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Your Financial Life
By Transamerica / Oct 14, 2015

How to Talk to your Parents About Their Personal Finances

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When your parents get older, it may be time to have a conversation about their finances. Asking your parents about their finances can sometimes be uncomfortable. Even so, it is a discussion you should have at some point in your life and their lives. This is so you can have a clear understanding of what you can expect once they pass away. For example, do you know where their important documents are? What assets and liabilities they have? Do they own life insurance? If so, how do they intend for their life insurance payout (or death benefit) to be used? To help pay off their mortgage? Or maybe to provide liquidity to help pay estate taxes and keep their legacy in tact?

You’ll want to approach your parents about these issues with tact and respect. If they’re reluctant to talk to you, have patience and let them know that you understand their concerns. But be sure to express your concerns as well. Read the following suggestions as to how you can start, and continue a conversation with your parents about their finances and any life insurance they may have.

Approach with care and thought.

Your parents’ finances are a complex subject. When you decide to speak with your parents, be sure you present a strong reason that you can relay clearly as to why you’re asking in the first place. Could it be in regard to your parents’ age or their health? Discuss your concerns about their overall health, caregiving preferences, expenses as well as any medical or life insurance coverage they may have. Assure them that your concerns are based on their well being and how they’d intend for their life insurance payout to be used, such as leaving a legacy, final expenses, paying off a mortgage or other debt or funds to help pay off estate taxes.

Begin the discussion early.

It’s a good idea to ask your parents about their finances and life insurance while they’re still reasonably healthy. If you wait too long, their health may decline, which could make your efforts to help them ensure their financial plans are in place more difficult. If your parents are reluctant to talk about their plans, express your concern for them, their health and their future. This may help them better understand your interest.

Explain to them that it’s in everyone’s best interest.

Try to relay to your parents that it’s in yours and their best interest that you know the details of their finances, their wishes and any life insurance policies they may have. Help them understand that every bit of information they spare can help you settle any financial issues and/or costs more quickly and efficiently once the time to do so comes.

Find out what type of life insurance they have.

Once you and your parents feel comfortable enough to discuss these matters, it would be a good time to find out what type of policy they have. Is their policy a term life insurance, whole life, universal life, or variable universal life? Learning about what types of policies your parents have and how they intend the death benefit to be used can help you be better prepared when the time comes.

In the end, it’s their decision.

Whatever the outcome of your conversation, just remember, they’re your parents. Ultimately, it is up to them as to what, if anything, they tell you about their personal finances and any life insurance they may own. As was stated earlier, asking your parents about their affairs may be met with emotions, some of which can be negative, so you should prepare yourself before you bring up the subject.

Anything financially related that you mention to a loved one, including parents, requires careful thought and timing. And by all means, be gentle and receptive to their sensitivities. If it helps, think to yourself how you would like your child or children to approach you when asking about your financial affairs.