Turn on the TV during the day, and you will inevitably see the commercial. A friendly spokesperson promises life insurance coverage for “just $9.95 a month.” They say the price will never go up and your acceptance is guaranteed.
It sounds like an incredible bargain. But for many seniors, it can be a costly misunderstanding.
The question you must ask is: “How much coverage does that $9.95 actually buy?”
As your trusted advocate, we are here to decode the fine print of these “unit-based” policies. We will show you the math behind the marketing and help you decide if this teaser rate is a smart buy or a financial trap.
Key Takeaways
- The “Unit” Trap: The $9.95 price buys one “unit” of coverage. For a senior, one unit might only equal $400 to $800 in death benefit—not enough for a funeral.
- Age Reduces Value: With these plans, the older you are, the less coverage your $9.95 buys.
- The Waiting Period: These are almost always “Guaranteed Acceptance” plans, meaning they come with a mandatory 2-year waiting period.
- The Better Option: A standard “Level Benefit” policy (where you pick the coverage amount, e.g., $10,000) is often clearer and a better long-term value.
The 3 Marketing Tricks TV Ads Use
To understand these policies, you have to understand how they are sold. They use three specific tactics to make the deal look better than it is.
- The “Price Lock” Hook: They emphasize that your rate ($9.95) will never go up. While true, they don’t mention that the coverage amount is locked at a very low level.
- The “Guaranteed Acceptance” Pitch: They sell the idea that you need this plan because you can’t get coverage elsewhere. In reality, most seniors with common conditions (like high blood pressure or type 2 diabetes) qualify for cheaper, immediate coverage through Simplified Issue policies.
- The “Unit” Confusion: They sell “units” instead of “dollars.” This makes it hard to compare apples to apples with other insurance companies that quote you a straight $10,000 benefit.
How the "$9.95 Plan" Actually Works
Most life insurance works by letting you pick a Coverage Amount (e.g., “$10,000”), and the company tells you the price.
The “$9.95 Plan” works backward. You pick the Price, and the company tells you the coverage. This is called the “Unit System.”
- The Price is Fixed: You pay $9.95 per unit.
- The Coverage Fluctuates: The amount of death benefit you get for that unit depends entirely on your age and gender.
The Math: What Does $9.95 Buy You?
Let’s look at a realistic example of how much coverage a single unit buys for a male senior. (Note: These are estimates based on typical market rates for unit plans).
|
Your Age
|
What $9.95/mo Buys You (Est. Death Benefit)
|
Is it Enough for a Funeral?
|
|---|---|---|
|
Age 50
|
$1,600
|
No(Avg funeral is $10k+)
|
|
Age 60
|
$1,100
|
No
|
|
Age 70
|
$700
|
No
|
|
Age 80
|
$400
|
No
|
The Verdict: If you are 70 years old, paying $9.95 a month might only get you $700 in coverage. To get a realistic $10,000 funeral benefit (see our Funeral Cost Guide), you would need to buy 14 units, which would cost you $140 per month.
The "Breakeven" Danger: Paying More Than It's Worth
The commercials say, “Your rate will never increase.” This is true. But what they don’t emphasize is the cost-to-benefit ratio.
If you buy 1 unit at age 65, you are paying nearly $120 a year for a policy that might only pay out $900.
- Year 1: You paid $120.
- Year 5: You paid $600.
- Year 8: You paid $960. (You have now paid more in premiums than the policy will pay out).
If you live a long, healthy life, you will eventually pay far more into the policy than your family will ever receive.
The Better Alternative: Standard Final Expense Insurance
Instead of buying “units,” most seniors are better off buying a specific Face Amount.
- You Pick the Benefit: You tell the insurer, “I need $10,000 to cover my funeral.”
- They Give You a Rate: They calculate a fixed monthly price for that $10,000.
- Why It Wins: You know exactly what your family will receive. There is no guessing math. Plus, if you are healthy, you can qualify for a “Simplified Issue” plan (Day 1 Coverage) that is often much cheaper per dollar of coverage than the TV plans.
Decision Checklist: Should I Buy the $9.95 Plan?
We are honest brokers, so we will admit there are two specific situations where these plans make sense. Use this checklist to see if you fit the profile.
- [ ] 1. Do you need a very small policy?
- If you only need $1,000 – $2,000 to cover a small debt or leave a gift to a grandchild, buying 1 or 2 units is a fast, easy way to do it. Standard policies often have a minimum of $5,000.
- [ ] 2. Have you been declined by everyone else?
- If you have very serious health issues (like terminal illness, oxygen use, or recent cancer) and cannot qualify for any other insurance, this plan is a valid “Guaranteed Acceptance” last resort.
- [ ] 1. Do you need a very small policy?
If you did NOT check these boxes, you are likely better off with a standard Final Expense policy.
Wise Tip: When IS the $9.95 Plan a Good Idea?
We are honest brokers, so we will admit there is one specific situation where these plans make sense.
- If you only need a tiny amount: If your funeral is already paid for and you just want a small policy (e.g., $1,000) to cover a specific debt or leave a small gift to a grandchild, buying one or two “units” is an easy, hassle-free way to get that small coverage without a medical exam.
Frequently Asked Questions (FAQ)
Yes. Almost all of these TV plans are “Guaranteed Acceptance” (no health questions). This means they come with a 2-year waiting period. If you pass away from natural causes in the first two years, your family only gets your premiums back, not the full death benefit.
Generally, no. As long as you are within the age limits (usually 50-85), you cannot be turned down for health reasons. This makes them accessible, but expensive.
No, several companies use the “unit” model, though Colonial Penn is the most famous advertiser. Always read the fine print or check the NAIC consumer resources to understand if you are buying a “Unit” or a “Fixed Death Benefit.”
Most life insurance policies have a “Free Look Period” (usually 10-30 days) mandated by state law where you can cancel for a full refund. If it has been longer than that, you can cancel at any time, but you won’t get your premiums back.
For a 65-year-old male in average health, a standard $10,000 policy (with Day 1 coverage) might cost around $50-$60 a month. It is more than $9.95, but it pays out 10x more money and covers you immediately.
Compare Final Expense Prices (See real quotes for $10,000 or $15,000 in coverage.)
