My 90-year-old grandmother sits at her kitchen table surrounded by four large stacks of mail.
The first stack is for solicitations from hunger relief organizations. The second, church fundraising drives. The third is for educating third-world children. And the fourth is for environmental organizations. She holds her checkbook open on the table with her elbow.
Each organization gets one to two dollars, depending on how much she gave them last year. They’re all important causes, she explains. And besides that, she feels like she at least has to balance out the cost of the free return address labels they send every year. She tells me that on the one hand she wishes she could give more, but on the other hand, she’s totally overwhelmed by everyone asking for a piece of the pie and she’s frustrated that so many people are pestering her over the meager amount she has left in her retirement fund. She admits that since her hip replacement – titanium, luckily, not one of the recalled ones — she’d much rather spend her money on making the stairs in her house safer. But she’s just too kind and to let those envelopes go empty.
She never expected to live to 90, she says. And living these days is just plain expensive.
Younger generations who have grown up alongside the internet have become very familiar with a skill that was rarely necessary in the age of their parents and grandparents. They’ve developed the ability to quickly sort through a huge number of advertisements and data, and glean only what’s valuable. This new way of filtering the world is changing the way their brains work, for better or worse. The elderly never had to worry too much about sifting through all the schemes on the internet, so they are naturally less-skilled at navigating the overwhelming world of people and organizations trying to take advantage of them.
One of the most talked-about scams targeting the elderly is the reprehensible “life insurance scam.” While the world we live in is so rarely black and white, the delineation here is quite clear: there are wolves out there, with nothing but malicious intent. It’s important to know how to protect yourself and your family. Fake brokers and companies talk seniors into giving them their money, often in increasingly large sums, and because the seniors have faith in them as trusted advisors, they’re all too often fooled.
But with the right information at hand, you can be sure that you and your family will not be fooled by scammers. Here are things you can do while shopping around for a life insurance policy to protect yourself and your family.
Determine just how much life insurance you need.
One of the signature moves of life insurance scammers is to start the conversation by talking a client into paying for more insurance than they really need. And it’s easy to be convinced. Preparing for the worst is pretty much the name of the game when it comes to all insurance. But people no longer have to rely solely on the word of an insurance agent when deciding how much to invest in the risk-reward game of insurance.
When calculating insurance, the factors to consider are broken down into “obligations” and “liquid assets.” Simply subtract Here’s a rundown of both.
Obligations: Annual salary (multiplied by the number of years you want to replace that income) + the amount left to pay on your mortgage + estimated funeral costs + funds to help pay for children’s college tuition etc.
Liquid Assets: Savings + existing college funds
Simply subtract your liquid assets from your obligations. You can also plug these items into a simple insurance calculator (near the bottom of the page) to help get your final number.
Choose a reputable company.
Scammers are good at building up a convincing front. How do you know if an insurance company is reputable?
Start by doing your research. If you’re just beginning the search, Consumer Affairs’ Top 10 Life Insurance Companies is as good a place to dip your toe in the water.
It’s a pretty safe bet to go with a big company that’s been around since the 1800s. They know the biz. But there is absolutely nothing wrong with choosing a smaller company that offers policies more aligned with your needs. Just be sure to check their ratings and ask around to ensure they’ll be able to follow through with their commitment to provide funds in the case of your death.
If you’re seriously considering a smaller company, it’s good to dig around for other people’s experiences working with that company. You can tackle this task on two fronts — in-person if it’s a local business and/or online. The National Association of Insurance Commissioners is a great resource for looking up complaints against an insurance company.
Collecting customer’s real-life experiences online and in-person is a great way to decide which life insurance company to choose. It’s also a useful tactic for finding a broker who has proven he or she is the real deal.
Get a second opinion.
If you or a loved one already has life insurance, there are things you can do to ensure you’re not being taken advantage of.
A red flag that you might be involved in an insurance scam is if your broker constantly tries to get you to increase your coverage when you have had no major life changes. In essence, they’re just trying to squeeze more money out of you or your loved one.
If you have even the slightest inkling that this may happening, get a second opinion. Ask the insurance agent of a friend or colleague if they would recommend the same course of action.
Make sure they’re receiving your payments.
The final course of action to take if you suspect something might be awry with your insurance agent is to call the insurance company directly and make sure they are receiving your monthly payments. If they are not, it’s time to report the broker to the authorities and find a new one.
Decide if insurance is really helping.
There might come a time when the life insurance plan that a senior purchased earlier in life begins to feel like a burden. We will see this more and more as the student loan debt-riddled population ages. Excessive student loan debt, which can sometimes be transferred after the student’s death, has students considering life insurance policies a lot these days.
But when a person turns 90 and has settled all their debts, it doesn’t always make sense to keep paying those monthly life insurance premiums. Plenty of seniors opt to cash out their life insurance plans, giving them extra money for vacations, daily expenses, and the financial freedom to enjoy retirement.
Finding the right insurance is all about figuring out what’s appropriate for a senior’s life circumstances. That in itself is difficult enough to determine without snaky brokers trying to take advantage.
The trusting and generous nature of Depression-era seniors is of great value to our culture. I would hate to see my grandmother stop making her yearly $1 donations to charities around the world. But it’s the job of a senior’s family and caretakers to keep an eye out for them in the more unkind aspects of our world. All it takes is some research, a healthy amount of skepticism, and the hope that someone will return the favor when we are elderly.
Author Bio: Brooke Faulkner is a writer and senior care advocate in Portland, Oregon. When not writing, she can usually be found trying to tire out her grandmother’s dog in the local dog park. Follow her on Twitter @faulknercreek