Taking Out a Life Insurance Policy on Your Parents

By April 19, 2023 Advisor, Blog, Consumer, News

People often wonder if they can insure their parents’ lives and how it differs from buying insurance on your own or spouse’s life. Below, we will discuss the reasons for getting life insurance for your parents and review the options available to you.


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Can You Buy Life Insurance for Your Parents?

In general, you can only take out life insurance on someone if you have an insurable interest in their life. This means that you would experience financial loss if the person were to pass away. For example, if you purchased a cottage jointly with your parents and there is an outstanding mortgage on it, you have an insurable interest in their lives.

Why Buy Life Insurance for Your Parents?

People might consider taking out life insurance on their parents for several reasons. Here are the main ones:

Covering final expenses

Covering final expenses: Final expenses are the costs associated with a funeral, such as fees for the funeral home, cemetery or cremation fees, floral tributes, obituary notices, and travel for out-of-town family members. If your parents don’t have policies on their own lives, or only one of them does, you may want to take out insurance to help cover these expenses.

Helping with inheritance fees and taxes

Helping with inheritance fees and taxes: If you expect to inherit a significant amount of money or property from your parents, a policy on them may help cover any taxes or other costs associated with the transfer of assets.

Paying off joint debts

Paying off joint debts: If you have outstanding debts with your parents, such as a joint mortgage or loan, you’ll be responsible for the payments if they pass away. You can use the death benefit from a policy on their lives to help discharge this debt or to cover their portion of the payments.

Financial support

Financial support: If you rely on your parents for financial support, for example, as a caregiver or dependent, you can use the death benefit from a policy on your parents to extend that support.

Types of Life Insurance You Can Take Out on Your Parents

The same types of life insurance you can get on your own life are also available to insure your parents’ lives. The two main types of life insurance are term life insurance and whole (permanent) life insurance. There are also several optional features and variations on these two products.

Term life insurance

Term life insurance provides coverage for a limited period of time, typically 10, 20, 25, or 30 years. This type of insurance is less expensive than other types, but it needs to be renewed at the end of the term. At renewal, the insurance provider will use your parents’ new ages and medical conditions to set a premium, which will likely be higher than your original premium.

Whole (permanent) life insurance

Whole (permanent) life insurance covers the insured person until they pass away. It is more expensive than term insurance but never needs to be renewed. Another advantage of these policies is that most of them have a cash value that builds up over time.

Guaranteed issue life insurance

Guaranteed issue life insurance doesn’t require a medical exam or health questionnaire. As long as the applicant meets the age requirements and other basic qualifications, they will be approved for coverage. This type of insurance is ideal if your parents don’t qualify for term or permanent life insurance due to their health or any disabilities they may have.

Simplified issue life insurance

Simplified issue life insurance asks some basic health questions but does not require a medical exam. These policies are less expensive than guaranteed issue policies and may be available in higher coverage amounts. If your parents are non-smokers with pre-existing conditions, this might be the right type of insurance for them.

Final expense life insurance

Final expense life insurance, also known as burial insurance or funeral insurance, is intended to cover end-of-life expenses such as funeral costs, interment costs, floral tributes, and travel for out-of-town family. Many final expense policies are also simplified issue policies.

You Cannot Buy Life Insurance for a Parent Without Their Permission

You can fill out the application form for your parents, but they will need to sign it and submit to a medical exam if that’s required. To purchase this type of insurance, you will also need to prove that you have an insurable interest in their lives. The concept of insurable interest is based on the idea that insurance is meant to protect you against financial loss rather than to generate a financial gain. Therefore, you need to show that you would suffer a financial loss if your parents were to pass away.

How To Purchase Life Insurance for Your Parents

The process of purchasing life insurance for your parents is similar to the process of buying life insurance for yourself, with a few extra steps.

  1. Discuss your plans with your parents, keeping in mind that this can be a sensitive topic that must be addressed with the appropriate amount of care. You may also want to discuss the matter with your siblings and anyone else who might not understand your intentions.
  2. Identify the type of policy that is most suitable for your situation and designate a beneficiary.
  3. Determine the face value of the policy. This is the amount of the death benefit you will receive when your parents pass away.
  4. Fill out the application and have your parents sign it.
  5. Have your parents undergo a medical exam if that’s required for the type of policy that you chose.
  6. When you’ve completed these steps, you will receive a quote from your life insurance provider telling you what your premiums will be. At that point, you can decide if you still want the coverage.


With their permission, it is possible to purchase life insurance on your parents’ lives. The main thing you will need to pay attention to is that you will have to prove that you have an insurable interest in your parents’ lives. You will also need to have your parents sign the application and submit to a medical exam if required.

Do you have questions about how to insure your parents’ lives? Contact us today to talk to one of our licensed insurance advisors. We answer your questions for you, review your policy options with you and help you find a plan that works perfectly for you and your parents.

At Canada Protection Plan, we are proud to offer a wide range of simplified issue and no-medical life insurance plans, including both term and whole (permanent} life insurance, as well as critical illness insurance. These plans are ideal for applicants who have pre-existing conditions, who need insurance quickly, or who don’t like needles or medical exams. If your parents fall into one of these groups, we have a plan for you.

Canada Protection Plan is one of Canada’s leading providers of No Medical and Simplified Issue Life Insurance. Our mission is to provide reliable protection and compassionate service from coast to coast with easy-to-purchase life insurance, critical illness insurance and related products. Our expanding product choices will help you get the coverage and peace of mind you need for a better financial future. Canada Protection Plan products are available through over 25,000 independent insurance advisors across Canada.


To learn more about Canada Protection Plan and our line of comprehensive No Medical and Simplified Issue life insurance solutions, call Broker Services at 1-877-796-9090 and we will be happy to assist you or put you in contact with Sales support in your region.

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