For the majority of our lives, the subject of life insurance has traditionally been one that each of us has probably wanted to ignore. It is often regarded as tedious, frustrating, dull, and not altogether essential – at least until you reach that age. On another level, despite its importance and the inherent sensibleness that is evident when an individual is seen to have taken out a policy, it is still very difficult to make the subject of life insurance seem interesting, positive and relevant – without seeming preachy.
Of course, all that is about to change. Drawing influence from a blog post at wnyc.org entitled: Life Insurance…Not So Dull After All, the interview contained therein highlighted the fact that, aside from what it might mean from person to person in regards to when/whether they should be thinking about it, life insurance on an industrial and business level is one of the most important factors in regards to the recession – and consequently one of the most discussable subjects for the press.
In that post, expert Aaron Elstein points out the likelihood of further bailouts for American life insurance (many insurers remain in a strong position) companies due to certain investments in bonds (i.e. mortgages) which have declined in value. In turn, such declining bonds will be sold at a loss and certain insurers will be losing money – and, in simple terms, may well struggle to pay out claimants without government aid. If that doesn’t sound like the makings of a John Grisham novel, further life insurance-orientated news stories seem like the stuff dreamt up by Hollywood scriptwriters.
The Los Angeles Times (and other places) reported on April 8th of the story of two middle aged women who’ve been arrested and accused of life insurance fraud on a grand scale. The women (aged 60 and 66, and thought to have worked with others) are said to have bought life insurance policies in the names of fictitious people, waited until the policies had matured, held fake funerals, and then received the payouts from their own beneficiary bank accounts.
The couple are facing several charges and are said to have carried out two fake insurance claims for individuals called Jim Davis and Lara Urich, leaving agents etc stunned at the lengths some will go to. The Times stated: “the defendants are accused of faking the cremation of a "Laura Urich" and collecting $5,000 in funeral expenses and $50,000 in insurance death benefits through two purported beneficiaries, according to court records.” Aside from being an important thing to consider when each of us reaches that certain time in our life – in 2009, it seems that life insurance could be the most intriguing subject of the time. And a great reflection of life in the 21st Century.
Life Insurance – It Just Got Interesting!
Centenarian Life Insurance: The future of the insurance industry?
As the world population increases, it has become less of a surprise that economically developed countries have begun to experience the trend of an aging population. This has resulted in the increase of life insurance policies that are specially tailored to the needs of older people.
Such policies, usually sold as final expense insurance (but sometimes referred to as preneed or prepaid insurance), have been introduced by some insurers in order to give older members of the public the opportunity to buy insurance as they may not be able to afford a standard life policy. Final expense insurance policies typically offer immediate cover (although, a vesting period isn’t uncommon) which does not expire over a certain time, and the payout is usually used for funeral expenses such as travel and hearse hire.
The benefits of final expense insurance for customers, as well as companies eager to make themselves stand out from the pack, are quite obvious – so what does the future hold for the industry? According to a press release sent out by specialist life insurance company, Life Insure, they have embarked on an unprecedented move – to offer an insurance policy exclusively for those aged 100 or over.
On first reading, the notion seems absurd but possible at the same time. For someone who writes about the insurance industry frequently, I have seen many interesting trends and gimmicks develop in this highly competitive market, and one insurance company offering cover for a small but growing target market does seem like quite a good idea. Suffice to say, I was a little disappointed to find that the policy does not explicitly exist in reality – and was most likely a PR stunt. This conclusion was further enhanced by the comedic tone of the release and the overly senile responses of the centenarians who attended the product launch. (‘Gary Foss was more concerned with taking a nap’!)
That said, the prospect did get me thinking. Whether such policies do or do not yet exist, it doesn’t seem too far fetched to believe that they will do soon enough. The fact that the population is aging is one thing, but as a marketing aid – being the first company to seriously offer centenarian life insurance will no doubt be a very positive step indeed. Not to mention a sign of changing times!