Life & Health Insurance/life insurance


Hi Michael,
There’s so much on my mind right now I don’t know where to start but, I’ll try to keep this short.

My mother is 73yrs old and lives almost an hour away from me. I try to visit her once a week. She is not a wealthy person and is living social security check to social security check. This last visit she told me she has a plan. She wants to buy a $100,000 life insurance policy for around $150 a month and apparently she cannot be denied and they can’t cancel.
Her plan is, if she lives another 10 years, the policy will cost her around $18,000, but when she dies she can leave us something, $100,000.
There has to be a catch somewhere, because anyone would exchange 18k for 100k all day long. And how does the insurance company make money, if they keep doing this they will go out of business.
I’m also thinking in the back of my mind of the predators who prey on the senior citizens.
There has to be a way for the insurance company to get out and not pay…correct?
She so excited about this and I begged her not to do anything until we get more information.
What’s the catch?

Would you have any insight? Thoughts?
Thank you,

Hi Randy.  There are likely a few things in play here that your mother is likely overlooking.  It would be helpful to know what plan this is that she's talking about.... I'm guessing it is something like the plans offered by AARP or something like that.  Based on what you've described I would suspect the following.

1) the plan is not truly "guaranteed issue."  Likely the plan might not require a medical exam, but it still does have medical questions.  If her health is okay, then she might have no problem qualifying, but it's still very different than "cannot be denied."

2) I would almost guarantee that the plan she's looking at is a term insurance policy, likely one where premiums increase (sharply) every 5 years (age 70,75, etc).  The price increases are usually staggering and at some point (usually age 80 or 85) the coverage terminates altogether.    

So I think she's likely overlooking the future costs of the policy; and the fact that if she outlives the policy she will have spent money on coverage that has in out, something she cannot afford to do.  

Happy to review specifics of you have them, but I don't think she's read the fine print.


Life & Health Insurance

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Michael Feinberg, ChFC


I am the Executive Director of Synergy Financial Services, focusing on life, disability and long term care insurance nationwide. I do not typically handle health-insurance related questions since they are typically local-based but I am always happy to try to answer any questions you may have on any of these topics.


16 years in the insurance business.

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