When it comes to life insurance for elderly people it’s a huge market. With nearly 76 million baby boomers this generation of people has been through it all. However one down side to most of this is that seniors are being taken advantage of by financial professionals at an alarming rate. In this article I’m going to cover what a few things they’re doing to rip seniors off.
Are You Getting Taken
First off, when it comes to life insurance agents you have to understand how they make money. I’ve worked in this industry for over four years and one of the most important thing you need to learn is that life insurance agents don’t get paid on a salary, or by an hourly wage, but instead by commission only.
This means in order for them to make money they have to sell something, and for them that something is life insurance. However their is another catch, the higher premium the policy has the more the insurance agent will get paid. For example, if you get a policy that has a $100 monthly premium they will usually get paid the first years premiums and earn a total of $1200 over then 12 months on your policy.
Now you might be wondering what does this all have to do with elderly? The reality is life insurance for the elderly cost far more than if they were writing a policy up for a 20 year old male. With seniors the cost is usually higher because of two factors, one being their age, and two being their health condition. If you have a 60 year old senior with high blood pressure his premiums are going to be much more expensive than someone who is 30 years old and healthy. Thus the insurance agent is going to earn far more off of the 60 year old senior.
However this isn’t the only trick these agents will use, another trick they will use to get you to pay more is cash value life insurance. They will claim that a whole life or universal life insurance policy will be the way to go. The reality is these policies cost far more than term insurance.
How To Prevent This
So now that we know how life insurance agents operate we can use this knowledge to get the policy and insurance you need without getting ripped off. First off, stick with term insurance only. Term is always cheaper. Also stay away from guaranteed acceptance life insurance, these policies will almost always cost way more than you need to pay.
Instead, shop the market for the best term policy. Call several local insurance agents to get quotes. If your internet savvy check out some online life insurance quotes as well. In the end you’ll be much more likely to find a better deal this way.
Questions? Leave a comment below.