Insurance Library notes that the two most common instances that allow an adult child to obtain a life insurance policy for a parent are when the adult child is positioned to suffer financially when the parent dies and when the child provides financial support to the parent. An adult child can purchase a life insurance policy for a parent without meeting these qualifications if the parent owns the policy.Continue Reading
HealthandAutoInsurance notes that for an adult child to own a parent's life insurance policy, the child must be able to prove insurable interest to the insurance company. This means that the child has to be able to show how the parent's death is set to negatively affect the child's finances. The reason for this is that the insurance company is unwilling to insure something that does not result in a negative financial impact when it's gone. The parent must also be a part of the underwriting process regardless of who is purchasing the policy.
According to Insurance Library, the benefit amount for a parent-owned life insurance policy depends on age, net-worth and income, regardless of who pays the premium. The parent must be able to sign the life insurance application documents to show agreement to the policy.Learn more about Insurance