Review of the “first month for just one penny” life insurance plan

By now everyone on the planet has received an email or text from Globe Life offering what appears to be a generous amount of insurance that requires just a penny for the first month. The problem with this insurance isn’t just that the premiums go way up from there in the second month, its that this is not a permanent life insurance plan. Its what’s called in the industry- an increasing premium term policy.

Not only will Globe Life cancel your policy entirely when you turn 84, it will raise your rates every 5 years up to absurd and unaffordable levels. People buy this policy not because they know what they are buying. Instead they buy it because at no point during the application process are they told how much more they will pay for the policy when the price increases every 5 years. Nowhere prior to electronically signing the application does an applicant see those numbers nor is it disclosed that the policy terminates at 84, and has no cash value.

What confuses people considering the Globe policy the most is the way they describe the coverage in their marketing. They mix the policy advantages of their adult policy with the policy advantages of their coverage for children. They appear on the same page of their marketing and it looks to any reasonable reader like the advantages of coverage for children are the same ones for adults. The policies are described as permanent with a fixed rate that can never rise. But look closely and read through it 3-4 times and you will see that these points only apply to a policy for a child. If they were an honest company they would have included in the adult coverage section that these policies by contrast were term policies that did increase in price. Why? Because that would be the truth.