I just met with a lady who had bought "Final Expense" from a very large and well known association for "Retired Persons" she is a member of. She had their term-life version which she thought was smart bcause se heard that term was always better than whole-life.
I ran the math for her:
She bought in at age 56 and is now age 58.
Age 56-59 pays 24.77 so that accrues to $891.72
Age 60-64 pays $36.88 and that comes to $3,104.52
Age 65 to 69 pays $50.75 which brings us to $6,149.52
Age 70-74 pays $75.65 and we are now at $10,688.52
Age 75-80 pays $123.02 for our final number of $18,069.20
If you live one day past 80 you get a "Thank you for playing card and a We won, you lost button." They also get a chance to try their luck again by buying their "whole-life" policy based on age 80 rates! Nice!
This is for a $20,000 policy. It's even worse for males.
How do these "Retired Persons" groups keep from getting exposed in this day of the internet? What's even more sad is in their TV ads, they offer a free calculator just for requesting the information. No one that understands how to use a calculator would fall for this.
I know what term life is and the advantages of it for young people. But I bbet that very few of these seniors who buy this are aware that they are buying a policy that they lose all their money if they live past age 80. I bet most of thm haven't figured out how much their payment increases (you have to call to get the age 76-80 amount out of them.) And I bet if you asked these people if they are "investing the difference" they would have no clue what you're talking about.
They think it's for final expenses. Final expenses don't end at age 80.
I find Seniors think AARP is their beacon of light, hope and truth. Since United Health Care, Secure Horizans has the AARP name (for MARKTING) Seniors are proud they are with AARP. I have to break it down to them, they are now paying $295 for 11 days in the hospital, 20% Out patient surgury, $100 per day from day 1 for skilled nursing. Do you have $3,600 or $195? Do you want to owe the hospital $3,600 or $195. So does it matter if AARP is on the title of your card if they are not paying your bills? They usally say change me, and I change them to Todays Ops, Coverntry or whatever is MUCH LOWER.
This is the page I tell people about when it comes to AARP plans.
AARP does not make health plan recommendations for individuals. You are strongly encouraged to evaluate your needs before choosing a health plan.
UHC just throws a bunch of money at AARP for the logo and member list.
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"Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it." Ronald Reagan
I just met with a lady who had bought "Final Expense" from a very large and well known association for "Retired Persons" she is a member of. She had their term-life version which she thought was smart bcause se heard that term was always better than whole-life.
I ran the math for her:
She bought in at age 56 and is now age 58.
Age 56-59 pays 24.77 so that accrues to $891.72
Age 60-64 pays $36.88 and that comes to $3,104.52
Age 65 to 69 pays $50.75 which brings us to $6,149.52
Age 70-74 pays $75.65 and we are now at $10,688.52
Age 75-80 pays $123.02 for our final number of $18,069.20
If you live one day past 80 you get a "Thank you for playing card and a We won, you lost button." They also get a chance to try their luck again by buying their "whole-life" policy based on age 80 rates! Nice!
This is for a $20,000 policy. It's even worse for males.
How do these "Retired Persons" groups keep from getting exposed in this day of the internet? What's even more sad is in their TV ads, they offer a free calculator just for requesting the information. No one that understands how to use a calculator would fall for this.
I know what term life is and the advantages of it for young people. But I bbet that very few of these seniors who buy this are aware that they are buying a policy that they lose all their money if they live past age 80. I bet most of thm haven't figured out how much their payment increases (you have to call to get the age 76-80 amount out of them.) And I bet if you asked these people if they are "investing the difference" they would have no clue what you're talking about.
They think it's for final expenses. Final expenses don't end at age 80.
It's been a while since I took a business math course, but isn't this about .46% annual interest? If I am correct, perhaps one could argue also, that she could do better putting that same amount in a savings account, and she would keep it after 24 years instead of giving it away. ( Some math major help me out here.)
Perhaps she does not understand the purpose of term insurance and its drawback. It's good to get $20K instant estate, but keep it too long, and it will cost you big time. I thought that's why they invented Universal Life. Something to phase in a cash accrual after the initial period....
Edit:
OK, here's what I found. The AARP site shows NYLife as the provider, and discusses "final" expenses under the heading "permanent" life, and discusses the pros and cons of both term and permanent policies. If she understood the differences between permanent and term as they are presented on the website, she should have asked for permanent.
She has only had two years with this policy.... so she's not out all that much, and in the meantime has had $20K protection. If she doesn't think she will live much longer, she may be better off keeping what she has.... sometimes people will not disclose everything, especially probable serious health issues that they can conceal.
