It seems as though almost every issue of the insurance trade press covers new legislative and regulatory initiatives to "protect" seniors from financial fraud and abuse by unscrupulous salespeople.
Prevention of fraud and abuse against anyone merits applause. But it seems suspicious to select any one group as needing greater "protection" than is afforded to the general public. This is particularly true regarding availability of insurance, annuities and other financial products.
The need to "protect" seniors seems to stem from a belief that all seniors suffer from an age-induced inability to comprehend and deal with the technical elements of complex financial products. Such generalization is inappropriate and wrong.
It is a sad fact that many Americans suffer from financial "illiteracy." This is not limited to seniors. It has been reported that the average American cannot calculate a 15% tip on a bill for lunch, let alone understand complex financial relationships contained in something like a variable annuity. The problem seems to stem from inadequacies in the educational system, not just the mendacity of the purveyors of financial products.
To single out seniors for extra protection is insulting, particularly when the entire population is equally inadequately prepared to understand complex financial products.
Everyone wants the easy road to financial security. Seniors are often somewhat more concerned because of their shorter time horizons and a greater awareness of their own mortality. Yet, seniors are also perhaps in greater need of quality financial products as a direct result of these shorter time horizons.
To restrict arbitrarily the ability of seniors to obtain the financial products they may desperately need to achieve their financial goals does not do them a service. Information, not limitation, is the solution.
A number of initiatives appear intended to "protect" seniors from unscrupulous sellers of insurance policies and annuities. These range from outright prohibitions against sales to seniors to disclosures that are more likely to frighten and dissuade seniors from purchasing what may be essential financial products than they are to promote an informed decision.
