Yes, you can take out funeral insurance on behalf of your parents, in which case you will be the beneficiary. However, before you take out a funeral insurance policy, it’s a good idea to have a conversation with your parents to see if they already have a policy or a plan in place. If you both have funeral insurance, both policies can pay out a lump sum to help pay for funeral expenses including the coffin, burial expenses, plot, flowers, a wake and even transport costs for loved ones to attend the funeral.