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To be truly independent, an agent should not be dependent on a government bureaucrat for contracts or commissions.
I just met with a lady who had bought "Final Expense" from a very large and well known association for "Retired Persons" she is a member of. She had their term-life version which she thought was smart bcause se heard that term was always better than whole-life.
I ran the math for her:
She bought in at age 56 and is now age 58.
Age 56-59 pays 24.77 so that accrues to $891.72
Age 60-64 pays $36.88 and that comes to $3,104.52
Age 65 to 69 pays $50.75 which brings us to $6,149.52
Age 70-74 pays $75.65 and we are now at $10,688.52
Age 75-80 pays $123.02 for our final number of $18,069.20
If you live one day past 80 you get a "Thank you for playing card and a We won, you lost button." They also get a chance to try their luck again by buying their "whole-life" policy based on age 80 rates! Nice!
This is for a $20,000 policy. It's even worse for males.
How do these "Retired Persons" groups keep from getting exposed in this day of the internet? What's even more sad is in their TV ads, they offer a free calculator just for requesting the information. No one that understands how to use a calculator would fall for this.
I know what term life is and the advantages of it for young people. But I bbet that very few of these seniors who buy this are aware that they are buying a policy that they lose all their money if they live past age 80. I bet most of thm haven't figured out how much their payment increases (you have to call to get the age 76-80 amount out of them.) And I bet if you asked these people if they are "investing the difference" they would have no clue what you're talking about.
They think it's for final expenses. Final expenses don't end at age 80.
Newby, don't they have the option of buying the whole life plan before age 80. What does that look like for rates and undewriting? Or is there only some kind of weird arrangment with AARP where you can only buy term up till age 80 and then whole life from there? Weird.
Winter
------------------------------------ The Bolsheviks are dining in the capital.
It's been a while since I took a business math course, but isn't this about .46% annual interest? If I am correct, perhaps one could argue also, that she could do better putting that same amount in a savings account, and she would keep it after 24 years instead of giving it away. ( Some math major help me out here.)
Perhaps she does not understand the purpose of term insurance and its drawback. It's good to get $20K instant estate, but keep it too long, and it will cost you big time. I thought that's why they invented Universal Life. Something to phase in a cash accrual after the initial period....
Edit:
OK, here's what I found. The AARP site shows NYLife as the provider, and discusses "final" expenses under the heading "permanent" life, and discusses the pros and cons of both term and permanent policies. If she understood the differences between permanent and term as they are presented on the website, she should have asked for permanent.
She has only had two years with this policy.... so she's not out all that much, and in the meantime has had $20K protection. If she doesn't think she will live much longer, she may be better off keeping what she has.... sometimes people will not disclose everything, especially probable serious health issues that they can conceal.
No she's perfectly healthy. She...like most people I've met with the AARP term-life plan...didn't understand that it was term. She also didn't understand that the payment goes up every 5-years even though it is well disclosed on their advertising.
Some seniors (and future seniors) actually believe the AARP is an organization that looks out for them. They see the AARP logo and don't read the rest of the brochure.
End of the story is: she canceled this plan and I sold her a level premium $20,000 policy.
Newby, don't they have the option of buying the whole life plan before age 80. What does that look like for rates and undewriting? Or is there only some kind of weird arrangment with AARP where you can only buy term up till age 80 and then whole life from there? Weird.
Winter
They can switch over to the whole-life anytime they want but at the age they are when they switch and a two-year waiting period on coverage.
Many seniors are misled by this plan in my opinion. They put a misplaced trust in AARP. I always recommed they read Andy Rooney's latest book Amazon.com: Sincerely, Andy Rooney: Andrew A.... Where he talks about how 60-minutes exposed AARP to be selling sub-standard insurance policies to seniors at very high prices. The 60-minutes exposure is what actually allerted the feds who broke up the ownership of AARP which was a marketing wing of Colonial Penn Life Insurance back in the 1980s
[quote=retread;71047]It's been a while since I took a business math course, but isn't this about .46% annual interest? If I am correct, perhaps one could argue also, that she could do better putting that same amount in a savings account, and she would keep it after 24 years instead of giving it away. ( Some math major help me out here.) quote]
I actually flunked business math. But I can assure you that policy isn't .46% annual interest if she lived one day past her 80th birthday. it's a $18,069.20 loss.
She gets nothing. It's a really really bad deal if seniors buy it thinking of it as permanent coverage.
Bad Final Expense Product
Amazon.com: Sincerely, Andy Rooney: Andrew A.... 
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