Caring for Aging Parents | How Life Insurance Can Help

Growing older comes with its own responsibilities and challenges, but it can be even more challenging if your parents are in need of assistance in their old age. It can be extremely difficult to watch the people that raised you now take a turn and need support instead.

Currently, baby boomers are retiring and leaving the workforce in waves, with some of them lacking the means to take care of themselves personally because of health-related issues, or even financially as not everyone has access to social security or a retirement fund. Whether you take on this task of caring for your parents out of necessity or compassion, this choice will bring many changes to your life.

During and before this transitional phase, it is good to prepare your family, home, and finances to adjust to these changes more easily. Coming to terms with the fact that your parents are now in need of your regular support and care can be overwhelming. If this situation is looming in your future and you don’t know where to start, here are some things you should be aware of and be planning for before things become more urgent.

Intentional and Open Communication

First things first, you may have to have a difficult conversation with your parents if this subject has not already been discussed. It’s important to treat this situation with gentleness and sensitivity, as it can understandably be difficult for some to accept that they need assistance or that they might need more help than they realize.

If this happens, be supportive and patient in what you envision for their future as well as yours, and how you can best care for their current and anticipated needs. Additionally, it is to the benefit of you and your family to communicate and discuss these future plans before circumstances become urgent and you may have to make quick decisions.

As you go through this process together, it’s important to be there for your parents as they need you for physical, emotional, and financial support. However, keep in mind that you also need balance in your life as you manage your time and energy, especially for those who are also caring for children.

In fact, an increasing number of people are falling into what is known as the “sandwich generation.” This refers to adults roughly between the ages of 35 and 55 who support not only their own children and families but also their aging parents. A study conducted by the Pew Research Center revealed that almost half of adults in their 40s and 50s fall into the sandwich generation category, with many also providing some form of support to adult children as well.

This role can take a mental and emotional toll on you, causing relational as well as financial stress. While this situation may be unavoidable for some, it’s important to remember to take some time for yourself and practice methods to deal with any stress and to utilize effective financial planning.

The Living Situation

Likely the first thing you will want to establish is what kind of living situation your parent(s) will need. If your parents can manage living on their own for a bit longer, they might need some adjustments made to their home in order to make it safer and give everyone more peace of mind.

If they have needs that you aren’t able to meet, particularly when it comes to their health, you may need to consider hiring professional care such as a 24-hour caretaker or an assisted-living facility. However, these facilities and professional care options can be very expensive, especially if needed for an extended period of time, and many adult children choose to instead take care of their parents in their own homes.

This decision can be more cost-effective, but may also require you to move to a different house or make necessary changes in your existing one. As long as you are giving them adequate support physically and emotionally, any of these options could be the right choice for you and your family.

Financial Planning

Caring for your parents’ physical and emotional needs is very important, but financial support must also be considered, especially if your parents don’t have the means to provide for themselves. If you are arranging for your parents to be living with you or are going to be financially contributing to their wellbeing, it’s important to factor new costs into your budget.

For some, this may be a part of or the whole cost of a nursing home or other living facility. For others, it may be the added costs of housing your parents with the rest of your family. On top of that, your parents could also be dealing with large medical expenses depending on their condition and insurance.

If your parents are receiving some kind of benefits, pension, social security, retirement savings, or some other fund, then finances may be less of a concern for you. Whether they will be living with you or in a nursing home, that money might help towards any costs that arise from the care they are receiving.

Any financial resources available that they receive can make a huge difference when budgeting for and affording adequate care. However, not everyone receives social security benefits or has been able to build up their retirement savings. In which case, there are other options out there to help you ease the potential financial load.

As your parents age, there are still types of insurance that can benefit them if they have need. If it’s still early, you might want to encourage your parents to look into getting life insurance.

Certain life insurance policies provide a set amount of money at death, but a portion of it can often be used towards the care that the recipients would receive as seniors, such as paying for assisted living facilities. It’s an option that you may want your parents to consider while they are still young in case they need financial assistance in their old age for assisted living or other related costs associated with their future care.

It is often better to take out a policy while they are young, but affordable policies can be available for any age bracket. Therefore, it is something to consider if you think this might be a good investment for your parents and is a financially viable option.

If this is not a feasible option, there are other alternatives to help cover the cost of health care through other forms of insurance plans and annuities from insurance companies. As you take into account your need and financial ability, take the time to prepare and do research for adequate financial planning.

Legal Considerations

As you oversee your parents’ care while they age, there are some legal issues that may need to be resolved while your parents are under your care. This might include getting their affairs in order, putting together and writing out their will, as well as issuing power of attorney.

This last aspect may be crucial to you helping your parents make decisions, especially if their mental faculties have diminished in some way. Again, like many preparations in caring for your parents, setting these things in place early allows for less stress later on when their situation might become more serious.

Additionally, when buying life insurance for your parents, there are three main roles to fill: the insured, the policy owner, and the beneficiary. You will want to make sure that the same person fills at least two of those roles in order to take advantage of the tax benefits of a life insurance policy. For example, when taking out a policy on your parents, you will want to be both the policy owner and the beneficiary. Speaking with a legal advisor can further clarify the particulars.

How Life Insurance Can Help

If caring for aging parents has been a large part of your life, you likely have also thought about what choices you should be making right now to ensure that you are taken care of in the future for the sake of your own children. Purchasing a life insurance policy is a great way to plan for life’s unexpected situations. If your parents are living with you and contributing in some way financially, you may want to consider taking out a life insurance policy on them.

While buying life insurance for your parents can be difficult in some situations since insurance policies tend to become more expensive as you age, there are benefits to using the death payout if necessary. The payout could cover any funeral and burial expenses if needed as well as help provide for you, your spouse, and your children.

Finally, as you care for your parents, you also do not want to neglect your own needs and choices that would benefit you financially in the future. Choosing to invest in a life insurance policy when you are young ensures that your surviving family members and loved ones will be taken care of adequately. This is especially crucial if you are the one providing support to both your parents and children who would face financial hardship if they were to lose you.

Furthermore, if you are able to buy a whole life insurance policy for your parents, some of that money can be used even before your death through loans or early payments, should you need it. If you are in this situation and considering life insurance, we can help you find the perfect plan.

At LifeQuote, we have an array of life insurance policies to choose from including whole and term insurance, and even policies which do not require a medical exam. Get a free quote today and see the options you have for taking the next step in providing for and supporting your family.