Can an adult child take out a life insurance policy on their aging parents?

Answer 1

For an insurance company to write apolicy, at the time it is sold there has to be an insurable interest between the person taking out the policy and the insured.- there needs to be some legitimate need for it. If you just wanted to cash in on your parents' deaths, sorry, you're out of luck. Perhaps if one of your parents had some type of income that would stop for BOTH of them if one of them died (some sort of annuity that didn't pass to the other) and that income was used to support the adult child on a regular basis, that MIGHT be an insurable interest, probably if the adult child had no other way to earn or get income. That is, there has to be some financial loss the adult would incur if one or both of the parents died. ("They excluded me from their will" is not acceptable). I doubt an insurance company would consider insurable interest exists between any parent and adult child unless the adult child was disabled or mentally ill and dependent on the adults for support, and it would have to be well documented.

The other question, even if there is insurable interest, is would the aging adults even pass the underwriting? Insurance companies don't write policies without medical underwriting (they call it evidence of insurability).They do blood tests, take blood pressure, do AIDS tests, they look at medical records. If they have ANY health problems they will be turned down probably entirely. They do have higher premium categories for people that have some health issues, their age is probably as big an obstacle. The premiums will be SO HIGH that it wouldn't be possible to pay them. The insurance company bases premiums on their statistics on mortality.. and the older a person is, the higher the risk obviously is. Insurance companies aren't in business to lose money. I'm sure there is some maximum age beyond which they just don't insure.