Can I Put Life Insurance on My Father?

Obtaining a life insurance policy on a parent is a common consideration for individuals seeking to provide financial security for their family. While possible, the process involves specific requirements and considerations. This article guides you through securing life insurance coverage for your father.

Establishing Insurable Interest

A fundamental requirement for placing life insurance on another individual, including a parent, is demonstrating “insurable interest.” This concept signifies a legitimate financial or emotional stake in the continued life of the insured person, meaning you would experience a financial loss or hardship upon their death. Without this demonstrable interest, an insurance company will not issue a policy.

For a child seeking to insure a parent, insurable interest often arises from a reasonable expectation of financial loss. This can include situations where the child provides financial support to the parent, such as covering living expenses, medical bills, or general caregiving costs. Another common scenario involves the financial burden associated with end-of-life expenses; funeral and burial costs can range significantly, with median costs for a funeral with burial around $8,300.

Beyond financial dependence, the expectation of incurring significant expenses, such as covering substantial funeral costs, can establish insurable interest. The parent’s consent is also a prerequisite for obtaining a policy on their life. Insurance companies generally require the proposed insured to agree to the coverage, often by signing specific paperwork, ensuring transparency.

Applying for a Life Insurance Policy

Once insurable interest is established, the practical steps of applying for a life insurance policy begin. This process requires gathering comprehensive information from both the applicant (the child) and the proposed insured (the father). The applicant provides personal details and financial information, which helps the insurer assess their ability to pay premiums.

The father, as the proposed insured, provides extensive personal details, including his full name, date of birth, and Social Security Number. A thorough medical history is also required, encompassing current health conditions, past diagnoses, medications, and family medical history. Information about lifestyle factors, such as smoking habits, alcohol consumption, and any hazardous hobbies, is also collected to assess risk.

A medical examination for the father is usually a standard part of the application process. This exam, typically covered by the insurer, involves taking vital signs, height, weight, and collecting blood and urine samples. These samples are tested for various health indicators, including cholesterol, blood sugar levels, and nicotine, providing underwriters with essential data to evaluate the risk and determine the appropriate premium rates.

After all information and medical results are collected, the application enters the underwriting phase. During this period, which can take several weeks, the insurer’s underwriting team assesses the overall risk profile based on the provided health, financial, and lifestyle information. This assessment determines eligibility for coverage and the final premium amount.

Managing Policy Ownership and Payouts

After a life insurance policy is approved and issued, understanding the distinct roles of the policy owner, the insured, and the beneficiary is important for effective management. In this context, the child is typically the policy owner, meaning they control the policy, pay the premiums, and have the right to make changes. The father is the insured, whose life the policy covers, and the beneficiary is the person or entity designated to receive the death benefit.

The policy owner holds several responsibilities, primarily ensuring timely payment of premiums to keep the coverage in force. Premiums can vary widely depending on factors like the insured’s age, health, and the policy type and amount. The owner also has the authority to make policy adjustments, such as updating beneficiary designations or, in the case of permanent policies, accessing any accumulated cash value through loans or withdrawals.

Designating beneficiaries clearly is a crucial aspect of policy management to ensure the death benefit is paid according to the owner’s wishes. It is important to name specific individuals or entities as primary and contingent beneficiaries and to review these designations periodically. Upon the death of the insured, the beneficiary will typically submit a claim form and a certified death certificate to the insurance company to receive the payout.

Life insurance death benefits paid to a named beneficiary are generally not subject to federal income tax under current tax law. However, if the policy proceeds are paid to the deceased’s estate rather than directly to a beneficiary, they may be included in the estate’s value and potentially subject to federal estate tax if the estate exceeds the exemption threshold, which is $13.99 million per individual in 2025.