I have spoken to them about obtaining life insurance and they are on board with the idea, but my general question is let's say I take out two insurance policies, one for each of them for let's say 1 million dollars each.
Would I then get 2 million dollars in the event of their death? I will have significant bills to pay off with their funerals, their house, their cars, etc.
Do life insurance companies do this, knowing their policy holders will eventually die?
For you to get paid 2 million dollars (1 million each), both would have to die at the same time, for example, a car accident or plane crash.
So at one time in the future, one of your parents will die first. As a general rule, both mom and dad should list each other as the beneficiary and you as the contingent beneficiary in case both die at the same time.
So, if dad dies first, then mom gets the 1 million to pay off the funeral and debts and if lucky will have money left over so you can inherit when she dies 2nd plus her 1 million to pay for funeral and debts.
Debts are not inheritable to children, so if not enough money to pay off the debts, the cars or house will be foreclosed and any credit card companies will write it off.
The only concern is you would like to bury your parents and the cost to bury with a decent funeral and plot is between $5,000 to $10,000.
You may want to look for a term life insurance policy that has $10,000 to $25,000 maximum coverage on each. Here's how you can learn about Globe Life Insurance which offers people age 78 and under up to $30,000 of simplified life insurance with no medical exam.