In today's mail I received an interesting card. On the front was the word "Support". Inside, it says:
Dear Alzheimer's/Dementia Support Group:
Since 1988 I have served many thousands of people in my life insurance and retirement planning practice. I am able to provide life insurance coverage for persons with Alzheimer's disease and dementia. They cannot, however, be in a nursing home or in the final stages of the disease. This coverage is through a fifty (plus) year old insurance company. This coverage can provide much needed funds at a very stressful time. I would be happy to email you my resume and several personal references. Please contact me if you're interested in exploring how I may able to help families who have relatives with Alzheimer's disease or dementia.
It is then signed with the agent's name, business address, office and cell numbers and email address, and the address of his website.
Has anyone else received anything like this? Does this sound like a scam--I don't understand how any insurance company would sell a policy to someone with a terminal disease, regardless of the cost. Ironically, we also received a letter today from AARP addressed to my husband about life insurance with no medical exam, all you have to do is answer 3 questions. Has something changed in the insurance industry? Is it the economy?
After I posted the above, I checked the guy's website. He says he is also a motivational speaker, has written a book, owns a greeting card company, and he and his wife have adoped 6 kids from overseas (there is an article reprinted from a community paper telling about the adoptions). I can't believe that the insurance thing is for real.
Some of these may be legit to a point - they will sell you insurance. They make money on the bet your finances will get bad before the person dies thereby canceling the insurance. But, in the meantime they got money out of you.
Mine to Imohr. he retired from "You're in Good Hands" Company. It was a really small company when he started but now it is one of the leading ins, co. He hated the life contests they had every year.
The AARP pitch is legit. The catch is, you can't answer the questions in a way to qualify. They are the way the company sifts out the people with significant problems.
Just wondering if the insurance is effective, and covers death due to medical reasons.. I have a policy and often wondered if the coverage limits it to accidental death. I read the policy several times, and cannot really figure out what it covers. I believe any accidental death will be covered, but I often wonder if natural medical reasons will effectively negate this. It could be that medical conditions will not have the full value of the coverage..
At an AD support group, the facilitator recommended the AARP insurance as being the only one able to qualify for. Don't know the three questions they ask.
I don't know anything about this policy directly. I was a life insurance agent back in the early 80s. I'd expect that most policies offered to people over the age of 50 go something like this. They are whole life policies. They don't require health questions or a health checkup. They aren't cheap, but they aren't all that expensive either, and they are for rather small amounts of money. Since the AARP policy is intended for older people I'd be surprised if it didn't work like all of the rest of them. Back when I was an insurance agent, their policies did work this way.
So what is the catch?
The catch is generally very clearly stated up front. If the insured dies during the first two years the policy pays a return of premium and not the face amount. If the insured dies after the second anniversary, the policy pays the face amount. When I was an agent ALL of the major companies sold these policies.
And please notice, that if a 30 year old, or anyone else for that matter, buys a regular policy and dies during the first two years they will check with the doctor to find out if that 30 year old knew they were dying. And if they did know they do not pay the face amount of the policy. Back in the late 80s my BIL died less than a year after he bought a new life insurance policy. He died from pancreatic cancer. His doctor was contacted and expressed shock that he had survived as long as he had. Once it was obvious that my BIL did not know he was sick when he bought the policy, the money was paid to my sister.
None of this is new. They were selling these policies 30 years ago. They still are.
i think AARP offers up to 10k for life insur regardless of health. no tests so it would be something they could qualify for. not much but something. divvi
You are right, divvi. This is from the AARP website:
"This group insurance can serve as a source of cash to help pay off outstanding mortgages or loan balances...increase a surviving spouse's retirement nest egg...offset final illness and funeral expenses...or leave a legacy for children or grandchildren. Proceeds can also tide a beneficiary over until pension or Social Security benefits become available. You can't be turned down for AARP Guaranteed Acceptance Life from New York Life Insurance Company. Because acceptance is assured*, AARP Guaranteed Acceptance Life pays limited benefits for the first two years for death resulting from other than accidental causes.
There is no physical examination required, and no health questions to answer. Coverage can be retained for life. AARP members age 50 to 80 may apply for this coverage. Spouses of AARP members may apply beginning at age 45."
Before giving AARP life insurance a moment’s thought, know this: You can’t buy more than $100,000 in term coverage or over $50,000 for permanent (the type of insurance with cash-value savings). Rates for term insurance — sold to AARP members age 50 to 74 — are guaranteed for five years. When the term ends, you can continue coverage at whatever new rate the company imposes without reapplying. The insurance also lets a policyholder who is diagnosed with a terminal illness and has a life expectancy of 12 months or less access half the benefit before death. This latter feature offers some assurance that you’ll have the cash to cope with unexpected medical or other costs, if needed, at the end of your life.
AARP permanent life — for members age 50 to 80 — is paid in full at age 95. At that point, you can stop paying premiums but your coverage will continue for life. Permanent insurance is a poor choice for people over 50, however, says Gary Schatsky, president of ObjectiveAdvice.com and a New York-based fee-only financial planner. “For most people that age, there are better ways to save,” says Schatsky. “And term insurance could pay your estate tax bill for less money.”
The most enticing part, if you’re over 50 and want to buy term insurance: You can apply for an AARP policy without getting a physical exam or medical tests. AARP has what you might call a modified “don’t ask, don’t tell” approach.
