There is probably no age group market that is more sought after or more abused than the senior life insurance market. What a wake up call it was (several years ago) when I flew past 50 and started getting offers for life insurance for seniors.

Being a life insurance agent I can honestly say I was actually taken aback that the offers I was getting from such notables as AARP and New York Life were even legal. They were offers that would be laughable if it weren’t for the fact that every year millions of older people, not knowing any better, buy into these products because they are just so friendly and easy.

However you want to define seniors, over 60, over 70, they are generally looking for one of two things, either final expense life insurance or estate tax life insurance. By far the majority are simply looking for a modest sized policy to take care of final expenses. When I started in the business $10,000 was considered an adequate final expense policy. Today amounts of $50,000 to $100,000 are both prudent and reasonable given the cost of final health care bills, probate, asset liquidation and funerals.

The problem as I see it and experience it is that virtually all marketing of senior life insurance is done with either very short guarantee term policies or with whole life cash value policies. Neither of these products address the fact that final expense life insurance by definition needs to be permanent and if it’s for seniors it needs to be affordable and budget friendly. It needs to have an affordable level premium and a guaranteed level premium and death benefit that goes on until you die. It does not need to have cash value. Cash value is not your friend.

For the purpose of final expenses, senior life insurance should not be term insurance. Two of the most common offerings in final expense are a 5 year term and a 7 year term insurance. AARP offers a 5 year renewable term policy that has no guarantee at all. It projects what the rates will be when they go up in 5 year increments, but it won’t guarantee those rates. And get this, it doesn’t go up in 5 year increments from the date you sign up. It goes up every 5th year starting at age 45 so if you buy a policy at age 69, your first 5 year term increase is at age 70. Don’t buy term for final expense. You need a life time guaranteed level premium and guaranteed death benefit.

Don’t fall for guaranteed issue life insurance or no exam life insurance. These two traps that sound so friendly are really a way to fleece seniors. Most people in their 70’s still easily qualify for a standard rate class, many of them for preferred and preferred plus rates. So, for the majority of seniors the difference between taking an exam and not taking an exam is, well, huge. With no exam life insurance, if you are approved, you could find yourself paying easily 2 to 3 times more for life insurance than you need to and if it has an increasing premium it could become unaffordable about the time it might be needed.

Bottom line. Over age 60? Age 70? Age 80? You are the target and there are hundreds of companies shooting for your business and swimming in the profits. Don’t sign up for anything with no exam or guaranteed to be issued until you know what you can get through traditional senior life insurance.