For Long-Term Income, Opt for an Insured Reverse Mortgage

Many private reverse mortgages aren't insured. With these loans, the payout is backed only by the strength and reputation of the lender.

Uninsured reverse mortgages are fine if your parents opt for an up-front lump-sum payout, but if they're using the proceeds from the loan as monthly income or want access to a line of credit in case of an emergency, consider a reverse mortgage that's insured by the government.

To find a lender offering insured reverse mortgages, go to the Department of Housing and Urban Development website, where you can research reverse mortgage lenders and search for insured lenders in your area. With a federally insured reverse mortgage, your parents won't have to worry about their monthly income or line of credit.