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Life Insurance Offers By Mail

Everyone has seen the ads featuring a well-known Hollywood star and his wife pitching Mail-Order Life Insurance. Everyday thousands of policy offers are sent through the mail, landing in mailboxes nationwide. They offer premium coverage at an extremely affordable cost to consumers, especially seniors. For those without life insurance, who cannot qualify for a standard policy, nor have only small personal policies, these mail-order offers sound like an easy and affordable option to provide their families with at least enough money to cover funeral and medical expenses. Plus there are no agents to deal with, which can also be attractive to some consumers. However, mail-order insurance carries great risks when purchased.

Potential Risks of Mail-Order Life Insurance

For one, the fact that there are no agents mean there is no one to explain your policy and no one to deal with personally, so no attention is given to your individual needs. Even though there are no salaries being paid to agents, the companies still need to cover the cost of mailing the offers and advertisements, so the cost of their premiums may not actually be any lower than a standard policy, especially since they are covering a greater risk because of their wider availability and they know less about the consumer buying the policy.

Before signing your name to any mail-order offer and returning the contract, it is best to look into more traditional insuring methods, or at least investigating the company and asking an insurance professional to explain the contract to you. Though you may think you are providing your family with some peace of mind, you may actually think you’re signing up for something only to find out your coverage stops at a certain age in the future, the payments creep up as you get older, or you might have a medical condition or take certain medication that might make you ineligible for the coverage in the fine print. This is normally found after you’ve passed away when the family is sorting through insurance policies and taking care of final arrangements. Always proceed with caution when it comes to buying mail-order life insurance.
Here’s a review of some common offers that we hear about as we visit our customers and go through what companies are sending out.

We typically see mail-order life insurance products from:

AARP Life Insurance
Globe Life
Stonebridge (Direct to Consumer) Life Insurance

AARP Life Insurance Program

Group whole and term life coverage plans for AARP members to help protect your loved ones. AARP selected New York Life Insurance Company to develop a group life insurance program specifically designed to help AARP members protect their families. The program offers whole and term life insurance coverage that feature affordable premiums and valuable benefits designed for people age 50 and older. Coverage is available in a wide range of amounts—from $2,500 up to $100,000.

AARP members age 50-80 and their spouses age 45-80 are eligible to apply. No medical exam is required to qualify for coverage. For most products, acceptance is based on your health information. You can apply online or by mail in just minutes. And if you’re not already an AARP member, it’s easy to join and apply at the same time. We find that many seniors have signed up for Life Insurance through the mail from AARP. There are a couple different types of plans. AARP sells for New York Life. This is the most popular mail order life insurance offer by far.

During a visit with seniors with this plan it’s good to review the policy and go through the contract. In some cases the owner of the policy thinks they own a whole-life policy, when the fine print describes something different. What they really have is a term life plan that raises their premium every 5 years. Their premiums increase when their age ends with a 0 or a 5. (when they turn 55, 60, 65, 70, etc.) The premiums will go up in the policy anniversary month not their birthday month. Some products offered by AARP ends when they reach their 80th birthday. In that case all the money they paid into the policy is lost.
If you have one of these policies where the price has gone up as you’ve reached one of these age bands, take a look at a modest final expense whole life policy that will provide permanent protection for your family with payments that never increase.

Globe Life

Globe Life sells an increasing premium term to age 90 life insurance policy direct to the public mainly through direct mail. The rates increase every time the insured has a birthday that ends with a 1 or a 6. In the case of a policy like this, the coverage simply ends at age 90 with no cash value. All money paid into the policy is lost.

Smokers and non-smokers pay the same rates with this Globe plan.

It’s helpful to review the application and double check to make sure you medically qualify for 1st day coverage. Some policies like this do not accept individuals who were treated (including medicines) for any form of cancer, any disorder or disease of the heart or coronary artery disease, kidney disease, COPD, and some other described conditions going back 3-years from the application date. It’s helpful to review these applications to ensure you know the status of your coverage and when it ends.

Stonebridge (Direct to Consumer) Life Insurance

Stonebridge Life offers Guaranteed Issue policies sold by mail and telemarketers directly to consumers. They are two year ROP (return of premium) regardless of health. That means some people who are healthy enough to qualify for whole life coverage might have been sold a two-year graded policy. Without a review by an Independent Life Insurance Agent a consumer might not understand this feature. A review of the policies in force might reveal a chance to put a permanent policy in place for the same or at a better rate.

As a general rule, any policy bought through the mail sold directly to the consumer is risky for the consumer. It always helps to have a second set of eyes to help understand what a policy contract says so one can fully understand what kind of coverage is being purchased. Nothing’s worse than someone owning a policy only to find out it’s not the coverage they thought they had. Unfortunately in this case it’s the family and loved ones that get to endure this bad news.

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