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This Article Will Cover The Process In Which You Can Purchase Life Insurance For Your Grown Child
Most likely you’re here reading this article because you’re concerned about having life insurance for your grown child.
You don’t want them to pass away and leave behind final expenses that you, their spouse, or their children would be responsible for.
You want to help them out by purchasing a life insurance product to give them coverage should they happen to pass away earlier than expected.
This article will detail a nine-step process to follow in order to get life insurance for adult children.
My goal is to help you completely understand the process so you can get the best kind of life insurance coverage in place for your son or daughter.
NOTE: Would you prefer me to present this information to you in video format?
Watch the video below for the complete presentation. Enjoy!
The Topics We’ll Discuss Are As Follows:
When you’re looking for life insurance for adult children it’s really important to define and solidify in your mind why you want to purchase life insurance coverage.
There are all sorts of reasons why a parent would be interested in purchasing life insurance for a grown child. Typically it stems around one of the following reasons:
Taking care of final expenses
Maybe you’re concerned about your child being in a particular situation or you worry about the potential risk of them dying and leaving behind a final burial cost that you will have to shoulder.
Qualifying and getting a life insurance plan helps solve this financial risk to you and your child’s family and alleviates any sort of debts that may be accrued.
Family left behind
Maybe another thought that’s run through your head is that if your grown son or daughter passes away and leaves behind children without a father or mother, those children would face financial difficulty.
Taking out a life insurance policy on your grown child can not only cover expenses, but also ensure your grandkid’s financial welfare is taken care of.
One difficulty of purchasing life insurance on somebody not directly dependent upon you is that you cannot qualify someone for life insurance without gaining their prior approval.
Why is this the case?
According to HIPPA rules, adults have protection over the privacy of their own health information.
When you apply for life insurance coverage, you also give consent for the life insurance company to access medical records.
This means parents cannot give consent to health records if their children are grown without first gaining the consent of the child.
You as the parent do have the ability, with the child’s consent of course, to be the payer, or owner, of the policy.
This means you can determine, as the person in charge of the policy, who the beneficiary is and what the details of the policy are.
Their Permission Is Required
Just keep in mind that before you attempt to take a life insurance policy out on somebody, that you always have a discussion with them first.
Explain what you’re thinking about doing, what you’d like to accomplish, and the reasons why you want to get insurance coverage for them.
As an agent who has worked in the insurance business for many years, I have witnessed situations where the child got spooked by the parent trying to insure them without their permission.
There may be conflict in the relationship and understandably the child views this move as highly suspicious, even if the intentions are good.
My experience is that most parents buy life insurance for a grown child because they want to take care of final expenses.
If their child happens to die earlier than expected, they want to help their surviving grandchildren and the spouse.
The next step in this process is to take those reasons and further clarify the amount of coverage necessary to take care of that need.
Let me give you an example of how a goal for insurance for adult children might pan out.
You can certainly opt for more coverage for final expenses if you wish.
Given the fact that the cost of living continues to go up, the cost of burial is also increasing, so this isn’t a bad idea.
Many parents go with an amount between $10,000 – $25,000.
If your goal is to take care of final expenses, Buy Life Insurance for Burial can help:
- We work with the most competitive burial final expense insurance companies.
- We can give you a fair quote for life insurance coverage to help you accomplish the goals you have in mind.
If your goal is income replacement, generally it’s best to have a policy that is 10 times your annual income:
- If your son or daughter makes $30,000 a year, a $300,000 life insurance plan would take care of most debts and obligations.
Finding a broker is one of the most important steps you can take in the process of buying life insurance for your grown child.
A broker is in the unique position of being able to offer a multitude of life insurance companies to their client so that they can shop around to find the best price and coverage.
If you’re like most of my clients, you don’t want to pay more for your life insurance coverage than you have to.
You want to make sure you get the best deal, as well as great coverage, for your grown child.
Captive agents are the opposite of a broker.
A captive agent only works with one life insurance company, which means:
- Limited coverage options
- Limited flexibility when it comes to coverage with health issues
- Limited price options
Some life insurance companies are more strict about certain health ailments and lifestyle choices.
This potentially means your rates could be so high they are not affordable.
There are many advantages to working with a broker:
- They have access to a larger number of insurance products and companies.
- They can talk with the underwriters to establish who is going to offer the best product based on your grown child’s unique health and lifestyle profile.
- They can compare prices and find the best price to match your budget.
The reason we do this is because we want to give your grown child the best chance of getting insured at the best price.
Once we have your son or daughter’s information, we find the top three companies that will provide the best pricing and coverage.
Deciding whether or not to take an exam can be a little bit tricky. Luckily an exam isn’t necessarily required.
Exams generally require the following:
- Blood withdrawal
- Blood pressure check
- General questionnaire
All of this is designed to give the most accurate records to the life insurance underwriters. Ultimately, the decision is up to your child.
Exams complicate matters
Sometimes grown adults don’t want to do an exam, and other times they are willing to do the exam but don’t follow up with setting up an exam time, so it doesn’t get taken care of.
This is where a non-medical life insurance policy comes in handy and probably is more sensible in a situation where the parent is buying the life insurance on a grown child.
It especially makes sense to do a non-medical application if the life insurance policy is under $500,000 in coverage.
At that amount of coverage an exam is unlikely to result in a substantially lower premium.
An exam may save you an extra $5 to $10 a month.
But some parents may find getting their grown child to complete an exam, especially if they’re out of state and hard to reach, too much of a hassle to make it worth the effort.
Get Insurance With No Exam
That’s why I would recommend looking at a non-medical application where the exam isn’t necessary.
Alternatively, if you’re looking for a final expense life insurance plan, the good news is that most of those types of plans do not require any sort of exam.
They may require your child’s signature to authorize the application and the medical record search though.
They may also require a phone interview, but the process is much less complex than it would be with an exam.
Ultimately, my goals are to get you the best price and coverage as soon as possible. Sometimes taking the easier route to reach those goals just makes more sense.
Since you’re most likely going to pay for life insurance for your grown child, it’s likely that you will be the beneficiary.
That’s totally fine.
However, you may want to name other people as beneficiaries as well, whether that’s your child’s spouse or children.
Keep in mind, circumstances change.
I have encountered circumstances where people have died and their ex-spouse was still their beneficiary though they had remarried.
There are a number of reasons why you should always have a plan b when you apply for insurance for adult children.
If your child has health problems, has a criminal record, misdemeanours or traffic issues you may run into problems getting their application approved.
Think about the worst case scenario and have a backup plan in place.
If you apply for a final expense life insurance plan for your grown child, it’s likely you’ll get a decision same day or within the next day or two.
If you go the route of a non-medical life insurance plan to replace his or her income, it’s likely going to take somewhere between several days to several weeks, depending on what information is requested, before you are given a decision.
Either way, be patient. Odds are you will get a positive result and can gain peace of mind in knowing your grown child is covered.
Get a quote now for life insurance on your adult child now. Call 888-626-0439 or request a quote at the side or top of your screen.