Senior Insurance - Watch The Fine Print
Life Insurance for seniors is probably one of the most advertised products in the USA. We have all seen those commercials sold by former celebrities telling us how happy they are that they can now be able to sleep soundly knowing that their heirs would not have to go through financial pain after they pass. “For only $5 a month, you will get a $10,000 protection. We guarantee that the rates will not rise and everyone, no matter their health will qualify.”
It is very tempting to a senior citizen who spends wondering what he can leave his heirs and who wouldn’t want a $10,000 cover for only $5? Unfortunately that is the only good story about these policies. There is a lot of double speak with these senior insurance policies and next time you wish to buy one, don’t look at the celebrity, look at the fine print. I have gone through a few and without naming the companies, this are the common facts not told in those insurance policy advertisements.
1. Policy Coverage
The first catch is the $10,000 insurance cover. A huge bulk of senior life insurance covers only accidental death. You will find that if you were to pass due to illness or natural causes you might get less than a third of the insurance cover. In one of them ,your heir would only get $2,700 if the death was not accidental.
2. Period of Insurance Protection
No one is turned down for senior life insurance mainly because most of them only start the insurance after 2 years of continuous premium policy payment. Miss one, and the policy may be void. If you pass before the 2 years are over, your heirs may only get the premiums paid. After 24 months of $5 payments, your heirs may only get $60 in death benefits.
3.Insurance Rate Guarantee
The biggest selling point in senior insurance coverage is the fact that the rates are guaranteed not to rise. However, note that the coverage falls each year as you get older.Your insurance coverage might start at the $10,000 , however each year you get older ,your coverage gets lowered. I know of a couple who’s mother’s cover after 25 years of paying $5 per month were paid a total of $225 in benefits. It’s sad but true that she had paid some $1500 over the period.
4. Causes of Death
Insurance companies have a habit of never informing anyone what constitutes an accidental death or otherwise. Before you sign up for a senior insurance policy, read the fine print of what constitutes accidental death. Remember most of these insurance covers accidental death, so insurance companies will list as many things as possible as being not accidental. If you had half a glass of wine and you were hit crossing the road, do not be surprised if your policy pays it out as non accidental.
There is more to watch out for when buying senior life insurance. Just ensure you read or get as much information before you spend that $5 per month. You might find out you are better served just setting up a savings account in the long run.
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