What should you focus on when comparing life insurance options for parents?

When comparing rates and deciding on a life insurance policy for your parents, the first important consideration is why life insurance is needed in the first place. The reasons may be that you rely on them financially and need to replace their income when they pass, or you want to have a safeguard to cover their outstanding debt. Ultimately, your reason for getting life insurance from your parents needs to show "insurable interest," which means that their passing would cause a financial burden on you.

Once you determine the "why," then you'll need to calculate how much coverage they'll need. Some considerations include:
- How much debt they have or may have when they pass away (for example, mortgage, credit cards, car loans, etc.)
- Determining their end-of-life plans (ex: funeral costs);
- Determining if you're financially responsible for their care in their later years (for example, reviewing their health and medical needs).

Like any other life insurance policy, your parents will need to go through the application process and, in some cases, may need to undergo a medical exam.

There are many life insurance options, and you'll have to consider factors such as age, health and costs. Remember that the older a person gets and their health starts to decline, the higher the cost of life insurance increases. 

Below are some types of policies available for parents.
- **Term Life Insurance**: Most term life insurance plans provide a larger death benefit for a stated period (namely 10, 20 or 30 years) and have a level premium throughout that timeframe. This is one of the more cost-effective plans and maybe most suitable for replacing income or paying off a mortgage when your parent passes away.
- **Permanent Life Insurance (Universal or Whole Life)**: Permanent life insurance plans are designed for a longer timeframe and have the potential to build cash value that can be accessed while the insured person is still alive. Because of these features, permanent life insurance plans are usually more costly. Considerations for permanent life insurance plans may be covering funeral or final expenses or your parents having longevity that runs in the family.
- **Guaranteed Issue Life Insurance**: While this type of life insurance doesn't require a medical exam, it is one of the most expensive options. You may consider a guaranteed life insurance policy if your parent doesn't qualify for term or permanent life insurance because of health or age.

Once you've determined how much insurance you need and the appropriate type of policy to meet those goals, you'll start shopping for life insurance policies. It's best to compare different life insurance quotes.

Some places to look are:
- Starting with the company that handles your car or home insurance and
- Working with an insurance broker with access to many life insurance companies.

When shopping for the right policy, ensure that the company meets an A+ rating; this determines the strength of the company paying on its future death benefit claims. Another important aspect of your shopping is finding a financial professional you trust who can assist you with the process after your parents pass. It’s one thing to start the process and be qualified for life insurance, but it’s another to navigate through the emotions when you’re dealing with the loss of a loved one.

Lastly, it’s crucial to have an open and honest conversation with your parents about why they need life insurance. It can be uncomfortable, but nothing is worse than not having a plan in place.