AARP Life Insurance

AARP Life Insurance

Life Insurance for Seniors – Are their plans too expensive?

( Please note that I do not represent AARP in any capacity. This is simply a personal review and  opinion of their product line.)

Although AARP does offer some competitive rates in their Guaranteed Acceptance plan I would spend the time and review other carriers that offer Permanent Life / burial insurance plans.I am here to assist anyone looking for plans. I deal with 10+ industry-specific Final Expense / Burial insurance carriers.Contact me today for a no hassle no obligation quote. I am here to help! My number is 512-963-5000 or fill out my contact form.


AARP Life Insurance is probably one of the most recognized life insurance companies that offers plans for seniors. In this article, I wanted to show you a rate comparison so you can have a side by side comparison of how AARP Life Insurance plans stack up.

As a quick note, Colonial Penn life insurance is also a very popular brand. Many people compare AARP to Colonial Penn when they are shopping for life insurance rates.  A Colonial Penn life insurance review will be the subject of another article at a later date.

AARP and New York Life Insurance

AARP does not actually issue the life insurance plan. The plans are issued through New York Life.  AARP is the marketing arm of  New York Life’s product. Most people already know this so I won’t go into any details.

Together they offer three different plans:

Term Life Insurance Plan – This is a 5 year term life plan. I don’t really have anything to compare it to, because  getting someone a 5 year Term Life Insurance plan does not seem, at least to me, to make any sense. Every 5 years they must re-apply and the rates will be based on their attained age, i.e. the rates will go up every 5 years. On top of that they will have to answer AARP/NYL’s three questions to make sure they can get approved. More on the three questions later in this article.

Permanent Life – This is the plan that I wanted to discuss in the article. We can beat them, hands down, on these basic Whole Life Insurance Plans. These are simplified issue / no medical exam. Final expense ( Burial Insurance) plans.

Guaranteed Acceptance – AARP actually shines on these plans! Very competitive rates. I compared age brackets and their plans are in line with other companies. However, I believe a lot of people, that are in these plans , that are in good general health and/or could qualify for a higher face amount , are drawn to this plan simply because there are no medical questions asked. For this reason, you should speak to a life insurance broker, such as myself, and review your current health, medications etc and see if you might easily qualify for a higher face amount plan.

Let’s compare their Permanent Life / Whole Life Insurance plans

Burial insurance is nothing more than a small Whole life policy with a few rules that are set up by the various Life Insurance carriers. Here are some very basic components of burial insurance plans:

1. Issue ages usually start at  50+, with a Maximum issue age of 80
2. Plans up to $50K
3. No Medical Exam
4. Immediate Benefit vs Graded or Modified (see next paragraph)
5. Rates will not increase
6. Simplified application answer Yes and No to questions

Graded only or Modified benefit plans are plans that do not pay the full face amount for the first 24-36 months that the policy is in force. Each carrier has its own criteria. These plans are for those that may not qualify for a standard Burial insurance plan, with an immediate benefit, because of Health Impairments. This is where AARP offers, as I also do,  Guaranteed Issue Life insurance plans.

AARP vs Other carriers for Immediate Benefit Burial insurance plans- Application Questions

What are the three questions that AARP / NYL asks when applying for their plan? I have listed the general questions here:

1. In the past 2 years have you had treatment for or been diagnosed by a doctor as having heart trouble, stroke, cancer, lung disease or disorder, diabetes, liver or kidney disease, AIDS, AIDS Related Complex, or immune system disorder?

2. In the past 2 years, for any condition, have you been admitted to or confined in a hospital, sanitarium, nursing home, extended care, or special treatment facility?

3. In the past 3 months, have you consulted a doctor or had treatment or diagnostic tests of any type? (Note: You are not required to report negative AIDS or HIV tests.)

No too bad, right? They are doing a 2 year look back.  However if you an older person, then these questions may bring up some problems. I think question 3 would give most people problems. I would think older people  would visit their doctor every 3-6 months. Although they are not asking you to not to visit a Dr, for at least 3 months, the implication is there. People want to be covered now, so guess what you qualify for,  that’s right, their Guaranteed Acceptance plan!

Other Carriers will ask similar questions and will also want all  No answers on their applications. However, they do not ask obvious “Knock Out” questions such as have you seen a Dr in the last 3 months.

Life Insurance Rate Comparisons

I ran a quote for a Male, Non-Smoker, Hawaii Resident ( My home State!) age 60. Let’s see how the rates stack up:

They are quoting $229.79 (AARP at the time of this article)

I ran a competitive quote and you can clearly see that my carriers can offer much better rates.

United Home Life Quote

My same 60-year-old Male can get the same coverage for $206.06  from United Home Life.  That is a $23 savings, per month or $276 per year or a $1380 savings for a 5-year period! This particular plan will take a Type 2 Diabetes ( non-insulin), Those with High Blood Pressure / Cholesterol and other minor health conditions. Unlike AARP Life Insurance, they will not decline you because you have seen a Dr in the last 3 months.

