transparency.

2) Consent to review medical history

In order to get your parents approved for a burial policy, the insurance company will need to assess their health. Then they can medically determine if they are eligible for coverage.

 

Remember though, at no point will your parents have to endure a physical or medical exam.

They just need to answer health questions and agree to allow the insurance company to access their medical history to determine if they’re eligible.

HIPPA laws are very strict in the USA. You cannot give an insurance company consent to review your parents protected health information. Only the proposed insured (your parents) can do that.

If you wish to buy some burial insurance coverage for your parents, they will need to give the insurance company authorization to review their medication history.

What To Do If Your Parent’s Won’t Give The Insurance Company Consent To Review Their Health Data?

In this circumstance, you will not be able to get life coverage for your parents that protects them immediately.

Your only option in this situation would be to take out a guaranteed issue life insurance policy. This kind of policy has no medical underwriting at all. They literally just issue the policy to anyone who applies as long as they meet the age requirements.

However, they will still need to agree to having the coverage issued.

Bear in mind that guaranteed issue life insurance has two big drawbacks.

  1. They are much more expensive
  2. The policy does not pay out benefits if death occurs during the first 2 years

Obviously, those are pretty bad concessions to make if you don’t have to. This is why you should always try your hardest to obtain a policy that does assess your parent’s health.

Hopefully your parents won’t object to the insurance company reviewing their prescription history. It will mean substantially lower rates, and coverage that protects them in full immediately.

If they won’t do that, a guarantee issue policy is your only option.

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