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Choices Are Expanding In Senior Market Insurance Products

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Choices Are Expanding In Senior Market Insurance Products

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As Americas aging population expands to unprecedented levels, leading life insurance companies are expanding their product portfolios to provide protection that meets senior customer needs.

As a result, Americas mature consumers–aged 55 and up–now have several new options from which to choose. These are products that, even as recently as 10 years ago, were not as plentiful as they are today. (Even the options that did exist for seniors 10 years ago did not have as much variety or public awareness as do todays versions.)

Take term life insurance, for example. Long a popular product for younger buyers, this coverage is now being enhanced to be suitable for purchase at older ages, too. For instance, many of these products offer longer guaranteed insurance periods, lower costs at all ages, and higher issue ages.

For older buyers who have a short-term need, such products can be an economical alternative to whole life policies.

The same is true for flexible universal life policies. Some of these ULs are seeing innovations aimed at meeting needs of the growing senior population.

For example, many ULs offer higher issue ages than previously, up to ages 85 or 90. In addition, they frequently offer lower rates, again at all ages. And, due to todays more conservative interest rate environment, todays ULs offer greater crediting interest rate stability than those of a decade ago–a definite plus for any target market, but especially for seniors.

In fact, many ULs have become much more like whole life policies.

Some senior market life policies even combine the features of term insurance and UL insurance. They do this by offering pricing that is like term insurance pricing in the early policy years but then allow conversion into guaranteed lifetime UL coverage up to age 100–with no new underwriting and no new contract charges.

Another key product for the senior market is long term care insurance. Todays LTC contracts are much broader than the nursing home contracts of many years ago and they are also greatly enhanced over those from a decade ago.

Now, not only do they provide coverage while the insured is confined to a nursing home. Many also offer home health care benefits; comprehensive facility, home care, and day care benefits; different caregiver certification clauses; rate guarantees for different periods; and many other options too numerous to mention here.

Spousal discounts are providing a special service to older clients, since they encourage purchase of LTC insurance on both spouses. This meets senior market needs by helping assure that women have coverage as well as men. Thats an important development, since women tend to live longer than men and so tend to be in greatest need of coverage.

Furthermore, the market has expanded to offer LTC insurance riders with some life insurance policies. And some annuities also offer LTC features.

Yet another product line that works well for seniors–fixed annuities–has long been sold to all age groups. But in the past year-and-a-half, FAs have become especially popular in the senior market–particularly FAs offering rate guarantees of five or more years. The appeal? They offer higher interest rates than do bank certificates of deposit (from which seniors are retreating due to their very low interest rates), and the growth is tax deferred.

The industry is also bringing out modern forms of another annuity standby, the immediate annuity, which guarantees regular income payouts for a fixed period or even for life.

When offering such products in the senior market, producers should keep several points in mind:

Remember that quickness is key. Individuals of advanced age need the assurance that they will receive a quick response from the insurance company and its agent.

Select products that offer guarantees. Buyers in the senior market are more eager than younger people to purchase policies offering strong guarantees. Be as thorough in explaining the guarantees as you are in explaining the coverages.

Represent insurers that focus on truly understanding senior consumers. Remember, not all insurers pursue this market.

Conduct your due diligence on products and the competition before visiting with customers. This is especially important in the LTC insurance market, where seniors often research products and options on their own.

Educate your customers. If you identify a need for LTC insurance, for example, help your clients identify whom they have to depend upon for care, and evaluate what dependence is going to mean. Also help them understand not only the product but also how health and family history may affect policy choices, underwriting, and rates.

Today, nearly 11,000 baby boomers turn age 50 every day. The opportunities to sell innovative new senior insurance products in this expanding senior market are virtually limitless.

is vice president-life brokerage of CNA Life and LTC in Nashville, Tenn. He can be e-mailed at [email protected]


Reproduced from National Underwriter Life & Health/Financial Services Edition, April 29, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.