Life insurance with parents as beneficiaries

[GoodThyming]

I have read that you should buy life insurance if you have a spouse and children (enough that the benefits could help pay their education).

I do not have a spouse or children, but I have been thinking of buying a policy and naming my mother as beneficiary. I think she will struggle financially in her senior years and I will gladly assist her in my lifetime, but what if I don't live.

Has anyone purchased life insurance to benefit parents?

If so, for what term length did you buy it?

[Nishu]

I would have thought it was silly had you asked me, but it does make sense if you think she's going to struggle. I would probably at least consider it in the same situation.

I want to see what other people are going to say...

[Greebo]

I have read that you should buy life insurance if you have a spouse and children (enough that the benefits could help pay their education).

I do not have a spouse or children, but I have been thinking of buying a policy and naming my mother as beneficiary. I think she will struggle financially in her senior years and I will gladly assist her in my lifetime, but what if I don't live.

Has anyone purchased life insurance to benefit parents?

If so, for what term length did you buy it?

The point of life insurance *should* be to replace income/value lost on the death of the person covered for people who depend up on it until such replacement is no longer necessary.

As such, *if* you are going to accept responsibility for your parent, then you should get enough coverage to represent 10x your annual financial value to her. If you supplement her income by $1,000 a month (in cash or services) then you need about $120,000 coverage ($1000*12 months * 10 years).

Of course you should ask yourself - if I do this, am I enabling bad behavior on the part of another adult? If your mother is in difficult straits because of her own poor choices, you may wish to consider whether you're effectively giving a drunk a drink. If you are simply enabling her, then if you die, her getting a large chunk of cash at once isn't going to help her for long.

[Ashley01]

I've never heard of it but if shes going to struggle I think it's a good idea! I think everyone should have a bit of life insurance at least enough for a burial. You don't want to leave that cost burden to anyone so even if you had a small policy to be left to your mother of 30 000 it would cover and expenses and have some extra to help her out. I also don't have term people might not agree I do pay quiet a bit more a month but my parents had term and I saw how hard it was to get a decent rate after their term was up.

[Nishu]

Our life insurance can be paid out in monthly payments. I don't think it has to be a large chunk of money all at once.

[Greebo]

Our life insurance can be paid out in monthly payments. I don't think it has to be a large chunk of money all at once.

Who decides the payout method? You? Or the beneficiary?

[Nishu]

Who decides the payout method? You? Or the beneficiary?

Me.



Plus other words to make my post long enough.

[greekislandgirl]

My parents were the beneficiaries (mother first, then father) on my Roth IRA until I got married. Now my husband is first, and my mother is second. I don't have life insurance nor do I plan to get it, since I'm pretty sure that I cost my husband more than I benefit him, he'll probably save money with me gone LOL.

[McD]

Me.



Plus other words to make my post long enough.

hah. This made me giggle this morning.

The only time my parents have ever been my beneficiaries were prior to getting married when I was required to have life insurance through the military.

I wouldn't have life insurance just to take care of them, though I may have a small policy to cover my funeral expenses.

[MsMarieH]

I would sit down and have a chat with your mother about her financial circumstances. Are you fully aware of all her finances? Perhaps she has money you don't know about.

I had my mother listed as a second beneficiary on my iras/etc. after my husband. In her case though, she actually would have had enough money for herself for a while longer than she ultimately ended up lasting.

[khaski]

I think it's a great idea- lock in a term rate now, while you're younger, and if you meet someone special or have children in 5 or 10 years, it's already in place. If not, your Mom has some help for little $ out of your pocket today.

[lisaflex]

as a broker...i advise against it...you may not like why...she may die before you first off. and, the purpose of life insurance is to provide for those you leave behind..usually spouse and children...and, alot of reputable insurance companies may bawk at your wanting a parent to be the beneficiary. be sure you talk with a reputable broker while doing this. also, if you are "in charge" of how pymnts are paid, do you have a Trust in place? if not, you need one. just my 2 cents

[Hurricane0884]

Interesting thought I have never thought of doing it that way. I have heard of people taking out insurance on their parents with themselves as the beneficiary to "take care of the little brother or sister" has anyone else heard of this?

[GoodThyming]

alot of reputable insurance companies may bawk at your wanting a parent to be the beneficiary.

Why would this be the case? What does it matter who the beneficiary is? I don't know that much about life insurance and am curious as to why this would be a factor in underwriting a policy.

also, if you are "in charge" of how pymnts are paid, do you have a Trust in place? if not, you need one. just my 2 cents

I'm not sure I understand why I need to establish a trust. Can you clarify?

Thanks!

[McD]

If you were concerned that your parent(s) would not make wise financial choices with the life insurance payout (in the event of an addiction, bad financial habits, etc), a trust is a great way to place limitations and roadblocks on the money so that it is not spent quickly.