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Old 07-29-2020, 11:10 AM
 
Location: New Britain, CT
887 posts, read 391,490 times
Reputation: 1418

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Is there a general rule of thumb when it's a waste of time and money to buy a life insurance policy for an elderly parent? My sister, who has financial power of attorney, thinks it's a smart move to take the proceeds from a small IRA that my, 90yo in August dad, has to cash out, and buy an insurance policy with it. I think just put it in his savings account. Statistically he is off the charts for the males in his family. His dad passed at 65, a brother in his 60's, two other brothers at 75, one at 82. One sister and his mother passed at 93.

Did I mention that my sister is an accountant for a living?
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Old 07-29-2020, 11:46 AM
Status: "Make Orwell Fiction Again" (set 1 day ago)
 
Location: The Triad (NC)
30,578 posts, read 67,292,500 times
Reputation: 36230
Quote:
Originally Posted by JimG2 View Post
Is there a general rule of thumb when...
Tons of them. Whatever you want to do/show you can find something to support an approach.
Quote:
...to take the proceeds from a small IRA that my, 90yo in August dad, has to cash out,
and buy an insurance policy with it.
Get some quotes. Run the numbers. See what you can do.
How much payout vs how much premium? (the ratio you get is in one of the rules of thumb you asked about)
Quote:
Did I mention that my sister is an accountant for a living?
Have an insurance actuarial in the family too?
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Old 07-29-2020, 03:32 PM
 
Location: New Britain, CT
887 posts, read 391,490 times
Reputation: 1418
Hahaha.... not talking big money. If there was an insurance actuary in the family that person would be POA. We have my accountant sister, my chemist sister, me a project manager in construction with experience in multi-million dollar projects, and a dead drug addict sister, but her Financial Planner son for Prudential is his executor. POA sister was talking about annuitizing some annuities at him being 90.... really? She is kind of clueless... as an accountant for a living....
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Old 07-29-2020, 07:58 PM
 
871 posts, read 383,419 times
Reputation: 3019
I can't imagine an insurance company willing to write him a life insurance policy unless the monthly premium was about equal to the payout when he died. Even then, they would probably want a very recent medical exam on him. Some people just don't understand the purpose of life insurance.
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Old 08-01-2020, 05:09 PM
 
Location: Philadelphia
526 posts, read 153,120 times
Reputation: 391
Life insurance companies are pulling back on new policies for those over 70. I doubt he would be able to get a policy.
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Old Yesterday, 07:50 AM
 
Location: Raleigh, NC
4,046 posts, read 4,698,385 times
Reputation: 5730
Quote:
Originally Posted by JimG2 View Post
Is there a general rule of thumb when it's a waste of time and money to buy a life insurance policy for an elderly parent?
Life Insurance is typically used to replace/help recover from a financial loss. There will certainly be an emotional loss when they die, but other than funeral related expenses, will there be a financial loss? Is someone else relying on their SS or Pension income?
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Old Yesterday, 11:11 PM
 
537 posts, read 171,112 times
Reputation: 1061
For seniors, the only thing they can qualify are small whole life insurance policy AKA Final Expenses. The coverage range from $2,000 to $25,000. It's expensive for what its worth. Depending on the policy and the health of the insured, some of these policies to be paid in full upon death of an insured, an insured has to live beyond the two year period. If the insured dies within 2 years, the family only get their money back + interests. So for the money you are paying and the benefits you get back in return is very little. Really, it's just a burial plan.


If a senior wants to buy life insurance, it has to make sense. If the monthly premium one is paying adds up to the amount of the death benefit under 5 years.... just save the money on your own because after that, you are just losing money.

Last edited by mikefong123; Yesterday at 11:20 PM..
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