By Marc Manor
I was thinking of what I subject I should tackle on this blog and just like a gift from
heaven above, it fell right into my lap. The TV was on and I heard a familiar celebrity
making a pitch for Life Insurance. His contention was that “price” was the most
important aspect of this guaranteed issue Life Insurance product for which you
“could not be turned down.” Every example he gave came with a monthly premium
of only $9.95.
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I thought this would be a good subject
because, I have had many people trying
to get Life Insurance to cover final
expenses and they are shocked when
I tell them what their monthly premium
would be for $10,000 to $20,000 of
insurance. Some will say, “I think I’ll
look elsewhere. Mr. Celebrity said
I could get insured for only $9.95”. So, I
decided to run a quote on their website
to see what $9.95 would buy me (using
my age and zip code) to protect my
family in the event of my demise:
$1,214.00 of insurance! Yes, I would
only have to pay $9.95 but how far would
that $1,214 go?
Let’s take a look at average funeral expenses
according to the National Funeral Directors Association (NFDA) for 2017:
Traditional
Non-declinable service fee: $2100
Removal/transfer of remains: $325
Embalming: $725
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Other preparation: $250
Use of facilities/staff: $425
Funeral Ceremony: $500
Hearse: $325
Service car/van: $150
Basic print package: $160
Metal casket: $2400
Total Funeral/Viewing: $7360
Vault: $1395
Total with Vault option: $8755
—-
Cremation version with viewing: $6260
I broke it down on the traditional version just to illustrate how much that $1214
might help. Right out of the gate, with the “non-declinable” service fee, I’m short.
I suppose I could get a few of those less expensive services taken care of with the
$1214. Not sure how you feel about it, but if I chose the tradition path, I would
have to go with my casket in “Heavy Metal” which would likely cost much more!
There are many more miscellaneous expenses and bills usually left behind as well.
What about credit card or hospital bills? Will those left behind be able to continue
their current lifestyle? Will recurring bills and other requirements remain in the budget
or will financial hardship occur? This are all important questions that the celebrity
does not address; but all you have to pay is $9.95!
Now this particular company (and most others) will allow you to buy higher amounts
of insurance, but their monthly premium goes up accordingly. To get $10,000 to
cover a traditional funeral with burial and other miscellaneous expenses, I
should expect to pay around $80 a month. Not bad, but still that is about 800%
of the sales pitch price of $9.95. Also noteworthy is when I ran a quote for final
expense insurance for a $10,000 death benefit, I found no less than 20 products
ranging from $36-$60 a month.
should expect to pay around $80 a month. Not bad, but still that is about 800%
of the sales pitch price of $9.95. Also noteworthy is when I ran a quote for final
expense insurance for a $10,000 death benefit, I found no less than 20 products
ranging from $36-$60 a month.
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guaranteed acceptance, and that is important to note that without any screening or consideration of pre-existing
conditions the insurance company is accepting more risk
with a guaranteed acceptance product and therefore, must require a higher premium. However, I did run a quote on a
website of another guaranteed acceptance product (using
the same age etc.) and it was $63 (again using my age/zip
code) for $10,000 which is approximately $15-$20
less than the product being promoted by the celebrity.
My point is this: There are many types of life insurance
policies out there and the landscape may be difficult to
navigate. Just basing your choices on a TV commercial
sales pitch is not likely going to get you the most value for
your hard-earned dollars. This particular commercial uses the perceived trust and
credibility of the celebrity to get seniors and other folks with other disqualifying
conditions to purchase this product because of the price. Remember that celebrities
are paid spokespersons and not licensed insurance agents. Licensed agents are
required to complete continuing education and are held to strict compliance standards.
A licensed agent can explain all the aspects of the policy, including price, to allow you to
make the most sensible decision before you purchase your policy.
As always, I recommend an independent agent with access to a wide variety of tools
and resources that can use objectivity to help you choose a plan that is best for you
regardless of the insurance company that issues the policy.
Marc Manor is a 30-year military veteran who is now dedicated to teaching his
fellow Americans how to make the most of their Medicare and Supplemental Insurance
benefits. As an independent agent, Marc has access to a wide variety of carriers with
an abundance of resources to find tailored solutions. There is no charge for a
consultation so call 904-222-0698 or email: marc@marcmanor.com.
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