Are you looking to quickly find the advantages and disadvantages of AICPA group life insurance plans? You’ve come to the right place. Today, we’re going to cover the AICPA life insurance plans pros and cons. We’ll be able to see if AICPA can offer you the best deal on life insurance.
AICPA Life Insurance Pros and Cons
There are many CPAs who are members of the AICPA organization. We wanted to dive into the life insurance policies that AICPA offers its members so you can make an informed decision on your life insurance needs. Since our overall review of AICPA’s life insurance options is not glowing- we still believe they’re an excellent organization due to their advocacy and the wonderful education that they provide their members.
When reviewing our pros and cons below, your first reaction may be that we wouldn’t endorse AICPA or any of their life insurance plans. For the majority of individuals, we typically will recommend the top life insurance companies– but there are special cases to be made for AICPA that you’ll be able to read below.
AICPA Life Insurance Cons
Let’s cut to the chase and go over why AICPA isn’t a good choice for your life insurance needs. Remember, most individuals will not see a benefit from buying their life insurance from AICPA.
AICPA isn’t a Life Insurance Company
I typically like to buy life insurance from the best life insurance companies available. Doesn’t it make sense to buy a policy from a company that actually specializes in life insurance?
AICPA doesn’t offer their own life insurance. They actually work with other companies to offer coverage. You’ll save a huge headache, time and money if you simply work with an experienced independent life insurance agent who knows the pros and cons of each company. This brings me to….
Increased Premiums for Level Premium Term
For most shoppers, this is the most important factor. Most people are going to buy the least expensive life insurance policy as long as it provides the same exact coverage. In other words when shopping an apples to apples comparison of term life insurance– the cheapest policy usually wins. AICPA will usually be more expensive if you shop around. Again, find an independent life insurance agent to shop for you and do all the heavy lifting.
Insufficient Term Life Options
With AICPA, you’re lacking options with your term life insurance coverage. As a shopper, you want to have as many options as possible to choose from. With AICPA, you only get:
Life insurance underwriting is the most confusing aspect for most life insurance shoppers. Your health class rating can often change as the years pass. A life insurance application is required at various ages and a medical exam is needed in order to qualify. Your eligibility for certain coverage amounts is also based on your association membership status.
This is way too complicated for most shoppers!
AICPA lacks guarantees that other life insurance companies provide. Your premiums for the Level Premium Term (LPT) and the Increasing Term CPA Life can increase and isn’t guaranteed. You should also know that the Trust Refund may change each year. Even though the refund was high in the past, it’s possible that it could decrease at any time.
Inferior Conversion Options
AICPA provides an inferior conversion option if you leave their group plan. If you were to end your AICPA membership- you would end up losing your annual refund. When this happens, you could cause a spike in your net premium. You can look here for the percentages of the AICPA CPA Term Cash Refund
It could increase by approximately 50%!
AICPA Life Insurance Pros
Ok- it’s not all doom and gloom. Let’s now look at the positives of AICPA.
All of the AICPA life insurance plans are group plans and are underwritten by Prudential, a financially strong company.
Life Insurance Rider
AICPA offers a child life insurance rider. You can use life insurance riders as a way to customize your policy. With a child rider, you can get $10,000 in coverage for your children at a very low price of $6.00 per year.
No-Medical Exam Option
AICPA offers a no exam simplified issue policy with their CPA Life Increasing Term. This is a good option for shoppers who can’t get a fully underwritten policy because of a preexisting health condition. However, there are many other companies who offer No Exam life insurance (and probably at a cheaper rate).
AICPA has a quick application and can issue a policy quickly. Again, other companies offer this “speedy life insurance” option too. With AICPA, you can apply for their LPT policy and choose their Standard health rate class. This premium will be more expensive when compared to the Preferred and Select rates, but you can get your policy issues more quickly. There is no medical exam required with the Standard Rates option. This is also the case for their CPA Life Increasing Term.
AICPA Life Insurance plans Pros and Cons – Bottom line
We are big supporters of AICPA as they provide their members life insurance coverage. They chose a great company in Prudential for their group life insurance plans.
Nevertheless, you should be able to get a better rate with another life insurance company with financial rating just as strong as Prudential. AICPA offers competitive rates for their 10 and 20 year term, but you can probably do better.
The strongest competition that AICPA provides is with their no exam simplified issue plan. Their CPA Life Increasing Term plan is a good option for those who will have a hard time qualifying for coverage due to health reasons.
Just remember the the AICPA CPA Term Plan increases your premium at each 5 year age band. This is significant when you get older as the premiums raise quickly.
If your health is ok or average, you should have an agent compare rates for you. We have found that there are quite a few carriers, like Protective and Banner Life that have shown lower rates consistently across all health class ratings.
There is significant risk with the AICPA life insurance policies. Even if their rates were identical to other company’s, AICPA’s rates are not guaranteed. You are running the risk that your rate may go up at any time. The other major factor to think about: termination. If you get rid of your AICPA membership, you will lose refund check. Losing your refund check is approximately 50% of your premium.
What do I do now?
The best way to save money and get a life insurance policy that meets your needs is to work with an independent agent. Independent life insurance agents work wonders for shoppers.
The best strategy is to getting the best life insurance deal by shopping from multiple companies. Your agent can help you narrow down your health class rating based on your specific situation.
Our advice is always to get multiple rates to compare, factor in AICPA’s membership fees, and see who offers the best rate. Only then should you make your final decision. If you apply and get an unfavorable offer, your independent agent can still shop your case with other carriers. This guarantees you get the best offer.