Many people ask us about AARP life insurance. They have one of the most popular organizations for life insurance for seniors, but that doesn’t mean that it’s automatically going to be the best plan possible.
Before you purchase a life insurance plan through AARP (or if you already have one), it’s important that you look at the advantages and disadvantages of AARP and the other options available.
This AARP life insurance review will show you why AARP’s life insurance options aren’t usually a good choice if you’re looking for the best life insurance rates.
- AARP Life Insurance is Actually from New York Life
- History of AARP Life Insurance
- AARP Term Life Insurance Review
- AARP Guaranteed Acceptance Life Insurance Review
- AARP Permanent Life Insurance Review
- Compare AARP Life Insurance to Competitors
With such a big name and a big presence in the media, you would think that AARP’s life insurance products would be competitive. Unfortunately, they’re not.
AARP is portrayed in the media as an advocacy group for seniors. They may lobby for senior rights, but unfortunately, they’re using their “protector of senior rights” reputation to add legitimacy to their life insurance offerings with New York Life.
AARP Life Insurance is Actually from New York Life
What most consumers don’t know about their life insurance offerings is that New York Life pays AARP to be their exclusive life insurance provider and unfortunately they are far from the best product for seniors.
People have the notion that any product offered by AARP has passed some type of integrity or value test. This is simply not the case.
Before we discuss AARP’s life insurance offerings, it’s important for you to understand where AARP came from.
History of AARP Life Insurance
According to AARP’s Wikipedia page, AARP was formed by Leonard Davis (a retired principal who became an insurance agent) who promoted AARP’s image as a non-profit advocate to retirees in order to sell insurance policies to seniors.
AARP earns more income from selling insurance to members than it does from membership dues.
Currently, AARP takes bids from insurance companies on who they will endorse. Colonial Penn was the first company to get the endorsement. However, when Andy Rooney exposed that AARP was not much more than a front for an insurance company in 1978 on “60 Minutes”, that relationship was terminated. Then, Prudential Life Insurance took over.
Currently, New York Life has the AARP contract through 2011 and they’re still the current life insurance provider.
As you can tell, there’s no value test or protection for seniors on the life insurance products AARP recommends. Whoever pays the most, gets the endorsement.
It’s unfortunate because seniors believe AARP is a group that looks out for their interests. Seniors are led to believe that buying an AARP product is the moral equivalent of buying insurance down at the local, non-profit senior citizen center.
AARP Term Life Insurance Review
First of all, we encourage you to get a quote from AARP, then compare that quote to the quotes listed on our instant life insurance quotes page. You can compare life insurance rates without giving any personal information. We’ll typically beat AARP term life insurance rates by a huge margin.
With that out of the way, AARP has 1 term life insurance product.
AARP Level Benefit Term Life Insurance
Pros: No medical exam and acceptance based on health questions.
Cons: Expensive, maximum coverage of $100,000, and your premiums will increase.
Your Premiums Increase Every 5 Years
What’s misleading about how AARP markets this life insurance product is they call it “level benefit” term life insurance. This is deceiving because it leads seniors (and myself) to think their monthly premiums remain level, when in fact it’s your death benefit that remains level and not your premium payments.
With this product, your monthly premium payments will go up every 5 years. So don’t get fooled by their marketing of this product.
This Product is More Expensive Than the Competition
AARP Level Benefit Term Life Insurance quotes will always be more expensive. You can find AARP’s Level Benefit Term Life insurance rates on their website.
Now, run a quote for a real level premium term life policy. Make sure you choose the term length that gets you to age 80. AARP Term Life Insurance expires at age 80, so I want to make sure you’re comparing similar policies. If you want to bypass the medical exam, look at rates from Transamerica and Assurity.
You’ll find that your premium payments will be less expensive and guaranteed not to go up.
Limited Coverage Amount of $100,000
With AARP’s term life insurance, you can only get up to $100,000 of coverage.
With other top term life insurance companies for seniors, you can usually get $250,000 in coverage or more.
Again, compare the rates and policies from AARP to other term life companies using our quote form. You’ll find much better rates with other carriers.
AARP Guaranteed Acceptance Life Insurance Review
Pros: No medical exam or health questions.
Cons: Higher rates than other guaranteed acceptance policies.
The AARP Guaranteed Acceptance Life Insurance policy is a whole life insurance policy that doesn’t ask any health questions.
In order for them to do this, they use a “graded death benefit” product which limits the death benefit within the first two years.
Again, there are other guaranteed acceptance life insurance products on the market that will be cheaper than AARP Guaranteed Acceptance Life Insurance.
For example, Mutual of Omaha, and AAA have considerably lower premiums. Unfortunately, we can’t offer you these policies because they’re not available to independent agencies like ourselves. You have to buy them directly from the carrier.
We provide their contact information on this guaranteed acceptance life insurance article. Make sure you give them a call before moving forward with AARP.
AARP Permanent Life Insurance Review
Pros: No medical exam, only a few health questions, no waiting period.
Cons: Higher rates than other companies, only $50,000 in coverage.
If you are in good health, they also offer a permanent life insurance policy that does not require a medical exam. This is a whole life policy, meaning it will not expire.
This is a better option than guaranteed acceptance life insurance if you can qualify because you will get lower rates and can get more coverage. However, again, if you are looking for $50,000 in permanent life insurance coverage, you will be able to find better policies elsewhere. You can also find larger coverage amounts.
Compare AARP Life Insurance to Competitors Before You Buy
It’s important for anyone purchasing life insurance to understand that life insurance companies look at each individual risk differently, yet surprisingly your illness could be viewed better with some carriers. The goal is to find that ONE company that fits your needs best.
It’s always in your best interest to compare life insurance rates and not rely on an organization that only offers one option.
Although it may seem like AARP would be giving its members a “deal” on life insurance, it couldn’t be further from the truth as we’ve proved above.
We work with over 60 “A” rated companies and most of them can beat AARP/New York Life’s rates every time, with level payments and last indefinitely.
Unlike traditional insurance agents, our advisors are able and willing to work with many companies which broaden our portfolio of plans we can offer you. This benefits our clients greatly since we can tailor a policy to reach your goal.
We replace AARP policies all the time, even if you’ve already purchased. Compare what we can offer you to what AARP life insurance can. Fill out our quote tool & call us to get dozens of personalized quotes directly to you!
Alternative Life Insurance Companies to AARP
We’ve reviewed dozens of other life insurance companies on this site. See a few others below: