When it Comes to Life Insurance - Don’t Forget Mom and Dad
Don’t forget your parents when planning for your life insurance needs. You might be wondering why you would need to include your parent’s future plans into your own life insurance needs. It may be a surprise to you, but it is becoming more and more common for older parents to move in with their children later in life.
According to 2011 U.S. survey data, over 4.6 million parents were living with their children. This is a trend that has been steadily rising since at least 2000. Mostly driven by the poor economy, parents returned to live with their children as both tried to make it through the financial downturn. Parents and children together can share housing, child care, and later elder care costs. It’s really the latter – elder care – that you need to keep the cost in mind as you assess your own life insurance needs.
Living together under one roof can definitely help once a parent reaches the point of needing daily assistance to complete normal daily tasks. In this type of living situation, the parent will likely become dependent, both physically and financially on the adult child. It is no secret that the cost of skilled long term care is expensive. According to John Hancock's 2013 survey, the average annual cost at an assisted living facility is over $41,000, and a private room in a nursing home is almost $95,000 a year. Again, obvious reasons to have mom and dad move in for a little while!
What if something were to happen to you or your spouse though? Undoubtedly, your incomes will be very important factors in making this living arrangement work. Because of this, the future care needs of your parents need to be factored in to your life insurance coverage. If something were to happen to you, the funds received from the death benefit can go towards hiring care to come to the home, or supplementing the costs of care in a facility.
About the author: Seth Gowdy is the Sales Manager for Pivot Insurance and holds multiple insurance and securities licenses. He has been part of the financial services industry for nearly 20 years. In his free time he enjoys being outdoors fishing, hiking, and geocaching with his wife and two children. Seth most enjoys helping clients with Pivot’s anonymous life insurance quote process and needs calculators. You can reach Seth at 1-800-651-1953 or SGowdy@pivot.com.