The senior market can be overwhelming at times. If you deal with a lot of senior clients, it’s imperative that you know the best products to help them at each stage in their life. Younger seniors, older seniors, rich seniors, and low-income seniors all have different needs, and it’s your job to understand them.
But even if you don’t specialize in the senior market, you’re sure to come across at least a few of these clients in your practice. The more prepared you are to help them, the more likely they are to refer you to their friends — and younger family members — and help grow your business.
On the pages that follow, then, you'll find a list of the five main types of seniors. We asked senior market experts across the country what they would do for clients in each category; although there is some crossover among the groups, understanding where your clients fall is the first key to assisting them with all their financial needs.
Our experts are:
- Rick Crosby — Owner, Crosby Insurance Group
- Tony Keena — Partner, Estate and Business Planning Group
- Bill Stapleton — CEO, Health Plan One
So let's get started.
The Young Senior
Definition: A young senior is anyone between the ages of 65 and around 70. They may be just entering retirement, or they may have extended their working years to make up for a lack of savings. They will be Medicare-eligible for the first time, and will begin receiving money from Social Security, pensions, and other retirement sources. As they enter their golden years, some may want to travel or take part in other activities they may not have been able to enjoy during their working years, while others may want to prepare their financial futures for their families.
Product recommendations: According to Crosby, the first thing a young senior should do is review their corporate benefits to see what’s portable, and what’s not. He also suggests reviewing life insurance, long term care insurance, and health insurance policies to make sure clients are adequately covered in every area.
“Depending on their situation, we may want to suggest that they get a Medicare supplement policy,” he said.
Stapleton knows the importance of getting young seniors into the right Medicare plan right away, since they are age-qualifying for the first time. For that reason, he recommends either Medicare Advantage or a Medicare supplement, depending on their geographic location, plus a Part D drug plan if they’re using a supplement.
Stapleton said that Medicare Advantage plans are best for seniors who are willing to stay inside the health plan’s network — they’ll get richer benefits, but will have a limited choice of providers.
“But, if you want more flexibility, or if money is less of a concern, or you travel a lot, you may not want to be concerned about being in a network, so the supplement plans may be a better fit,” he said.
Crosby also emphasized the need to review retirement income. “We do a lot of work with early seniors with annuity planning because that’s the only product that can provide guaranteed income as long as they live,” he said. “And between the age of 65 and 70, we do a lot of work with seniors in premium financing life insurance.”
The ‘Super’ Senior
Definition: A super senior is someone of advanced age — at least 90 years old. Because of their age, they are unlikely to health-qualify for any insurance plans. They may have poor health, so whenever possible, the family should be involved in health decisions. In some cases, the super senior’s family members may also be elderly.
Product recommendations: Unfortunately, the consensus seems to be that there isn’t much you can do with extremely elderly clients. Crosby said this is because the typical issue age for life insurance is around 85, and long term care insurance carriers often won’t write for clients above that age. While his firm has written life insurance for those as old as 86 and 87, that can be a very expensive proposition — and once the individual reaches 90, the producer’s hands are basically tied.
Keena said it’s important to involve the families of super seniors in the process, but beyond that, it’s all about making sure everything is set for end-of-life needs.
“I’d want to take a look at anything they had already … annuities, life insurance, et cetera,” he said. “I’d want to confirm that the beneficiaries on the account match the client’s desires, because by that time, at such an advanced age, a lot of times things have changed; life events have happened. And if they have existing investments in place, I want to make sure we have skimmed the risk out of it. At 90 years old, you don’t need to be taking risks.”
Stapleton noted that Medicare is often the best way to help your super-senior clients. Medicare Advantage or Med supp policies can be reviewed to see if there might be a better fit or if they would be eligible for a new product.
In general, Stapleton recommends Medicare supplements over Medicare Advantage for the extremely elderly.
“In some states, like New York and Connecticut, there’s no medical underwriting on the Med supp plan, so they might be able to get into a better Med supp plan,” he said. “Money can often be a really big factor if they’re in assisted living, so Medicare Advantage could be too expensive.”
The Low-Income Senior
Definition: Although the poverty level for a single person in the United States is set at $10,830, many seniors earning more than that are still considered low-income. For this group, estate planning and investing just isn’t an option — they are just struggling to make ends meet, and most likely don’t have the money to spend on additional expenses. Chances are, they will be relying heavily on government programs to get by.
Product recommendations: As with any client, Stapleton said he would start by reviewing the low-income senior’s financial situation to figure out where they stand. Then, you want to make sure they are signed up for the best possible Medicare (and Medicaid) plan for their situation.
“The other thing is,” Stapleton said, “a lot of states have subsidy programs to help them pay for their drugs, so we’re going to look at their incomes and see if they qualify for that. They’re probably eligible and they don’t even know it.”
Keena agreed that it’s wise to use state and county programs to the client’s benefit, such as assistance with low-income housing or health care. He said he would also evaluate any existing policies.
“With low-income seniors, it’s not about asset protection, it’s about asset accumulation,” Keena said.
If you’re dealing with a home owner who needs additional income now, Keena suggested considering reverse mortgages.
“There’s no sense in eating tuna every day if you’ve paid off your $150,000 house,” he said.
The High-Net-Worth Senior
Definition: A high-net-worth senior has investable assets in excess of $1 million. There are many unique considerations for high-net-worth individuals, as they may be independently wealthy or business owners, or may have inherited their wealth from their family. Often, dealing with affluent seniors means you will need to partner with other financial professionals.
Product recommendations: According to Keena, the biggest concern with high-net-worth clientele is asset protection — even in retirement. For these seniors, he said, it’s not about how much they can earn, but rather making sure their returns are consistent. Municipal bonds and income annuities could fit well in these cases.
Since many high-net-worth seniors may also be business owners, succession planning can also come into play.
“A lot of times, the kids might not even know their parents are high-net-worth,” Keena said. “I have a lot of clients who drive Toyotas and live frugally because that’s how they were raised, but you would never know that they are worth millions.”
Crosby said he works in conjunction with tax attorneys and CPAs when dealing with affluent clients to help ensure that all of the client’s financial bases are covered.
“We do a lot of premium financing, and, of course, charitable giving,” he said. “We’ve also worked with high-net-worth seniors who have had life insurance policies for many years, and we’ve taken them to the life settlement market and created additional income, and sometimes ultimately created new [life insurance] policies.”
The Newly Single Senior
Definition: Unfortunately, as many married couples age, one spouse will often die before the other, leaving the widowed spouse to deal with the family finances. Because women have a longer life span than men, wives will often outlive their husbands by six years or more, and some older women who are used to playing the more traditional female role may be unfamiliar with the state of their family finances, or unprepared to live on their own.
Product recommendations: When dealing with a newly single senior, the key is sensitivity. Depending on how soon they come to you, Keena said, they may still be in mourning. The first thing you need to do is make sure that they have received everything they’re owed — sit down with the client and review paperwork to ensure that they have secured all the benefits to which they’re entitled. Then, you may want to help them develop a spending and asset protection plan.
“In terms of investments, I try to tell them not to make any changes,” Keena said. “A lot of vultures will come in, but I tell [the client] that they’re not in the [right] state mentally to make those decisions.”
Crosby also noted the importance of long term care insurance and, if the client has children, life insurance.
“Long term care insurance is critical for them if they’re insurable and not too old,” he said, “because if the children don’t live near them, they’ll need to have some kind of skilled nursing care nearby, or no one will be there to take care of them in case something happens.”