Financial Answers "IN SIMPLE LANGUAGE"

It never ceases to amaze me how certain industries continually try to take advantage of baby boomers.  These baby boomers-I am one of them- are constantly being preyed upon by unscrupulous companies in various advertising schemes that really bugs the hell out of me.  Just watch your television and take note to all of the advertising that is directed at boomers and you’ll see what I mean.

Now you may be thinking that as a baby boomer you should be aware of what is available to you so you can keep abreast of the various products and services that are available to make your life easier and more comfortable.  I don’t have any issues with that at all.  It is the dirtbag companies out there that target you and me and try to take advantage of us with their misleading and deceptive advertising.

Since this is a financial blog, I will give you an example of a financial product that is being deceptively marketed to us…life insurance.  Now I don’t hate all life insurance companies.  I think that life insurance can be a very important part of someone’s life planning. Life insurance has prevented many families from suffering hardships when the major breadwinner of the family dies unexpectedly… life insurance companies have their place.

With that said, let’s talk about the dirtbag life insurance companies that specifically target baby boomers with their expensive products.  Let me give you a specific example of one life insurance company that is constantly advertising on television with ads that make it sound as though they were doing you a favor.  They act as though they are actually providing you with something that was low cost and beneficial to you and that you “must” have in order to protect, at least, part of your financial well being in the event that your spouse died.

Here’s What I’m Talking About

So what am I talking about?  Remember seeing the television commercial with a husband and wife and the wife is asking the husband when he is going to fix various things around the house?  And the husband says he will get around to the chores but first he has to buy life insurance.  The wife looks surprised and says “life Insurance”?  The husband then explains to the wife how easy it is to get this life insurance and how inexpensive it is.  This is the part that bugs me.

Again, I don’t have any issues with life insurance but I do have an issue with any product that is sold without making the facts clear and understandable.  This example is such an issue.  The husband tells the wife that the insurance can be purchased without a medical exam.  Okay, that’s good.  Then he explains that the insurance is only $.35 per day per unit and how cheap that is to protect them from high funeral costs.  Sounds good on the surface, but let’s look at the numbers.

First of all, a unit is $1,000 of life insurance coverage.  $.35 per day times an average of 30 days per month equals $10.50 per month per $1,000 of life insurance coverage.  Now I don’t know about you but $1,000 doesn’t buy much today so you would need a lot more insurance.  Let’s say you need $10,000 of coverage since the average funeral is between $6,000 and $8,000.  So it costs $10.50 per month per unit times 10 units equaling $105.00 per month times 12 months in a year or $1,260 per year for a $10,000 life insurance policy.  Does that sound inexpensive to you?  If you pay on this policy for just 8 years you would have paid $10,080.00 for $10,000 of coverage.  Does that make any sense?  Who’s taking advantage of whom?

Of course the insurance company will say but you don’t have to take a medical exam so we are totally at risk and what if you should die after the first year or two?  Then who is the winner?  You will have to decide the answers to these questions for yourself.

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