Retirees 50 years of age and older will benefit from this AARP life insurance review. Considered one of the largest advocacy groups in America, the organization offers coverage specifically meant for seniors.
AARP Life Insurance Review
While AARP offers a variety of benefits to its members their life insurance benefits are less-than-desirable for seniors for several reasons outlined in this article. But first I’ll give you a brief overview of the history of AARP.
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AARP has 33 million members and was started as a quest to find health insurance for retired teachers in the late 1940s After opening a retirement home for teachers, Dr. Ethyl Percy Andrus needed insurance for her residents. Shortly after establishing the National Retired Teachers Association (NRTA), Dr. Andrus procured the services of an East coast advocate named Leonard Davis.
In 1958, Dr. Andrus and Mr. Davis made the landmark decision to provide retirees throughout the nation with similar insurance coverage. As of June 2013, Funding Universe declared AARP the second most popular group affiliation in America, taking a back seat only to the Catholic Church.
AARP Life Insurance
Insurance coverage is one of the biggest benefits provided to AARP members. The benefits of AARP is that you can get a life insurance policy without a medical exam.
There are just a few short questions you need to answer to qualify for a $50,000 policy, and a few more requirements to qualify for $100,000 worth of coverage.
Life Insurance Options with AARP
With AARP, you have access to a few options. They offer both term life insurance as well as permanent life insurance options.
AARP’s permanent coverage has a simplified underwriting process. With simplified issue underwriting, you do not need to participate in a medical exam like fully underwritten policies require. You must be an AARP member to apply and get their policies which costs $16 per year.
There are several types of life insurance coverage currently available to AARP members via New York Life:
- Term Life Insurance. With AARP, you can purchase a term life insurance policy if you are a member and are between the ages of 50 and 74. Your spouse is able to apply and can be between the ages of 45 and 74. This coverage may last up until the insured’s 80th birthdate. The AARP term life policy, offers up to $100,000 term life insurance coverage for a pre-determined period. Premiums increase every 5 years with this policy. Their term policy has a conversion option available. It can be converted to one of AARP’s permanent policies before the age of 80. The new permanent policy will have a rate that is based on your age. This is a no medical exam life insurance policy. However, you are required to answer a few health questions and provide certain health information to be accepted.
- Whole Life Insurance (Permanent policies) provide up to $50,000 worth of life insurance coverage that lasts a lifetime. Premiums remain at a fixed rate and will stop at the age of 95. You need to be an AARP member between the ages of 50 and 80. Your spouse can be between the ages of 45 – 80. Qualifying is based on answering a few health questions.
- Guaranteed Issue Whole Life. If you are an AARP member between the age of 50 – 80, you may purchase a whole life insurance policy that is guaranteed. This means you do not need to answer any health or qualifying questions to be accepted. This is a Guaranteed Issue policy with a “Graded Benefit”. A graded benefit simply means that the entire benefit won’t be paid out during a specific timeframe once the policy is issued. The AARP GI Whole Life policy pays out 125% of the premiums paid if the insured were to pass away from natural causes in the 1st 24 months of the life insurance policy. If the insured were to pass away from an accidental death, the full benefit would be paid. This policy has a maximum $25,000 life insurance benefit.
Read more about: AARP Permanent Life Insurance
Life insurance coverage through the company is easy and almost hassle-free, but members need to consider a few things.
In a CBS News Article, the author questioned whether AARP was a good deal for seniors, considering rates increase every five years To save money, senior applicants should compare term rates from several companies and purchase a level term policy.
Have a high risk condition? Click on our Preexisting Conditions page to learn how your health can affect your rates and the company you should choose.
By definition, level terms offer policyholders face value protection for a set period. As opposed to AARP most insurance companies guarantee that premiums never increase during the term period. Obtaining reasonable term coverage provides end-of-life protection while allowing seniors to keep more cash in their pockets.
AARP Company Details
Is AARP a life insurance company? This is one of the most frequent questions we get about AARP. The answer is No. Actually, the AARP Life Insurance Program provides a selection of life insurance policies issued by New York Life Insurance Co. for their group’s members.
Name(s): AARP Life Insurance Program, New York Life Insurance Co
The AARP Life Insurance Program
New York Life Insurance Company
5505 W. Cypress Street
Tampa, FL 33607
New York Life Insurance Ratings: A.M. Best (A++) Fitch (AAA) Moody’s (Aaa) Standard & Poor’s (AA+)
Comparing Life Insurance Rates
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