Nothing is more satisfying than knowing that money left behind will take care of your family members in the event of your death. Life insurance policies are the types of policies that no one wants to talk about, but they know they need to protect their families best financially.
If you are looking for more information on AARP life insurance, you came to the right article! AARP is a powerhouse name in the life insurance industry, and they have the credentials and customer service reviews to back their reputation. This brief article will cover AARP life insurance products and who you can contact to start your policy today.
What Is AARP Life Insurance?
The AARP insurance program features a great selection of policies that New York Life Insurance Company issues. This life insurance is great for anyone over the age of 50.
AARP Life Insurance Policies
The AARP life insurance program features term and permanent life insurance policies. The program also features a simplified underwriting process requiring applicants to answer specific health questions. Applicants do not need to undergo a medical exam to qualify for this insurance.
If you are looking for whole life insurance, AARP generally accepts everyone except those terminally ill. However, you must be an AARP member before you or your spouse can apply for these policies.
If you are not a member, you must be at least 50 before applying for the program. The annual membership fee is $16.
Term Life Insurance
AARP members between the ages of 50 to 74 can apply for this coverage. The spouse of the AARP member between the age of 45 to 74 also can apply. The term life coverage lasts up until the policyholder’s 80th birthday.
The amount of the death benefit stays level throughout the term of the policy, but the annual price for the policy increases. This yearly price increases each time the insured enters a five-year age band. The costs for this policy are not guaranteed, so the insured won’t know how much their insurance price will increase during these five-year age bands.
The rates for this policy depend on the age of the applicant. You can purchase a policy for between $10,000 to $100,000. If you are looking for a higher amount, you must contact New York Life.
How Does Term Life Work?
Your term life insurance policy pays out your selected benefit amount to your chosen beneficiaries when you pass away. This type of insurance coverage does not accumulate any cash value, but it is a more affordable option if you are looking for an inexpensive policy.
Whole Life Insurance
AARP members between the ages of 50 to 80 and their applicable spouses between 45 to 80 can apply for a whole life insurance policy. The annual price for this type of policy stays level, and the coverage will last throughout your life.
Once your policy is considered paid up, you no longer have to make payments on your policy. Instead, you can request a $50,000 policy through an online application. Acceptance is based on how you answer specific health questions.
How Does Whole Life Work?
In addition to a death benefit, a whole life policy includes a saving portion known as a cash value. The cash value component accumulates interest on a tax-deferred basis. If needed, you can request a loan or withdraw funds from the policy.
Guaranteed Acceptance Whole Life
AARP members between 50 to 80 can apply for the guaranteed acceptance of the whole life policy. Their spouses between the ages of 45 and 80 have the opportunity also to apply. Acceptance is guaranteed unless you have a terminal disease.
With this type of life insurance policy, only a portion of the death benefit is paid out if the policyholder dies within the first two years of the policy. After that, the insured must pass away from natural causes. The policy amount of guaranteed acceptance whole life policies start at $25,000 online, but there is the option to request a higher policy amount.
Whole Life for Children
AARP members have the opportunity to purchase life insurance for their children and grandchildren. However, the children or grandchildren are only eligible if they are under 18 through the AARP Young Start program.
Coverage is available up to $20,000, and no medical exam is required. The parent or guardian of the child is the listed beneficiary of the policy. Once the child turns 21, they step into the policyholder role and can elect their beneficiaries.
Life Insurance Buying Guide
Before you start looking into the difference between different life insurance companies, you will first need to decide which type of policy you want to apply for. You also may want to look into life insurance riders and determine how much coverage you want to have.
When comparing the rates between different life insurance companies, make sure that the quotes are the same amount of coverage over the same period. In addition, make sure that the insurer’s medical requirements meet your needs. For example, if you do not want to go through a medical exam, make sure the insurance company offers you that option.
Life Insurance Rate Factors
Many factors determine your life insurance rate, including your health and health history. For example, if you have a family history with a specific high-risk medical condition, your rates may be higher than average.
Other life insurance rate factors:
- HIV or AIDS diagnosis
- Asthma
- Diabetes
- Stroke
- Driving records reflecting previous DUIs or DWIs
Customers who have a history of drug or alcohol abuse within the past five years may see higher rates. In addition, tobacco use or any other type of nicotine used in the past twelve months may impact your policy rates.
AARP Insurance Riders
Insurance riders are typically billed as a very small percentage of your policy’s overall premium cost. AARP offers two riders that you have the opportunity to add to your insurance policy.
Accelerated Benefit
If a permanent life insurance policyholder becomes terminally ill and has a two-year life expectancy, they can access 50% of their benefit while they are still alive. It is important to note that New York residents must have a less than one-year life expectancy to access this rider’s benefit.
Waiver of Premium
AARP insureds who have permanent life insurance policies confined to a nursing home for 180 consecutive days may receive a waiver of premiums. The waiver of premium comes automatically with permanent life insurance policies.
This rider also stays as long as the insured stays in the nursing home. The nursing home must provide skilled nursing care under a licensed physician.
AARP Customer Satisfaction
The National Association of Insurance Commissioners, also known as NIAC, conducts an annual poll of insurance company complaints. These results are posted publicly for all consumers to review.
This survey allows the public to see which companies receive more complaints than others. A company with an average amount of complaints gets a score of 1.0.
AARP Life insurance is the best life insurance, according to their low complaint score. In 2020, AARP received a low score of 0.16, six times lower than the national average for life insurance insurers.
AARP Financial Strength
ARRP life insurance policies are underwritten by New York Life who has a superior rating in financial strength. New York Life is one of the most financially sound companies in the United States.
Customers know that they can depend on AARP to pay out on any claims made on their policies. Based on a 2020 J.D. Power U.S. Life Insurance study, New York Life ranked 6th place out of 24 life insurance companies. The customer satisfaction rating was based on the company’s communication, interaction, products offered, statements, and most importantly, the price of their products.
AARP Cons
Although the company offers many great AARP benefits, there are also a few cons that you need to consider. For example, many customers did not like that the term life insurance premium rose every five years. They also did not like that the online options for the amount of coverage they could elect were low.
AARP does offer higher policy amounts; you will have to call in to discuss your options for those higher amounts. Another pain point for customers was that they had to first be an AARP member before buying a policy. Thankfully, the application process for becoming a member is easy, and the annual fee is very low.
AARP Life Insurance Coverage
Now that you know about AARP life insurance, it is time to get you covered! Depending on which policy you choose to purchase, you have the option to accumulate savings that you can use while you are living.
Regardless of which policy you want to purchase, AARP has you covered. To learn more about AARP insurance and start shopping for the right policy for you, contact us now. We offer free no-obligation quotes!
