Life Insurance for Parents! It's a snazzy tagline used by a certain insurance industry periodical that I won't publicly shame for such a terrible grab at attention. The idea is straight forward and lacks any real creativity or nuance.
Here's the basic premise…
Your parents are older than you, you likely haven't saved enough money, so why not buy a life insurance policy on them and wait for your parents to die. When that day comes, your weak retirement savings will benefit from the windfall death benefit (insert raising eyebrows emoji…if we had emoji's back then…).
This was an idea actually published in an industry publication years ago and the idea came back around to me recently. I thought, surely this horrible idea met an appropriate death years ago and long since disappeared from the face of the earth. Nope.
Turns out some people are still talking about it like it's a newly minted idea. To be fair, I'm certain the first time I read about it wasn't the first iteration of the idea either.
But let's get serious for a minute. Can you really buy life insurance on your parents to guarantee a stronger retirement account position for yourself in the future?
Maybe. Should you?
Probably not. Let's talk about why.