Life insurance for my parents over 60?

[8675309]

I was talking to my mom this weekend about how she's worried that if something happened to my dad she would be left with nothing but a house payment. My dad is 68 and has had prostate cancer (years ago) and she thinks he is not insurable. Is this true? Are there small term policies out there for those over 60 that are affordable? Even if it was just $5-10,000 to cover funeral expenses and for her to get on her feet? 

I was surprised that they didn't have one set up by now but they've never really been financially savvy with their money so I want to start helping them get ready for retirement. They are the kind of people that need to be directed and I don't mind doing it. If anything DID happen to my dad, I know my husband and I would take over her house payment to let her stay there and we'd work something out so that she was ok but a life insurance policy would definitely help. 

TIA!

[Deleted]

You could look into one of those "no medical questionnaire" type policies. I only know Canadian infomercials, lol. It's not going to be a good deal, but a small policy might be doable.

[simpsongal]

Ditto tokenhoser. I think my mom bought a $10K one from AAA or AARP. It's meant to handle end of life expenses.

[8675309]

OK I just looked that up and I'll get a quote going for my mom. I thought there were a couple others out there too.

Thanks!

[awkwardpenguin]

A $10k guaranteed acceptance policy from AARP is $78/month. So you pay the full death benefit in premiums in 10 years, 8 months. If he lives longer than that, it actually costs more in premiums than the payout. It might still be worth it if it would really make a difference for your mom, but it's quite expensive.

He will probably not qualify for health rated products at his age with a cancer history.

[jillboston]

If they have enough equity in the home (and she is 62 or older) they could get a reverse mortgage and payoff the existing mortgage they have. It would not come due until the last of the 2 of them is permanently gone from the home (death, move away without selling, 12 consecutive months in a nursing home). Your Mom would just have to be certain that she'd be able to pay the property taxes and homeowner's insurance on the home on just her income (if the assumption is that he will die before she does)

[Deleted]

Any life insurance for a 68 year old is going to be super expensive unless maybe it is through his employer/Union/other sort of membership

If your financial situation is good, I would plan on taking care of the funeral. Cremations are not necessarily that expensive. I think my dad's cremation, burial and a dinner for family and friends was only about $3k. Obviously it depends on what you do but it isn't necessarily that much.

[8675309]

All good things to think about. Thank you everyone.

My parents still owe about $180K on their current home. It's valued at $300K now and it's in a retirement community on a Golf Course so I doubt that the value would drop anytime soon. It's a super nice place and I would hate for her to leave if we could support her. She's only 61 and my dad is 68. The idea was that if something happened to my dad (who is the only one working) my husband and I would put the house in our name and take over payments so she could stay there. All my mom would have to pay is the HOA from her SS Benefits. She would then have enough money to pay her utilities etc. They've made it clear that the house would go to me anyway if something happened to BOTH since my brother is broke and would never financially support them. If anything he always has his hand out and owes them a shitton of money. Sorry if I am all over the place but that's just the way it is. They just do not want the house to go to both kids if I'm the only one paying the mortgage. Do I think that's fair for my brother? I am not sure.

I guess life insurance should be the least of my worries.

[MNH2013]

You should also make sure their wills are set up for the house stuff you just mentioned. Just knock it all out now.

[imojoebunny]

Jan 11, 2016 19:41:05 GMT -5 8675309 said:

All good things to think about. Thank you everyone.

My parents still owe about $180K on their current home. It's valued at $300K now and it's in a retirement community on a Golf Course so I doubt that the value would drop anytime soon. It's a super nice place and I would hate for her to leave if we could support her. She's only 61 and my dad is 68. The idea was that if something happened to my dad (who is the only one working) my husband and I would put the house in our name and take over payments so she could stay there. All my mom would have to pay is the HOA from her SS Benefits. She would then have enough money to pay her utilities etc. They've made it clear that the house would go to me anyway if something happened to BOTH since my brother is broke and would never financially support them. If anything he always has his hand out and owes them a shitton of money. Sorry if I am all over the place but that's just the way it is. They just do not want the house to go to both kids if I'm the only one paying the mortgage. Do I think that's fair for my brother? I am not sure.

I guess life insurance should be the least of my worries.

Just an FYI, and I hope you don't have to ever deal with this.  Since the value of the home has $120K in equity, if your mom put the house in your name, it would be considered a gift over an above the allowable limit, and be subject to tax. She could transfer $14K a year to you in equity though, and that might be a way to do it, she could do $28K to you and your DH, but that may not be desirable.     

[badgergrl]

Jan 11, 2016 22:37:05 GMT -5 imojoebunny said:

Jan 11, 2016 19:41:05 GMT -5 8675309 said:

All good things to think about. Thank you everyone.

