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Zero Premium Life Insurance, Really?
By admin | May 31, 2007
Research Insurance just posted an article - Zero Premium Life Insurance, Hot Or Scam?
Of course it sounds great. As an insurance agent, you get to live the dream of writing free life insurance while getting paid to do it! This product is designed for senior’s, it is basically a permanant life insurance policy written for $50,000. The idea is that investors will pay for the premium. In return, they will get $35,000 of the death benefit, and the insured person will get $15,000.
Most of us who have ever written senior products like Medigap, Medicare Advantage, or Senior’s Life have a box full of leads we could call upon. We’d just love to show up, and offer these older people, many on fixed incomes, the security of knowing they will have final expenses covered, and all without spending a cent. If you take a quick glance, it may seem a small thing to ask them to split the death benefit with the investor who has paid the premium, since after all, the insured never had to pay at all!
However, we all learned about insurable interest in our first life insurance class. Usually close family members, domestic partners, or business associates have an interest in an insured’s life. Strangers on the street do not. The insurable interest test exists to protect people from having their lives gambled upon, or from having non-related people having an interest in their quicker deaths.
The second issue is that investors will look for life insurance products that they think are underpriced. After all, in a perfect world for life insurance underwriters, we’d all live to be 110. They would pay a death benefit after we’d paid up our policies and they had plenty of time to profit from the money!
So, I’m sorry to be a spoilsport, but I cannot see how Zero Premium Life Insurance is in the best interest of the insured people OR life insurance companies. It seems to violate the concept of insurable interest. Comments are welcome below!
ANNOUNCEMENT:
In order to make your life sheltered and well protected you should indemnify yourself and your family members as well. There are many cheap term life insurance polices offered by numerous companies. These companies offer complete insurance packages including travel health insurance along with home and auto insurance. These packages are often according to the health insurance law and consist of complete medical insurance like dental insurance etc. Numerous companies offer debt insurance and propose debt repayment under small payments. However there are many cases of fraud insurance companies so beware of them as well.
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May 31st, 2007 at 12:36 am
[...] about a product called zero premium life insurance. An Insurance Agent Site Posted a Warning here: Zero Premium LIfe Insurance Really? On the surface the product sounds great. It ill be marketed to senior citizens as a final expense [...]