For us more seasoned life insurance buyers there is an industry tendency to want to squeeze us all into the same companies and product type, senior life insurance or final expense life insurance.
This would be OK 1. if over 60 life insurance needs really did change or 2. The companies that “specialize” in senior life insurance would be at least straight forward enough to offer alternatives to their overpriced cookie cutter policies. Virtually all of the leading senior or final expense life insurance companies want to plug you into either a no exam simplified issue life insurance or a guaranteed issue life insurance that not only requires no exam, but also doesn’t ask any health questions.
The problem with both products is that by skipping vital parts of the underwriting process things are thrown out of balance in favor of you, the insured. Hang on to that thought for a nano second because that’s how long things were really swinging in your favor. The the pendulum swings back and everything is in favor of the life insurance company. They raise the price or shorten the guarantees or don’t offer any guarantees at all (AARP whole life). This balances things out so you really are getting what you pay for, a poorly underwritten policy that will never take into account that you have average or above average or even below average health.
I’ve written often in the past about how grotesquely overpriced and under guaranteed AARP/New York Life insurance products. Imagine a term insurance product that you know will go up in price every five years, but they won’t guarantee how much the increase will be. Imagine a whole life insurance policy that the price can be raised on whenever they feel like it. Somehow I’m missing that warm, fuzzy secure feeling in that type of product. Because these products start from an over priced position, they are often a strain on the budget. When a budget is strained and someone can jack with your delicate balancing act whenever the spirit moves them, the policy is doomed to lapse without ever having paid out a benefit.
So, before you let their scare tactic advertising get to you, jump out from under that cookie cutter and understand that if you are over 50, over 60 or over 70 or 80, it is in your best interest to consider fully underwritten, fully guaranteed traditional life insurance. I know fully and fully sounds like it should cost more, but if a company can do an exam (free to you) and ask health questions, they can lower their rate to match your actual risk instead of risk averaging the way no exam companies do.
Let me explain the scare tactics I have alluded to. Advertising life insurance with no exam is a way to make you wonder about your ability to pass an exam at our age. They want you to believe that exams are a pass/fail issue. If you fail you won’t be able to get life insurance! That isn’t true with traditional life insurance. No exam life insurance has one rate and if you answer the health questions correctly and nothing shows up in the Medical Information Bureau, you get that one rate. The truth is you can have health problems or have issues on your exam and still not pay anything close to what you would with no exam life insurance. And even if you have some serious health issues, serious enough to drive the cost of the insurance higher than the no exam life insurance, remember, the no exam rates are not guaranteed. They aren’t even guaranteed to be approved. The fully underwritten rates can be guaranteed for as long as you want. They might start out a little higher (only if you have serious health issues), but it won’t be long before they are lower, and if you are declined by the no exam company, they will immediately be the best offer around.
Bottom line. Don’t let age keep you from seeking advice from an independent agent who can help you compare prices and guarantees and keep the most money in your bank possible. If I can answer any questions or help you work through the different options, call or email me directly.
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