My parents still owe about $180K on their current home. It's valued at $300K now and it's in a retirement community on a Golf Course so I doubt that the value would drop anytime soon. It's a super nice place and I would hate for her to leave if we could support her. She's only 61 and my dad is 68. The idea was that if something happened to my dad (who is the only one working) my husband and I would put the house in our name and take over payments so she could stay there. All my mom would have to pay is the HOA from her SS Benefits. She would then have enough money to pay her utilities etc. They've made it clear that the house would go to me anyway if something happened to BOTH since my brother is broke and would never financially support them. If anything he always has his hand out and owes them a shitton of money. Sorry if I am all over the place but that's just the way it is. They just do not want the house to go to both kids if I'm the only one paying the mortgage. Do I think that's fair for my brother? I am not sure.

I guess life insurance should be the least of my worries.

Just an FYI, and I hope you don't have to ever deal with this.  Since the value of the home has $120K in equity, if your mom put the house in your name, it would be considered a gift over an above the allowable limit, and be subject to tax. She could transfer $14K a year to you in equity though, and that might be a way to do it, she could do $28K to you and your DH, but that may not be desirable.     

I'm guessing that her parents won't be giving her 5 million in her lifetime to have an issue with the gift tax !

blog.taxact.com/gift-tax-do-i-have-to-pay-gift-tax-when-someone-gives-me-money/

[8675309]

Jan 11, 2016 22:22:06 GMT -5 @fivedogs said:

Jan 11, 2016 19:41:05 GMT -5 8675309 said:

All good things to think about. Thank you everyone.

My parents still owe about $180K on their current home. It's valued at $300K now and it's in a retirement community on a Golf Course so I doubt that the value would drop anytime soon. It's a super nice place and I would hate for her to leave if we could support her. She's only 61 and my dad is 68. The idea was that if something happened to my dad (who is the only one working) my husband and I would put the house in our name and take over payments so she could stay there. All my mom would have to pay is the HOA from her SS Benefits. She would then have enough money to pay her utilities etc. They've made it clear that the house would go to me anyway if something happened to BOTH since my brother is broke and would never financially support them. If anything he always has his hand out and owes them a shitton of money. Sorry if I am all over the place but that's just the way it is. They just do not want the house to go to both kids if I'm the only one paying the mortgage. Do I think that's fair for my brother? I am not sure.

I guess life insurance should be the least of my worries.

If it is a retirement community, will you be able to do this?  My mom's friend had a parent who was diagnosed and died of cancer shortly after she moved into an age-restricted retirement community.  They had to sell her condo because neither of the daughters were old enough to live there at the time.  

In any case, you should sit down with your parents and talk through all of this, and then get them to sit down with a lawyer to make it official.  

You know? I actually don't know. Matter of fact I know they have rules that you cannot live there unless you are over 55. Crap. Definitely something to think about. Thanks!

[tres3]

You need an elder law attorney but there are a lot of issues you aren't even thinking about, like eventual social security payments. Are your parents drawing already or are they waiting until 72 to get maximum benefit. Do they have long-term care insurance? I'd be more worried about medicare/medicaid planning in their situation.

[imojoebunny]

Jan 12, 2016 0:51:35 GMT -5 badgergrl said:

Jan 11, 2016 22:37:05 GMT -5 imojoebunny said:

Just an FYI, and I hope you don't have to ever deal with this.  Since the value of the home has $120K in equity, if your mom put the house in your name, it would be considered a gift over an above the allowable limit, and be subject to tax. She could transfer $14K a year to you in equity though, and that might be a way to do it, she could do $28K to you and your DH, but that may not be desirable.     

I'm guessing that her parents won't be giving her 5 million in her lifetime to have an issue with the gift tax !

blog.taxact.com/gift-tax-do-i-have-to-pay-gift-tax-when-someone-gives-me-money/

There are still tax implications she should consider before taking the home, especially if she ends up having to sell it.

www.elderlawanswers.com/should-my-parents-give-me-their-home-12411

[tres3]

Jan 12, 2016 7:36:57 GMT -5 imojoebunny said:

Jan 12, 2016 0:51:35 GMT -5 badgergrl said:

I'm guessing that her parents won't be giving her 5 million in her lifetime to have an issue with the gift tax !

blog.taxact.com/gift-tax-do-i-have-to-pay-gift-tax-when-someone-gives-me-money/

There are still tax implications she should consider before taking the home, especially if she ends up having to sell it.

www.elderlawanswers.com/should-my-parents-give-me-their-home-12411

Agreed. She definitely needs an attorney because she may be better off putting a mortgage on the house for the amount she "lends" her parents to make the monthly payments. It would also protect her if either parent needs longterm care via medicaid and they state puts a lien on the house. 