AARP is most appropriate recognized advocacy on the part of those 50 and over. But AARP in addition has a thriving business licensing financial and medical insurance products. AARP, through a for-profit subsidiary, teams up with companies including New York Life and UnitedHealth Group (UNH), which pay it a royalty for every sale—in some cases up to 3.7%. In 2006, the most recent year which is why figures can be found, such royalties contributed about $400 million to AARP’s $1 billion budget, or almost twice the income from member dues.

A massive chunk of the revenues originated from Medigap health-insurance policies, which cover expenses Medicare does not. That is a location where in fact the association tends to offer bargains. Premiums for AARP-UnitedHealth policies are among the lowest in many states, relating to a BusinessWeek analysis of rates filed most recently with state insurance departments for Plan F, an extensive Medigap policy. One of many 14 such policies available in Connecticut, AARP’s policy is second-cheapest. In New York, AARP’s Plan F is usually the essential affordable. In to the Chicago area, its premiums are less than some two-thirds of competitors.

AARP’s retirement and estate-planning offerings are a lot less attractive. For anybody without serious health issues, its permanent life insurance coverage policies, which pays heirs regardless of as soon as the insured dies, as well as its term life insurance policies, which provide temporary coverage, charge high premiums when stacked up against those of rivals. AARP-branded mutual funds are two times as expensive as offerings from Vanguard. (Both use index funds.) And AARP’s immediate annuity, which converts a lump-sum payment into guaranteed monthly income for lifelong, generates a lesser payment stream than an investor 75 or younger might get elsewhere. “simply because it says AARP doesn’t mean it really is a good deal,” says Mark Maurer, vice-president of Low Load Insurance Services, a Tampa broker that advises fee-only financial planners searching for insurance products on the part of clients.


AARP says there clearly was a good good reason why its items are priced the way they are. Its program is made in part to serve individuals who might otherwise be excluded through the marketplace. Its term life insurance policies, as one example, ask for less health information than most others. Which makes it easier for applicants in relatively poor health to get coverage, but makes for a riskier pool of policyholders, which raises premiums. Says Adam Sohn, an AARP spokesman: “we are generally not very times probably the most affordable, but we feel we offer a higher-quality plan with elements that are not incorporated into lots of competitive plans.”

An analysis by Low Load Insurance Services reveals that seniors in average or a healthy body are able to find a significantly better deal on term life away from AARP so long as they have a medical exam. Go through the term life policy AARP co-brands with New York Life, which pays heirs as much as $50,000 if the policyholder dies before age 80.

To have $50,000 in coverage, a 65-year-old man from Illinois would pay a monthly premium of $144. With an insurance policy from Genworth Financial or Jackson National, he would pay just over $70 1 month. All prices assume the person gets “standard” rates, centered on a health profile that may include problems like raised chlesterol and high blood pressure. (Insurers have proprietary definitions of what exactly is considered “standard,” “preferred,” “preferred plus,” or below the standard grade.)

Even those not able to be eligible for standard rates can do better with an unusual carrier. A 65-year-old with health issues that put him in to the category below standard might get $50,000 of coverage through age 80 for approximately $105 a month with Jackson National. Yet, another notch lower in which he would pay $138 every month. Plus, all the facts reveals that AARP’s $144-a-month premium will rise, first within the man’s 70th birthday and again on his 75th. An added insurers’ rates aren’t susceptible to increases when it comes to policy’s 15-year term. For a somewhat healthy 65-year-old, AARP’s permanent life insurance coverage is also pricier compared to those of competitors. Its annuity payout, meanwhile, is leaner.

Think about a far more straightforward product such as mutual funds? AARP lets investors pony up the very least investment of just $100 due to the life cycle portfolios, which combine stocks, bonds, and cash, using index funds. Similar Vanguard portfolios require a $3,000 initial investment and waive a $20 small-account fee for folks who register online. AARP also offers free phone consultations with salaried reps taught to provide solid advice on topics including exactly how much to save lots of and which AARP funds to choose.

Indexing is a strategy AARP says it chose in part to help keep fees down. But despite having a reduced annual expense ratio of 0.5%, the funds still are not quite as low-cost as Vanguard’s LifeStrategy Funds, at 0.25% to 0.27% per year. “You’re not receiving any special deal,” says Christopher Davis, a Morningstar (MORN) analyst. “You’re paying twice as much as you [would] elsewhere.”

When you really need good insurance policy at affordable rates and substantial benefits, the AARP life insurance policies plan may appear like the right answer.

Unfortunately, the senior advocacy group might do an excellent job of lobbying for senior rights, they arrive up a bit short on the term life prices.

Produced by New York Life insurance carrier, the AARP term life insurance plan tries to hold a number of advantages your beneficiary can used to simply help financially compensate should you pass unexpectedly. But yet again the pricing comes up short.

New York Life is an incredibly reputable and highly regarded company, however their prices are often a lot higher than the competition. I realize of just one instance where a client was paying 50% more on a fundamental term policy than what he could ‘ve got with certainly one of our top carriers.

