5 Best Life Insurance Companies for Parents | 2024 (2024)

Based on an analysis of life insurance companies, which considered factors such as coverage options, cost and the ability to customize a policy, our top picks for parents are:

• Banner Life: Our top pick
• Mutual of Omaha: Best for no-exam coverage
• Nationwide: Best for whole life insurance
• Fidelity Life: Best for seniors
• Gerber Life: Best permanent coverage for children

Buying life insurance for family members can be a thoughtful way to protect all of your loved ones from an unexpected passing in the family. But it’s important to work directly with your parents when sorting through the variety of types and policies, not to mention coverage amounts. Here are some suggestions about how to talk to your parents about buying a policy for them and how to gain their consent:

• Explain the benefits of a life insurance policy: Remember that your parents may not be aware of how much peace of mind the right insurance plan can bring. Start by explaining why you think insurance is important and what it can cover. Expenses you might want to highlight include potential final expense costs, funeral expenses, outstanding debts and financial obligations. Help them to understand how life insurance can help the financial security of you and other loved ones.

• Discuss life insurance options: Explain the differences between a term and permanent life insurance policy, and include information about how the type of plan affects premium costs. Discuss the benefits and drawbacks of each type of policy, the period of time when each policy choice offers coverage and which type may best suit them.

• Provide information on the insurance company and policy: Do your homework before talking to your parents. It’ll show that you’ve considered their needs when recommending life insurance. Research, then select a reputable company and policy that meets your parents’ needs and budget. If you aren’t sure where to begin, check out the MarketWatch Guides team’s review of the best life insurance companies for senior citizens.
• Explain the terms, including the coverage amount, premium payments and any exclusions or limitations: Don’t forget to explain exactly who will qualify for an insurance payout and under what circ*mstances money is to be distributed. Point out the policyholder and beneficiary, and note any special rules under which the death benefit can be split or accessed when your parents are still alive. A family financial advisor can be helpful in explaining the investment component of whole life insurance policies.
• Address any concerns or questions: Encourage your parents to ask questions. Address any concerns they have. Make sure they understand the terms and conditions of the policy before making a decision and offer to set them up with a meeting with an insurance agent if they have questions you can’t answer.

• Obtain written consent: Once your parents agree to buy life insurance, obtain their written consent. This may include signing a consent form or providing a signature on the insurance application.

While buying life insurance for your parents is a wise financial decision in most cases, it’s not something that you can do without their consent. You’ll only be able to purchase a policy that provides a death benefit when your parents pass away if they sign off to be the policyholder.

Choosing the best life insurance plan for your parents can be complex. It requires careful consideration of their current and future financial needs and any health issues. Your parents’ wishes and personal preferences are also important because they must agree to be policyholders.

The first thing you’ll want to consider when choosing a plan for your parents is whether a term life insurance policy or whole life plan is best for their needs. Term life insurance provides coverage for a specific period, while permanent life insurance covers the policyholder’s entire lifetime. Term policies are more affordable and suitable for those who want coverage for a specific period. Permanent policies offer lifelong coverage but tend to be more expensive. They also include a cash value component, which can be useful if your parents are fluent investors or may need to borrow against the policy in the future.

Read more: Our Picks For Term Life Insurance Companies

After selecting the type of coverage, select a death benefit. You’ll also want to explore options like living benefits and the insurance investment options you have access to if you choose a variable or universal life insurance policy. If you are financially dependent on your parents, it’s important to consider their life insurance needs in the context of your own financial needs. Make sure that the coverage amount is sufficient to meet both your parents’ needs and your own.

As a general rule, the average cost of buying life insurance for a parent will cost between $50 to $250 monthly for $10,000 to $50,000 in term life coverage. A whole life policy or a policy with a higher death benefit will be significantly more per month to maintain.

Buying life insurance for older adults is more expensive for a few reasons. Here’s what determines the cost:

• Age: Your parents’ age plays a significant role in their premium rates. As people get older, the cost of life insurance increases because they’re more likely to pass away during the policy term.
• Health: If you’re considering whole life insurance coverage, your parents will likely need a medical exam before being approved for insurance. Previous and current health issues increase the price.
• Coverage type and death benefit: Permanent life insurance policies guarantee a payout as long as premiums get paid. This means they’re riskier for insurers. That increased risk increases the cost. You should also expect to pay more if you select a term policy with a higher death benefit.

Buying life insurance when your parents are younger can be advantageous because pricing is usually lower when you lock into coverage younger. Age often correlates with health, and premiums are often more affordable when people are younger and in good health. If your parents are considering life insurance, it may be beneficial to start collecting life insurance quotes sooner rather than later.

Methodology: Our System for Rating Life Insurance Companies

Our team researches and ranks life insurance companies using an in-depth scoring system that considers the factors most important to consumers like you. Our analysis includes a comprehensive review of each provider we feature based on available coverage, customizability, availability, customer service and company reputation. Here are the factors we take into consideration when rating life insurance providers:

• Brand trust (40%): Life insurance payouts can exceed $100,000 or more, which makes choosing a reputable and trustworthy insurance provider important. To assess brand trust, we use J.D. Power and Associates customer satisfaction surveys, AM Best credit rating scores and the National Association of Insurance Commissioners (NAIC) complaint index. The higher a company scores in each area, the more points it receives.
• Coverage (33%): The more policy options a life insurance company offers, the more opportunities you have to obtain the right coverage for your specific needs. For this reason, we give companies the most points for offering multiple types of life insurance, including various term, permanent and no-exam options.
• Availability and ease of use (19%): Since life insurance coverage options can be complex, we consider the ways a customer can reach a company — and how easy communication is. For this category, we research how many communication channels a company offers for general customer support, claims processing and the application process. Companies earn the most points for offering various ways to interact with an agent, both in-person and online.
• Riders (8%): Companies offering various life insurance riders or endorsem*nts allow policyholders to better customize their coverage. In this category, we determine how many riders a company offers and award the most points to providers with more than 10 options.