UPDATED: Nov 27, 2011

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Written By: Laura BerryReviewed By: Daniel WalkerUPDATED: Nov 27, 2011Fact Checked

Yes, you may purchase life insurance on your grandmother’s behalf but you just need her permission. You should be aware of certain stipulations though. For example, older people will undoubtedly pay higher premiums than younger people.

If you currently have a life insurance policy, you may be paying a very low monthly rate. Older customers are higher risks as the likelihood of them passing is higher. Before you purchase a life insurance policy for your grandmother, talk with her and discuss what type of coverage she really needs.

What kind of insurance policy is best for older customers?

If you are looking for the kind of insurance that will take care of excessive costs that include medical bills, fees related to the burial or house payments, a term or pre-paid life insurance policy may suit the purpose. Opting for whole or guaranteed life insurance will be much more expensive and depending on the age, you may not qualify.

What is pre-paid life insurance?

Pre-paid life insurance is exactly what it sounds like. You pay a designated amount at one time; there are no monthly payment options. When death occurs, the beneficiary receives one death benefit payout. This type of life insurance is extremely convenient, especially if you will be taking responsibility of paying for the policy. You will not receive a monthly statement because you pay the policy in full. You are also aware of the limits of pre-paid life insurance during the application process so the expectations are clear.

What is the difference between term life insurance and pre-paid life insurance?

Term life insurance is paid monthly, pre-paid policies are paid up front. Once a pre-paid policy is activated, the benefits are available for the life of the policy. Term life policies are issued incrementally and must be renewed. You can purchase a one-year policy or a 25-year policy. You are expected to pay your bill monthly.

Where is the best place to start?

When you are researching life insurance options, the focus should be placed on need and price. Elderly people will not require extensive life insurance policies. They want to ensure that their loved ones will not be burdened with the costs associated with passing away.

To accomplish this goal, you can begin looking at life insurance companies that feature services dedicated to senior citizens over age 65 (if your grandmother is younger than 65 your options are better). Several online websites are available to review. They will give you a good idea of the costs associated with certain situations and the type of coverage needed. Use these sites as resources only.

Take this information to a well-established life insurance agency with your grandmother and complete the application process. Various questions may or may not relate to health and finances. Complete the application and sign.

Depending upon the type of policy selected, coverage may be immediate. You should remember that some policies would not pay the entire death benefit until a certain timeframe has passed. If you select this type of policy, you will need additional resources if a death occurs during this period.

How long before money can be accessed from the life insurance policy?

You should be clear on the type of insurance policy you have and the specifications involved. Term life insurance policies pay a death benefit only. If the insured passes while their insurance policy is still active, the beneficiary receives payment.

Whole life insurance policies have a certain cash value. This means you can borrow against the policy or cancel and take a payout. There are very strict guidelines that are attached to these options so it is a good idea for you to reflect on your decision thoughtfully.

If my grandmother passes during the first year of her insurance policy, can I still receive a payment?

Some policies that are offered to elderly people contain multiple clauses; after all, the insurance company must protect themselves. To determine the precise specifications of the policy, including clauses and loopholes it would be best to consult an attorney who specializes in insurance.

An attorney will be helpful in explaining the policy in terms that you can easily understand and provide you with information regarding your rights as a consumer. Many people are not aware of the fine print that still appears on every life insurance application. Having the proper knowledge will help you choose the correct policy so you are not stuck with astronomical bills.

Your grandmother is a very precious person in your life. You respect and admire her; give her respect and compassion during her final years and make sure her life is uncomplicated. The best way to assist your grandmother may be to help her with the final decisions and select a life insurance policy. Her mind will be at peace and will be able to enjoy her golden years.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Written by Laura Berry
Former Insurance Agent Laura Berry

Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Car Insurance Agent Daniel Walker