5 Challenges Seniors Face When Buying Life Insurance – Podcast Episode 15

In this podcast, I’m going to be discussing the five challenges seniors face when buying life insurance. Let’s get right into this. The number one problem, and most obvious to many people is the underwriting process. So final expense life insurance policies, they have simplified underwriting process, which means that you have to answer some health questions, but don’t have to do a medical exam or blood tests or urine tests or anything like that. And what people really liked that is you can find out in with many insurance companies the same day, whether you’ve been approved, so we, we have a great preference for companies that we can find out on the spot.

If you’ve been approved, we don’t want to wait, you know, three days, five days, two weeks a month to find out if you’ve if you’ve qualified for a policy, because if something came up and you didn’t qualify through one company, we would want to turn around and find a company right away, that would actually approve you for insurance coverage.

Now, there’s a difference between the types of policies we help people with and the ones you see on TV, advertising on TV all the time. So we help people with first day coverage or benefits, which first day coverage means that if your policy were issued and approved today and went in force today, and you had a $20,000 policy, and you died tomorrow, you’d have made one payment.

So let’s say you made a $50 payment today on your policy, your policy is in force, and you die tomorrow, the insurance company would have to send a check for $20,000. It’s like, you know, too bad insurance companies, you just, you know, signed on the wrong client. But that’s what happens, right. But then there’s also the insurance companies also have clients where they sign somebody up, and they don’t die for a long time. And all they do is they just average out the cost over a large group of people.

But there are policies out there that have two year waiting periods, we’re going to discuss those in our number two topic. But yeah, the underwriting process is fairly simple, though, how we handle that, as we just get a basic medical overview from you kind of what’s happened in the past, and kind of any prescription medications, we kind of go really light on that. It’s not very intrusive at all.

And then once we get a basic idea what you qualify for, and then we go shopping. And then once we find the company, that’s going to have the lowest price for you, that’s also the best company, what we do is we’ll actually read through the questions on the request for coverage form from the insurance company. And that way, we just make sure we don’t miss anything.

And as long as everything goes, okay, there, then we’ll get on the phone with the insurance company, we’ll get some basic info from your name, address, kind of beneficiary, stuff like that, get you on the phone with the insurance company, and we’ll go through the process typically takes like 15 minutes.

And then most of the insurance companies we work with, we actually get an answer from you right over the phone so that you don’t have to worry about this anymore. Most people want peace of mind when they get this insurance. They want peace of mind knowing they got the best rates, the best service, they worked with somebody they trust, but they also got the best insurance, that’s going to take care of them from the very first day. So that’s all involved in the underwriting process.

Our number two challenge seniors face when buying life insurance is waiting periods. I already mentioned that a little bit. Yeah, there’s a lot of policies out there that have two year waiting periods. Pretty much if you see it advertised on TV. In most cases, that’s going to have a two year waiting period, you’ve probably seen, you know, those commercials out there for those plans that are like 997, you know, for only 990 something you’re gonna get bah bah, bah, blah, right?

Well, what they don’t tell you? Well, actually, they kind of do. It’s in the fine print and it blinks on the screen very briefly, it’ll say, like, limited benefit period. Well, I don’t know. If you think about limited benefit period. It sounds like you get something but it’s limited, right? It’s like well limited food while you don’t eliminate food. You just limit food, right?

So like if you’re on a diet but yeah, they say limited benefit, which means you get nothing It means that the first two years, if you die of any health or medical reason, you don’t get any death benefit, you don’t get any life insurance benefit, actually, what they would do is return your premium and pay you a small interest, like 7% 8%, maybe 10%.

So, I mean, nobody gets a policy or once a policy mean, unknowingly, that’s got a two year waiting period, like your auto insurance you would never buy from an auto insurance company that said, Hey, if you crash your car in the first two years, you’re out of luck. I mean, you would never buy homeowners insurance. If the insurance company said, hey, if you’ve got to claim any claim in the first two years, you’re out of luck. So that’s what two year waiting period plans do.

They basically say, hey, if if you die in the first two years, you’re out of luck, we’ll give you your money back a little bit of interest, but that doesn’t pay the bills for the final expenses. And the reason these policies exist, is for really sick people. It’s not for people that have normal average health problems like high blood pressure, cholesterol, diabetes, bipolar, kind of just all that stuff that’s fairly normal. It’s for it to your waiting periods are for people who like have a terminal illness, you know, they’re going to they’re guaranteed they’re going to die sooner versus later with dementia, people on dialysis in a hospital in a nursing home.

But kind of the the real catch there is you’ve got to ask yourself, if you’ve got any of those things going on? Are you going to live two years? I mean, dialysis? Yeah, a lot of people do so great on dialysis years and years and years. Dementia is not always the case. Right?

So if you’re currently in a nursing home or a hospital, boy, you know, that might be a concern for two years. So you know, really the people who are the sickest and need the insurance the most get restricted to those two year waiting periods. And before you’d like shed a lot of hate on the insurance companies saying why can’t they just give me insurance, they’re discriminating against me because I’m sick, or I’ve got medical issues, or this or that.

What No, there was a time in your life when you weren’t sick, there was a time in your life, when you could have qualified for the best insurance in the world. And you know what, you didn’t do it, you waited, you put it off, and then all of this stuff’s happening. So the insurance companies are there to stay in business, they have to make a profit.

Don’t think of the insurance companies is evil, because they want to make a profit, because you’re buying a plan, or you’re buying a policy that you need to be enforced, perhaps 10 20 30 40 years from now. And you want that insurance company to be profitable, so that they’re around. So, you know, if you want to look at somebody to blame, you know, the best place, I include myself in this the best place to look to blame somebody when something’s not going right is in the mirror, right? And then from there, you can start solving problems better.

