There is an entire industry built around the perception that all seniors that need life insurance only need final expense life insurance or burial insurance. There’s some problems not only with the perception but the way the industry markets senior life insurance using that line of thinking.
I did a Google search for “senior life insurance” to kind of provide a sense of the industry logic that if you’re over 50 life insurance suddenly becomes a whole different thing than we needed just a few years before. If you would take the offerings at face value you would believe that seniors only need small amounts of life insurance and they would all somehow be better served by not taking an exam.
But just for a minute let’s consider the fact that many of us seniors are still working and a lot of us have decided to work way past traditional retirement years. Because of that we have many of the same needs as younger people. We still need life insurance for our spouse for protection against loss of income. It is not uncommon for many of us over 50 to have mortgages, if not brand new mortgages. I know I wouldn’t be real comfortable about leaving my wife with a mortgage to pay on her own.
For many of us we are running businesses when we are in our 60’s, 70’s and even 80’s. Business life insurance doesn’t become less important as we get older. The nice thing when we are over 50 life insurance for our business becomes much easier to quantify both for amount and how long we’ll need it.
For many of us we have found a value to leaving something behind to our children and grandchildren above and beyond the furniture we’ve collected. A legacy or inheritance. Insurance companies rules about financial justification do limit the amount of wealth building that can be done with senior life insurance, but few companies would have a problem with an older person carrying $250,000 or even more to go to their children, grandchildren or great grand children. I won’t say that leaving $25,000 or $50,000 to be divided up isn’t meaningful, but when you can take an exam and get a traditional life insurance policy with a higher death benefit without increasing your premium outlay, why not?
So why are all of these companies focusing on burial and final expense when there are clearly, I think for the majority of seniors, needs that go beyond the small, overpriced policies offered? They are preying on consumer fear about insurability and I believe they are trying to make us older folks believe that final expenses are just a small item that once taken care of, makes it all OK. What happens when the consumer doesn’t know any better is that they may end up owning several small, overpriced policies because no one has explained to them the prudent and affordable way to handle their larger issue.
Bottom line. There has to be more voices of reason at this stage of a person’s life. When we’re young and make mistakes we often have time on our side to clean them up. When you’re over 50 life insurance mistakes are a much more expensive proposition to fix so it needs to be done right the first time.