[Deleted]

Jan 11, 2016 19:41:05 GMT -5 8675309 said:

All good things to think about. Thank you everyone.

My parents still owe about $180K on their current home. It's valued at $300K now and it's in a retirement community on a Golf Course so I doubt that the value would drop anytime soon. It's a super nice place and I would hate for her to leave if we could support her. She's only 61 and my dad is 68. The idea was that if something happened to my dad (who is the only one working) my husband and I would put the house in our name and take over payments so she could stay there. All my mom would have to pay is the HOA from her SS Benefits. She would then have enough money to pay her utilities etc. They've made it clear that the house would go to me anyway if something happened to BOTH since my brother is broke and would never financially support them. If anything he always has his hand out and owes them a shitton of money. Sorry if I am all over the place but that's just the way it is. They just do not want the house to go to both kids if I'm the only one paying the mortgage. Do I think that's fair for my brother? I am not sure.

I guess life insurance should be the least of my worries.

Do they actually have a will which they have given you a copy of? Please make sure they have one in place.

[sfy]

Jan 12, 2016 7:36:00 GMT -5 tres3 said:

You need an elder law attorney but there are a lot of issues you aren't even thinking about, like eventual social security payments. Are your parents drawing already or are they waiting until 72 to get maximum benefit. Do they have long-term care insurance? I'd be more worried about medicare/medicaid planning in their situation.

I thought the age for max benefits was 70? But OP mentions her mother's SS in her follow up post.

[redheadk]

Jan 12, 2016 0:56:03 GMT -5 8675309 said:

Jan 11, 2016 22:22:06 GMT -5 @fivedogs said:

If it is a retirement community, will you be able to do this?  My mom's friend had a parent who was diagnosed and died of cancer shortly after she moved into an age-restricted retirement community.  They had to sell her condo because neither of the daughters were old enough to live there at the time.  

In any case, you should sit down with your parents and talk through all of this, and then get them to sit down with a lawyer to make it official.  

You know? I actually don't know. Matter of fact I know they have rules that you cannot live there unless you are over 55. Crap. Definitely something to think about. Thanks!

If your mother will still be living there, not you, it may not be an issue or at least one you can sidestep via a trust. My grandmother lives in a senior community. It does not allow rentals or anyone under 55 but the condos CAN be owned by a child of a resident for a parent/in-law to live in. 

[badgergrl]

Jan 12, 2016 7:36:57 GMT -5 imojoebunny said:

Jan 12, 2016 0:51:35 GMT -5 badgergrl said:

I'm guessing that her parents won't be giving her 5 million in her lifetime to have an issue with the gift tax !

blog.taxact.com/gift-tax-do-i-have-to-pay-gift-tax-when-someone-gives-me-money/

There are still tax implications she should consider before taking the home, especially if she ends up having to sell it.

www.elderlawanswers.com/should-my-parents-give-me-their-home-12411

Other tax issues yes- gift tax issues no. Just a popular misunderstanding that I see over and over about paying taxes on anything over 14k which you initially stated and isn't true.

[8675309]

Jan 12, 2016 7:36:00 GMT -5 tres3 said:

You need an elder law attorney but there are a lot of issues you aren't even thinking about, like eventual social security payments. Are your parents drawing already or are they waiting until 72 to get maximum benefit. Do they have long-term care insurance? I'd be more worried about medicare/medicaid planning in their situation.

Neither are drawing from SS. They are waiting until my dad retires in a couple years. They do not have any long term care insurance. They have nothing actually. Which is what has me worried. They've never been good about money.

[imojoebunny]

Jan 12, 2016 12:47:16 GMT -5 8675309 said:

Jan 12, 2016 7:36:00 GMT -5 tres3 said:

You need an elder law attorney but there are a lot of issues you aren't even thinking about, like eventual social security payments. Are your parents drawing already or are they waiting until 72 to get maximum benefit. Do they have long-term care insurance? I'd be more worried about medicare/medicaid planning in their situation.

Neither are drawing from SS. They are waiting until my dad retires in a couple years. They do not have any long term care insurance. They have nothing actually. Which is what has me worried. They've never been good about money.

In that case, you might also want to read this.  

www.elderlawanswers.com/transferring-assets-to-qualify-for-medicaid-12001

and this

www.elderlawanswers.com/protecting-your-house-after-you-move-into-a-nursing-home-6897

[8675309]

Thanks everyone for all the great advice and things to think about. I didn't realize how much I need to help them until now. They are so unprepared. This is all such great info!!