Identity is a serious problem that can affect people of all ages. Even so, seniors are at a greater risk than most. Seniors tend to have accumulated savings and are more likely to have built a decent credit score over the years. They’re also nicer people who are more trusting of strangers calling on the phone. That makes them priority targets to con artists who profit from identity theft.
Identity theft insurance is one of the few possible ways they can strengthen their defenses and protect from losses related to identity theft. The insurance provider covers a portion of the losses when you are a victim of identity theft or financial fraud. More specifically, the policy covers the expenses related to rebuilding your credit score and securing your identity.
As with any expense at this age, you should carefully consider the pros and cons before investing. Should seniors buy identity theft insurance or is this just another monthly expense to take from your nest egg?
Pro: Covers The Unexpected
It’s bad enough to lose money directly from a bank account, but the losses don’t end there when you’re a victim of identity theft. You may take off time from your job if you aren’t retired, you may have to pay court costs, and there will be dozens of fees along the way as you rebuild your credit. These unexpected expenses can quickly add up to more than the initial loss.
A full-coverage identity theft protection plan is going to cover all of these expenses for seniors along the way. This is what makes the insurance policy a worthy investment. But how much coverage is best depends on your budget. You may end up paying for extra coverage without putting it to use.
Pro: More Affordable Than Most Insurance
Insurance providers aren’t known for their cheap services. Most insurance bills are enough to ruin an otherwise pleasant day. Identity theft insurance is surprisingly affordable in this regard. Some policies are as low as $25 a year while the more expensive options are closer to $100 a year. Signing up for an identity theft insurance policy is as easy as talking to homeowner’s insurance providers.
At the end of the day, there’s a lot less risk involved for the insurance provider. This is good enough to warrant lower policy costs. Even so, you have peace of mind knowing you’ll be protected if the worst does occur.
Con: A Lot Of Confusing Policy Differences
Insurance is already a confusing field to navigate. Identity theft insurance policies can be more confusing than most because it’s a new field and involves a lot of technology. Policy specifics can vary wildly from one insurance provider to the next. It’s a lot to ask anybody to keep track of.
You’ll need to take the time to carefully inspect a wide array of options and read the details of each policy. And even after selecting a policy, you’ll need to remember the specifics or you risk losing qualification for reimbursement. Be prepared to spend a lot of time reading with a headache while you find the best identity theft protection policy.
Pro: Helpful Guidance For Seniors
Insurance providers are well aware that they always get the better deal. That’s why they don’t have a problem throwing those extra services. Many insurance providers go out of their way to offer information and guidance during the time following identity theft. This is particularly helpful for seniors who may not have much experience dealing with credit agencies.
Some of the steps following identity theft include notifying banks, reporting fraud to the major credit reporting agencies, and dealing with attorneys. A quality insurance provider is going to provide guidance or services related to these obstacles and potentially many other obstacles. It’s a lot easier than trying to do it all alone.
>>Also Read: Identity Theft Tips for Seniors<<
Con: It Doesn’t Cover Direct Losses
Financial losses related to identity theft are not the ultimate responsibility of the victim. That means it’s not the insurance provider’s responsibility to cover those losses. These insurance providers will cover most or all of the costs associated with overcoming and repairing the damage but they won’t cover any direct losses such as fraudulent charges or theft.
This is going to seem like a major setback if there were significant financial losses. But remember that losses can be recovered through other legal means. The insurance provider will be there to help guide the senior through those legal stages.
Should Seniors Buy Identity Theft Insurance?
Yes. Seniors should buy identity theft insurance. If the annual cost of the insurance doesn’t put a serious dent in your retirement, then it’s a smart investment. Identity theft is a growing problem that will only become worse over the following decades. The low costs make it a low-risk investment while it has the potential to save you quite a lot. It’s a new market and it does have some flaws, but I think it’s an overall good idea.