An applicant must generally answer a few simple health questions. If you’re buying a $50,000 policy, you only need to say whether in the past two years you’ve been treated or diagnosed for heart trouble, a stroke, cancer, lung disease, or diabetes or have been hospitalized or institutionalized. You’ll also need to note whether you had any medical treatments or diagnostic tests in the past three months. So, a heart bypass surgery five years ago won’t count against you. And if you had a hip replaced in the past two years, you’ll probably be approved if you’re otherwise healthy. Smokers and drinkers are welcome, as are scuba and skydivers. (A $100,000 policy includes a few more questions and goes back five years.)
By contrast, most life insurers have tough underwriting standards that may include dozens of questions about your health over the past 10 years, an inventory of your prescriptions, your driving and credit records, risky hobbies, your weight and blood pressure, plus blood and urine samples. And insurers tend to be very leery of risk takers like scuba divers and sky divers. So, if you’ve been turned down by other insurers or fear you would be, you’re likely to find the AARP standards suit you well. Nearly 80 percent of applicants for AARP term insurance are approved, for example. Cost of Convenience
AARP’s convenience, however, comes at a cost. “If you compare the policies to insurance with more comprehensive underwriting, they’re more expensive,” concedes Hisey. A 55-year-old woman buying a $50,000 AARP term policy might pay $671 a year for five years and then $1,034 a year for the next five years. If she was in excellent health, she could get double the coverage for $205 per year (rate guaranteed for 10 years) from Genworth Financial, an A-rated insurer.
“I don’t know why anyone who could pass traditional underwriting would be interested in AARP’s product,” says Sheryl Moore, founder of AnnuitySpecs.com, a Des Moines firm that provides research on annuity products. But, Moore cautions, “not everyone can pass traditional underwriting.”
Sid has a term life insurance policy that is scheduled to run out in 2 more years. How is it possible to get another policy for him? Besides the fact that he has Alzheimer's Disease, he has to answer "yes" to those "few simple questions." He has diabetes and is being treated for high blood pressure, high cholestoral, and high tricgylcerides. No one is going to insure him.
Same for me - I am paying $300 a month for $100,000 policy, and they would only give it to me for 10 years, because I am overweight by way too many pounds, and am being treated for high blood pressure.
If I were paying $300 a month for life insurance I would rather be paying that amount for LTC policy. True I know I will die, but for me I'd rather gamble on being protected should I need care while alive.
joang, most of the term policies have a clause where you can convert to whole life at the end of the term. Read Sid's policy and see if it is covered this way, it would be expensive but might be something you would want to do.
Bluedaze, I seriously doubt someone with alz. could obtain LTC Insurance. Paul was turned down even before official diagnosis when he was taking no meds except allergy meds. No reason given. Once you are "turned down" I doubt anyone else would go beyond that.
I think Bluedaze was referring to LTC for me. The problem with me getting LTC is the same problem with the life insurance. Too overweight with high blood pressure. Since we had our financial meltdown, I must have life insurance, because it is the only money I have for Sid's care if I die before him.
Jane,
Thank you - I am going to call about Sid's insurance this week.
note that most life insurance policies apps will have a question for if you have been turned down or denied coverage-. once you answer that yes you are in trouble. divvi
Nope. I've never been turned down. Just forced to pay a lot. I've got another 9 years left on my life insurance policy, so I'm not going to worry about that one now. My main concern right now is getting Sid's life insurance extended. We've been with the same company for at least 15 years, not that it would mean anything to the insurance company.
joang, some policies have a built in option for you to be eligible to continue with certain coverages beyond the expiration date. I would recommend calling your Agent or the company now and see if the option is available for you. Won't hurt to ask. Paul sold Life Insurance many years ago and I know at that time some policies carried that option.
Yes, I believe that is true.....one advantage to some policies.........never having to have another physical. I'm sure there is a catch, but, we can hope!
Read all the fine print in your policy. Our term life policies have the option of continuing coverage at a high rate that increases as you age. I think it jumps from $260 a year to $1100 the first year after the policy term. Their carrot is that you would reapply, get a physical and get approved for a lower rate. None of our LO would qualify for life insurance with their diagnosis so for us the only option is to pay that high rate if we want the coverage. This sounds a bit callous but we have to trade off life expectency with the cost of that coverage and it might be financially worth it to continue the coverage at the high rate.
Catherine, that is correct, you have to decide if it is financially worth it. One thing to consider would be if the loved one is in a stage of an illness that life is not expected to last much longer. Example a term life ends at lets say age 76, the loved one is turning 76 and is not expected to live much past that age, maybe a month or two, in a case like that it might be worth a great big increase of payment in order to receive the full face value, seems like gambling and it a sense it is but yet life insurance is a gamble, it is something you buy, hope you never need it but if you do you are glad you have it.
Any person who owns a term life insurance should be aware that most policies allow this conversion as long as it is done before the term ends and should consider it if the situation seems to warrant it.
John and I both looked into long term care insurance years ago....the company with the duck as a mascot. John was turned down because they found he had had a diagnosis of dementia, high blood pressure and high cholesterol. I was turned down because of my sports injuries and that I continued to participate at that time in what they called an "extreme " sport. So, I've never looked into it any further.