Can you insure your parents?

Can I get life insurance for my parents without an insurable interest? 

No, you can’t get life insurance for your parents unless you can prove you have an insurable interest in them. However, there are still ways you can support them using your own policy. 

Every person has an ‘insurance interest’ in their own lives. And you can, of course, apply for life insurance cover for yourself, which could also help your parents if anything was to happen to you.

If your parents were listed as beneficiaries of your life insurance policy, then they would receive a payout in the event of an approved claim after your death. The beneficiaries of your policy may be named in your will, or by placing the life insurance policy in trust. 

If the policy is in trust, then you know that the proceeds will go where you want them to, allowing your parents to manage, should the worst happen.

Life is full of important conversations, and one of those might be talking with your parents about their future plans. It’s not uncommon for people to want to get their affairs in order, especially as they get older. This may include discussing the possibility of them taking out life insurance, which might be an over 50s policy. 

Talking about death, or the ins-and-outs of finances after a passing, can feel difficult. But helping your parents as they consider their life insurance options starts with having a conversation – then they can decide what to do from there. 

It’s important to clarify that there’s a big difference between taking out insurance on your parents’ lives, and helping them to arrange their own life insurance. And you can only take out insurance on them if you have an insurable interest, as discussed earlier.

Key factors to consider

If your parents are looking for your help in arranging life insurance for them, you could talk them through the following questions:

• Do your parents already have a life insurance policy?
• Have your parents paid off their mortgage?
• Is one of your parents financially dependent on the other?
• Are there any outstanding debts or loans one or both of your parents have?
• What assets do your parents have? Consider things such as property or savings as well.
• Do your parents have any financial dependants, such as young children, grandchildren or other relatives?
• Would their estate be liable for Inheritance Tax? IHT is charged at 40% on estates totalling more than £325,000 (per parent, or £650,000 for both).

While you may not always be able to arrange insurance for your parents directly, having conversations like these puts all the cards on the table, so everyone knows where things stand. That means you can determine your next move as a family and provide comfort and assurance to those who matter most.

If they are aged over 50 and are younger than 80, then over 50s life insurance may be a suitable option for them, a policy for people wanting to leave a small cash sum as a gift or to be put towards funeral costs. 

If your parents decide that life insurance is the right choice for them, an over 50s life insurance policy might be suitable. It is a single life policy that covers them for the rest of their lives – as long as they take the policy out between the ages of 50 and 80.

Whether your parents want to leave a bit of money behind for their partner or their family, Over 50s life insurance can be a way to do just that when they pass.

Sainsbury’s Bank offer two types of Over 50s plan to choose from – fixed or increasing:

Fixed Plan

With over 50s fixed life insurance, you can leave a small fixed cash amount to your loved ones when you pass. It’s a fixed payout, with a set premium based on what you can comfortably afford. An over 50s fixed plan is a simple way to plan for the future, without any changes. 

But a fixed plan doesn’t increase with inflation. If the cost of living increases over the years, your payout amount will remain the same as when you first took out the policy. 

Increasing Plan

When you choose an over 50s increasing plan, your cash sum rises with inflation as determined by the Retail Price Index (RPI). An increasing plan is designed to help with the rising cost of everyday goods and services, thereby reducing the impact of inflation on your potential payout. With this type of plan, your payout increases year-on-year, but so do your premiums.