Burial Insurance for Parents: How to Buy It the Right Way

Can I buy burial insurance for my parents?

Usually, yes. Burial insurance (also called final expense or funeral insurance) is a small whole life insurance policy. Two rules apply whenever you buy life insurance on another person:

• Insurable interest. You must have a real reason to want the person to stay alive, such as a close family bond. Adult children are generally considered to have an insurable interest in their parents.
• Consent. The person being insured must agree and sign the application. Insurers check this, often with a phone call to your parent.

These same rules answer the common question "can you buy burial insurance for someone else?" (full guide) You can, if you have an insurable interest and the person agrees. The rules exist to keep people from buying policies on strangers or on relatives without their knowledge.

Owner, payer, insured, beneficiary: who is who

Who owns the policy matters more than most people expect:

• If you own it, you control it. You choose the beneficiary, and the insurer sends you notices if a payment is missed.
• If your parent owns it, your parent controls it and can change the beneficiary at any time, even if you pay the premiums.

Name a backup (contingent) beneficiary too. If the main beneficiary dies first, the backup receives the money instead of it going through your parent's estate.

How to buy burial insurance for a parent, step by step

1. Talk with your parent first. Explain why, and ask what they want for their funeral. Applying, and using the policy later, goes more smoothly when everyone agrees.
2. Check what already exists. Look for old life insurance, policies from a former job or union, a prepaid funeral contract, or bank accounts set aside for the funeral.
3. Pick a coverage amount. Estimate the funeral your parent wants with our funeral cost calculator, then subtract savings already set aside. See funeral costs for typical price items.
4. Decide who will own and pay. Agree on this with your parent and any siblings before you apply.
5. Apply with your parent present. Your parent answers the health questions and signs. Many applications are done by phone with everyone on the line.
6. Set up payment from your account. Automatic bank drafts reduce the chance of a missed payment.
7. Keep the policy where you can find it. Store a copy with your own papers, and note the insurer's claim phone number. The FTC advises against keeping the only copy of funeral papers in a safe deposit box, which may be hard to open on a weekend or holiday.

What your parent needs to do

• Agree to be insured and sign the application, on paper or electronically.
• Answer the health questions honestly. Most policies can be challenged during the first two years if the application left out important facts.
• Be available for a short phone interview if the insurer asks for one.
• Share basic details, such as date of birth, medications and doctors, if asked. Many insurers also check prescription history with permission.

Underwriting is usually based on the health questions, and your parent can usually answer them from home.

How your parent's age and health change the options

Each insurer sets its own maximum age for new policies, and many stop somewhere in the 80s. The older your parent is, the fewer choices and the higher the price. See our guides for over 70, over 80 and over 85. If your parent has health problems, see burial insurance with pre-existing conditions.

What if my parent has dementia or cannot sign?

If your parent can no longer understand what they are signing, many insurers will not issue a new policy. Some may accept a signature from someone with legal authority, such as a person named in a power of attorney, but this varies a lot by company and state. Ask the insurer before you apply.

If a new policy is not possible, other ways to plan include a prepaid funeral plan arranged with a funeral home, or money set aside in a burial trust fund. If your parent receives SSI, see how SSI burial funds work.

When siblings share the cost

Family members often split the premium. A policy can have only one owner, though, so agree on a few things in writing first:

• Who owns the policy and who is the beneficiary.
• How each person's share is paid, and what happens if someone stops paying.
• How the money will be used, and what happens to any money left after the funeral.

Some families name more than one beneficiary with set shares. Others name one person who agrees to pay the funeral home and share the rest. Either way, clear agreement now can help prevent conflict later.

When a policy for a parent may not make sense

• Your parent already has enough life insurance or savings for the funeral.
• Your parent has a terminal illness. A new policy will likely have a waiting period, so savings or a prepaid plan may work better. See terminal illness.
• The premiums would strain your budget. If payments stop, the coverage can end.
• Your parent is in their late 80s or older. Choices are limited, and total premiums can add up to more than the benefit. Is burial insurance worth it? walks through the math.

If a parent has already died without coverage, see how to pay for a funeral. The NAIC also runs a free Life Insurance Policy Locator that can help families find policies a parent may have owned.

If your parents don't have burial insurance

Many families learn there is no policy only after a parent dies. If that happens, these steps can help:

1. Search for a policy you may not know about. Check papers, mail and bank statements for premium payments, and ask former employers or unions. The NAIC's free Life Insurance Policy Locator lets you submit a request using details from the death certificate. If a policy is found and you are the beneficiary, the insurer contacts you directly.
2. Ask for itemized prices. Under the FTC Funeral Rule, funeral homes must give you an itemized General Price List, and you can choose only the goods and services you want. A direct cremation or a smaller service can lower the bill.
3. Check benefits. Social Security pays a one-time $255 to an eligible surviving spouse or child. If your parent was a veteran, see veterans burial benefits. Medicare does not pay for funerals.
4. Look at other ways to pay. See how to pay for a funeral for options such as payable-on-death accounts and local assistance.

If your parents are living and have no coverage, the steps above in this guide apply. Talking about it now gives everyone more choices.

What to ask a Licensed Insurance Agent

1. Can I be the owner and payer, with my parent as the insured?
2. Does my parent need to be on the phone, and will there be an interview?
3. Based on my parent's age and health, is a level policy with no waiting period likely?
4. What is the maximum age this insurer accepts, and does my parent's next birthday matter?
5. Is the premium locked in for life, and what is the grace period for a late payment?
6. What happens if my parent cannot sign because of memory problems?

You can talk with a Licensed Insurance Agent with your parent, or start with our policy quiz. We explain how we are paid on our how we make money page.