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Shameless Commerce

We’ve all suffered through the ads.  Some nicely dressed, suitably sad  matrons are doing the washing up while talking funeral talk.  ‘Isn’t it sad about poor Sally?  Now he’s gone and he didn’t leave her any life insurance…’.  They cluck, shake their heads in pity for the widow,  then immediately launch into a brisk little pitch for a funeral policy.   And there are lots of others just like this one, for long-term care, mortgage life, self-funded healthcare, Medigap, disability – it never ends.

Seniors and the elderly are very cleverly targeted in these campaigns and many inappropriate tactics are used to get their attention, then their credit card numbers.  We get a bit vulnerable as we age, sometimes easier to manipulate.  One woman explained to us that she bought useless – but expensive – coverage from ‘the nice young man’ she met at the senior center because he reminded her of her son, a 48-year-old CPA she only gets to see three or four times a year.  She trusted the stranger because he seemed familiar – and he paid attention to her.

Blatant scare tactics are also popular with unscrupulous sales people.  They claim a current policy is in danger of lapsing or being cancelled or that the insurance carrier itself is not financially sound enough to pay out claims.  There are also pitches that offer very low monthly premiums at first, but, once the contracts are signed, the small print gives the insurer the right to charge their credit cards much, much higher monthly premiums thereafter.  Many seniors are so ashamed of themselves when this happens that they hide these transactions  from their children or caregivers – something these sales people count on.

Are you looking after your parents or other elderly loved ones or friends?  You’ve got to be in the loop as far as their insurance is concerned.  Find out what policies they have, how they are paid for, what’s involved with making a claim.  You’ve got to sort out what they already have, what they actually need, what will actually provide coverage should there be a claim, and what you can let go or replace.

Again, we admit that insurance stuff is rarely thrilling.  Keep in mind, though, that good, correctly written and placed policies are invaluable, worth protecting, worth paying for.  The other junk, the questionable policies or utterly unnecessary coverage, that’s what you’re after.  Here are some guidelines:

  1. Talk insurance.  Granted, financial discussions are tricky, emotional, invasive.  So be tactful – but hold your ground.  Let your parents or other seniors know that their insurance is a very important aspect of their finances and that you need to know everything about those policies.  This way, you will be able to file claims as needed and otherwise manage the accounts properly.  Do not scold or criticize their decisions – just make sure they are getting value for money and that their present needs are being met.
  2. Create insurance files: Set up a folder for each policy, containing a copy of the policy, contact information for the carrier, and any correspondence.  If you can, get credit card statements and/or checkbook records listing the payment amounts, dates and history for each policy.
  3. Analyze the policies: Read the policies.  Who is the carrier?  What kind of insurance is it? Whole life? Term? Critical Illness?  What is the annual premium amount paid?  What is the actual or probable cash value of the policy?  Who are the beneficiaries?  Are they still alive?  Who has been named as the person or persons authorized to ask questions about the policy, make claims or even cancel the policy?
  4. Why was a policy purchased?  You should have no trouble figuring out if a policy still makes sense  or has any real value.  You may be able to cancel an unneeded policy and save hundreds or even thousands of dollars a year for your parents.  The policy itself will have cancellation instructions.  Identify yourself as an authorized caregiver for your parents with the insurance company.  If in doubt, check with a trusted agent or attorney before you cancel.
  5. Review the auto insurance.  Depending on when they purchased their coverage, your parents may be paying a mileage rate that’s no longer accurate.  Maybe they used to cover 15,000 miles a year, but now it’s more like 850.  And perhaps the valuation of the car itself can be adjusted downward.  Both these updates can reduce the premium.
  6. Contact their local agent or broker.  A representative of a quality insurance company will likely be happy to work with you to adjust the coverage and benefits of a policy or policies they sold to your parents.  You will need to make the first move, though – it is not the broker’s job to evaluate the insurance coverage every year.
  7.  Check the life insurance situation.  This applies to life or long-term care policies recently purchased by your parents – in the last three years or so.  It is very possible that these late-in-life insurance acquisitions have annual premium costs that are more than the payment benefit.  You may be able to cancel such plans and shift the annual premium cost to an interest-bearing bank account or trust account.  A good bank counselor may be able to help you – at no cost for the service.
  8. Stop the flood of telephone pitches and mailers. If your parents ever responded to any insurance pitches, they are on a list somewhere as good prospects.  Register them with Do Not Call and Do Not Mail list services.  Check out the National Do Not Call Registry’s website.
  9. Get help from elder advocates.  Your local senior center or area aging agency may have volunteer consultants in the insurance matters.
  10. Ask for help from friends and family. If you have any friends or relatives in finance or insurance, ask them for help with the policies purchased by your parents.  Insurance is complex – the more educated input, the better.
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