Insurable interest is when you or a group of people have a financial interest in another person's life. You can be said to have insurable interest on a person if their death would lead you to suffer a financial loss or difficulties. So, in the case of your parents, you could take out life insurance for them if you can show that their passing would leave you with financial hardship, such as covering care costs, paying off their mortgage or funeral costs. It was recently revealed that the average family is picking up a £1,800 shortfall on funeral costs, caused by 40% of loved ones not putting enough aside to pay for it [1], so making plans for after a parent's death is important. Most insurers will issue life insurance for any family member who has a financial interest in another member, such as a parent, sibling, child or spouse, provided that insurable interest is present. This demand for insurable interest means it is usually only close relatives that can be covered, preventing others from trying to 'cash in'.