The prime grounds for having the AARP life insurance coverage plan would be to help pay funeral expenses, accumulated debt along with since the everyday cost of living until they could get back in the feet.

There are numerous choices to consider when deciding the ideal insurance coverage to pick from.

You ought to do a little research and discover the right one that fits your requirements along with compliments just about any policies, trusts or other benefits you are leaving behind to your family.

Here’s a fast rundown when you look at the style of policies that AARP offers:

AARP Level Benefit Term

This policy can last for a collection time period and will be offering up to $50,000 in protection if you should be lost. This type of life insurance is good just before are 80 yrs . old so when an advantage offers low initial premiums that do build over time, in order to gradually adapt to carrying this form of term life insurance. There’s absolutely no physical exam and you will find only three health questions to answer.

Extra Protection Term

For many looking at a bit more in terms of benefits, the extra Protection plan is similar to the Level Benefit except it may provide up to $100,000 in protection then when with the three health questions qualification may even count on the data this is certainly collected in connection with health.

Permanent AARP Insurance

This kind of coverage can last for the entire lifetime and will also be offering $50,000 in protection with affordable premiums which do not rise although you age. Just like the particular level benefit term, there’s absolutely no physical example and acceptance is based on answering three simple health questions.


Similar to the permanent insurance coverage, this offer protection which could last an eternity with as much as $15,000 in protection in terms of first two years alone. Also, there’s absolutely no physical exam as well as premiums usually do not go up over time. While there are not any health questions, there is a supplementary mortality risk charge this is certainly included.

Selecting the most appropriate model of AARP life insurance coverage is quite easy, simply type in the total amount of coverage you need and choose one of several four products to have all the details and a rate quote. When you have decided on which someone to select, you can apply online in almost all state or order by mail.

As part of AARP you could begin providing insurance coverage to your kids or grandchildren through the Young Start program. In that way, they are able to keep coverage opting for their entire lives without any medical exams and only having to answer a few medical questions.

Is AARP the most affordable Approach To Take?

Despite having the AARP discount, doesn’t mean that they’re the lowest priced term life insurance option available on the market. Many factors can determine this including pre-existing conditions of course you are in need of a premier risk term life quote.

We have many carriers that concentrate on people over 60 years-old seeking affordable insurance plan. With more than 60+ of the greatest term life insurance companies at our disposal, an excellent greater part of them will soon be appear in better priced than what you could get with AARP. In fact, we’ve replaced several policies from AARP clients that were floored on what significantly less they can obtain insurance coverage.

Even better is that it doesn’t cost to look around and compare your AARP insurance quote with an unbiased agent. Talk to certainly one of our professionals at this time to see if you can put additional money back in your pocket.

AARP life insurance policies policies is an excellent method to allow for the financial future of family members. Term life insurance could also be used to cover funeral expenses. The average indivdual that have chose to purchase insurance coverage, simply does need to select the amount of coverage they would like. The average person then makes payments, generally from month to month. Once the individual becomes deceased, the beneficiary collects the income from the AARP term life or AARP term life insurance policy.

The ones that are ill or older may pay an increased premium for AARP term life insurance.In fact, many risk factors are taken into account when it comes to determination of premium payments. For example, smokers generally payer an increased premium, as well as individuals with a diagnosed illness that could shorten their expected life.

AARP long term care insurance is another wonderful benefit offered through AARP. This insurance covers most of the expenses linked to medical treatments that might require long haul care. The insurance coverage coverage may cover doctors bills, prescriptions and any facility charges. The premium as a result of this kind of insurance will alter relating to several factors. As an example, individuals with already been clinically determined to have a condition that may need long term care, may likely pay a higher premium.

It is important to keep in mind that more often than not of “Level Benefit” insurance with other programs, the rates usually do not increase for your policy term length. With AARP, however, the rates go up every 5 years, in addition to it’s likely that they may not be guaranteed. These policies also only appear in up to $50,000 in terms of coverage goes, although almost every other companies start at $100,000 and go far beyond that. And although it may be considered a pro that no physical exam is essential (applicants have only to resolve three questions regarding their own health), the lack of thoroughness means that even although you are becoming healthy, you merely will not get competitive, low rates as a result of it. Coverage also only lasts up to age 80, so those who find themselves older are away from luck.

The AARP has two different types of term life insurance that it offers— Level Benefit term life insurance and further Protection term life. With both, rates go up every couple of years, and also they don’t offer elderly people very discounted prices in the end.

As you can plainly see AARP is actually pushing a product for NY term life insurance company this is certainly quite costly. There are numerous better alternative accessible to you where you could get a reasonable policy with an expert company. A good thing to accomplish is compare quotes online because of the companies simultaneously through an unbiased agency. Luckily our company is the fact that agency that will help you run both term life insurance and permanent term life insurance quotes minus the obligation. Whether you are searching for a new policy or attempting to replace a preexisting a person is never late to save lots of cash. Thank you for reading and feel free to drop a comment below!

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