But yeah, waiting periods, you should absolutely avoid those if you’ve got a policy right now, that’s got a two year waiting period, or somebody told you the only thing you can qualify for is a policy with a two year waiting period, reach out to us. And let us do our magic and see if we can’t help you. The third challenge seniors face when buying life insurance is inflation. Oh my gosh. And in recent days and months, we know all about inflation, don’t wait, it’s gone up from like, you know, 2% to 8%.

So when inflation goes up, the prices of goods and services throughout the economy go up as well. And getting a cremation done or a burial done any of that, that’s going to fall into the same category that goes up in price over time. So if you’re going to get a burial, or cremation or final expense, or life insurance policy to cover a specific need, like a burial or cremation, you want to get more insurance coverage than what it actually costs today.

 So let’s talk about a burial and burial right now on average costs around $10,000. You can pretty much walk into any funeral home in the United States, if you got 10,000 and they should be able to help you get it done. If not just walk out the door, lock two blocks down the road to one of their competitors and give them the money. But that’s that’s enough if you were to die today, but you don’t want to tie today.

Now, you don’t live a long time. So we know that prices do go up over time. So what we would lot of times help people with if it’s going to be 10,000 is maybe it 12,500 15,000 17,500 20,000 Whatever it is, it kind of depends how fancy you want your funeral to be. But yeah, we just look at your age, and help you understand kind of life expectancy and what what things should cost, you know, by the time statistically, you’re going to pass away. And we can do a really great job of adjusting for inflation.

So say it’s 10,000 today, and you end up with a $15,000 policy. Well, that not only inflation proofs, the plan, extra coverage right now, just in case there’s some extra bills, when you do pass away, if you pass away early, like maybe medical bills or credit card bills, you know, stuff that if given the gift of time, you would eventually pay those off. But because you died sooner than you thought they were still there. So it works really well, to be able to provide a little bit more coverage on the front end, just to take care of some of those other final expenses.

Now, the fourth challenge seniors face when buying life insurance, is age limits. So many different insurance companies out there, offer different age limits, we’ve got some, I’ll just run over some in my mind, we’ve got some that go from 50, to age 80. And I’ve got one that goes from age 45, up to age 85. Got one that goes from age 50, to age 89.

And then there’s another one that goes from age 18, up to age 80, or 85, I believe. And then we’ve even got ones for for kids policies for children. And we’ve got a bunch of different different other insurance companies too. But they all pretty much kind of fall into that that range. So there’s pretty much not anybody that we can’t help insurance policy wise. But, you know, I guess one of the challenges with age limits is also just the expense.

Well, I’m going to talk about that number five premiums. But yeah, age limit is going to be the biggest thing, because if you’ve got some specific health issues going on, and one company doesn’t go up to the age that you’re at, so say they go up to age 80 And your ad one, you know, you will have missed by one year an opportunity to get a an insurance company that’s going to offer much lower premiums, maybe some additional benefits and riders on there, too.

So the message really there is just get this insurance before you need it. You know, it’s like if you were had a car, and you got in an accident, you didn’t have any insurance. So you’d bought it two weeks ago, and you didn’t have any insurance, and you got in an accident. And then you go to the auto mobile insurance company and you say, hey, crashed my car, you know, I bought it two weeks ago, I need to get this insurance right now.

And then you can fix my car, they’re gonna go You’re crazy. They’re gonna tell you what you would have had to have this insurance before you crashed the car, you can can’t go just crash your car and then get insurance and write us $100 premium payment and this replace your $40,000 car. You’re crazy, right? So yeah, you need any type of insurance. It’s meant for that? What if like, What if I die sooner? What if I crash my car? What if my house burns down? Right? So you need to get get the insurance before you actually need it. So just be aware of those age limits.

And then the fifth challenge seniors face when buying life insurance is the premiums. And you know, what we’ve seen and what we’ve experienced over the years at funeral friends in America is so many people are so busy living that they don’t think about dying. And when that happens, we just naturally get older, my dog turned 13 years old the other day.

And there’s just no way that I can process in my mind that I’m like 13 years old, as well. I think I think only the dog aged. I don’t think I did. But you know, we both got gray. So I think we both did get older. But yeah, I mean time just slips by. And, you know, everybody knows they’re gonna pass away. Everybody knows they should get this insurance.

Everybody knows they shouldn’t burden their loved ones with these final expenses when they pass away, that people are so busy living they don’t think about dying. And when the older we get, the more expensive the insurance premiums get.

So just be aware of that you’ve got to be you’ve got to be father time and get this before you need it. And, you know, most people wants to get this insurance early, just like so grateful they go I’ve got I’ve got the peace of mind now that, you know, my family’s not going to have to worry about this. And I finally found something that’s going to fit my budget now. If the if the premiums are a little high for you, you know, just understand most of the people we work with are on fixed or limited income, they’re on Social Security or disability.

So if the premiums are a little higher than you think, just get what it is and what it’s going to cost today. So like If you’re going to do a burial get $10,000. Right now that takes care of the bulk of your burial final expense costs, and will significantly protect your family. Don’t worry about the inflation part yet, just get that basic amount of coverage done.

God forbid you died today because we offer first day coverage. So if your policy gets approved and goes in force today, and you die tomorrow, it’s going to at least pay out 10,000. And then what we do over time is we work with a lot of people.

And we just add coverage over time. So maybe in 2,3,4 or five years, things have changed for you your incomes gone up a little bit, you get some of those social security adjustments, or maybe you had another bill fall off, and we can help you get that additional $5,000 coverage or 2500, whatever it would be, but we can definitely help you out and do our best to kind of beat Father Time into submission and get you the lowest rates.

NOTE: Show notes are AI transcribed, so there may be some spelling or grammatical errors.