Don’t be Fooled- Are you properly prepared to leave a legacy behind?
Per the U.S. Census, there are 76 million baby boomers, and they will all reach 65 or older by the year 2030.
Per the U.S. Census, there are 76 million baby boomers, and they will all reach 65 or older by the year 2030. Unfortunately, the necessities no longer only cost a nickel and it’s getting more challenging to leave a legacy behind.
These retirees are or will be living on their social security along with any retirement income they’ve managed to save. Due to societal norms, wise investing, strong economic conditions, and father time, many of them are living comfortably and can live out their years and still leave a legacy behind. Unfortunately, this is not the case for nearly enough of the 76 million in the baby boomer generation.
As the end of life approaches, and the wave of inflation impacts the value and availability of a good old fashioned “early bird special”.
Needless to say, the market for seniors seeking financial security is vast. This is evident when you tune into daytime television. The ads for medical services, hearing aids, and senior centers are hard to miss in between the ads hammering the need for retirement planning, life insurance, and burial services.
Why are these ads so dominant? Well, let’s talk about the most prevalent need- Life Insurance. Regardless of how well you’ve planned for this stage of life, you could almost always justify the value in having a good life insurance plan in order to ensure or contribute to your legacy. The market is huge and the need is clear. That’s why the advertisers don’t give up. What they don’t tell you though, is that life insurance is not a one size fits all product for seniors, despite how it’s often perceived through ads.
There are many options for leaving a legacy when it comes to life insurance. The healthier you are, the better the options. Let’s explore that concept further.
Of the majority of life insurance products marketed to seniors, the main types fall into 2 categories: Guaranteed issue and Simplified issue, and they have one distinct difference- the degree of ease in order to qualify.
Andy Cohen, Pivotal’s co-founder explains: “Guaranteed acceptance plans are well-known to seniors. They’re provided by companies like Colonial Penn and marketing through AARP, so they dominate Daytime TV ad space and overflow your mailbox with junk. They promote unreasonably low rates that are vague and not well understood- many consider them misleading. Since they do not require medical exams, it intrigues many seniors-whether healthy or not. The advertisements state that there are no health questions or medical exams required, which mean that the carriers have minimal to no underwriting rules required to qualify. In other words, they don’t care if you smoke or not, or what health state you’re actually in. That’s because- with all of these ‘guaranteed issue’ plans, there is a standard waiting period of 2 years. The only payout received (for natural passing during the first 2 years of the policy) is a return of the premiums that have been paid in. That means that the insured must pay premiums for 2 full years before the face amount is actually available. That’s not ideal for most seniors, but that is the standard for those in poor health.
While the market for Guaranteed Issue is vast, the most common life insurance offered to seniors is completely different. They’re referred to as Simplified issue products. No, they’re not guaranteed to be issued, but the underwriting requirements are not unreasonable, and if issues, they provide immediate coverage. These policies do not require medical exams either, but the underwriting typically consists of 10-15 medical questions. Those questions are asked on the application in order to ensure that there is nothing terminal, chronic, and serious that would greatly impact the life span of the applicant. The insurance carriers verify the applicant’s answers by reviewing their medical report and pharmaceutical history.
So, if you’re even moderately healthy, you have a good chance of qualifying for life insurance that pays all benefits from day 1, and is actually more affordable.
Another reason these ads are so prevalent is because many people took out Term Insurance and Flexible life insurance 20-30 years ago during their primary earning years. But those folks are soon retiring or already living on fixed income. In many cases, their policies have already expired, or in order to maintain them, premiums shoot through the roof, making them impossible to hold onto. Either one of these scenarios will severely impact stability of aging Baby Boomers, much less even the idea of leaving a senior legacy behind.
Reach out now to discuss your legacy life insurance options. We’re here to educate you on all of the available products that fit your needs. Call now: 561-412-5500.
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About Pivotal Life Insurance
Pivotal Life Insurance is a family owned, independent insurance agency that focuses on income protection and family security through Life Insurance products (Term Life, Whole Life, Final Expense), Mortgage Protection and Annuities. With a range of product offerings, we accommodate the varying needs of our clients through resources provided by the nation’s top rated carriers. Although we are headquartered in South Florida with a branch in Maryland, we service most of the United States as our agents are licensed throughout the country. Pivotal Life Insurance is one of the fastest-growing agencies and we pride ourselves in putting you, our customers, first.
Insurance Is Pivotal. Cherish what’s important.
For more information or if you’d like to join the Pivotal family, visit www.insuranceispivotal.com or call at 561-412-5500.