AARP, or the American Association of Retired Persons, is an organization that provides support and benefits to older Americans. It is a members-only organization that boasts a member base of over 38 million. Not only does AARP offer discounts on insurance policies from many different providers, but you can also get insurance through them directly. Here’s what you need to know about AARP life insurance.
What Is AARP and How Does It Work?
In order to qualify for AARP life insurance, you must become a member. Members must be over the age of 50 and pay yearly dues of approximately $16. AARP offers discounts on a huge number of expenses you might encounter in your daily life, ranging from meals to events to cars and so much more. They also offer discounts on many different types of insurance and long-term care coverage. They release a monthly newsletter that contains important information for retirees and older Americans, and they have an entire community on their website of older Americans. They are known for their advocacy work for older Americans as well.
What Kind of Life Insurance Does AARP Offer?
In addition to the discounts they provide, AARP has its own life insurance program. Members can purchase policies, which are issued through the New York Life Insurance Company. Here are the types of life insurance policies that AARP offers.
- Term life insurance: For many people, this is the most affordable and practical life insurance option. It covers you for a specific period of time, and once it expires, you will need to buy a completely new life insurance policy. Term life coverage is available for AARP members until the insured’s 80th birthday. It’s available for members who are between the ages of 50 and 74. Spouses who are between 45 and 74 may also qualify. What’s unique about this particular life insurance coverage offering is that it increases in price every five years as you age. This is not typical of term life insurance policies. This type of insurance is typically used to cover any debts that you are paying off, or support children or other family members until they are stable on their own.
- Whole life insurance: These insurance policies do not expire the way that term life policies do – they will cover you for your entire life and the price stays level. AARP pays their whole life insurance policies out at age 95. AARP and New York Life also offer guaranteed whole life insurance policies, which do not require a medical exam. These policies are ideal for older individuals who may not qualify for a typical life insurance policy. However, they do not provide a very large death benefit – usually just enough to cover funeral expenses.
- Children’s life insurance: AARP also allows its members to buy whole life insurance policies for their children up to the age of 17. Benefits up to $20,000 are available, and when the child turns 18, they become the policy owner. They can then choose a beneficiary on their own. These insurance policies don’t require a medical exam and have low monthly payments, so they allow your child to get a start with life insurance before they get older and medical issues might make their policies more expensive. They also offer baby life insurance, which must be purchased when the child is unborn, or a newborn infant.
Advantages of AARP Life Insurance
There are several benefits that AARP’s life insurance program can offer. Here are some of the advantages of using AARP life insurance.
AARP’s life insurance is run by the New York Life Insurance Company. New York Life is a highly respected insurance provider with an A++ rating from AM Best. This is the highest rating the agency offers and is indicative of excellent financial strength. This is very important because you need to be able to trust that your insurance company will pay out the claims that you make. New York Life also scores relatively well in terms of customer satisfaction, and they get relatively few complaints when compared with other top life insurance companies.
AARP’s insurance policies offer a simplified underwriting process, making them much easier to qualify for than many other insurance policies. While some policies require medical exams to obtain, many of them don’t. You will typically just have to answer a few basic medical questions. This makes it a good option for people who may not qualify for life insurance with other providers because of their health.
AARP’s life insurance offerings for children are very unique. Many insurance companies don’t offer life insurance for kids because there isn’t much demand for it. While life insurance for children isn’t always necessary, it’s a nice option to have.
AARP has decent customer service. Consumer Affairs ranks them at about 3.6 stars out of 5. Many of the negative complaints pertain to things such as not getting a refund on a lapsed term policy, which is impossible. Many people talk about friendly service and quick responses by agents.
Disadvantages of AARP Life Insurance
Like any life insurance program, there are some disadvantages of using the AARP life insurance program as well. Here’s what you should keep in mind before you purchase an insurance policy.
AARP’s life insurance offerings are only available to its members. While AARP membership is very affordable, you must be over the age of 50 to qualify. This means that a significant portion of the population is not eligible purely based on age.
New York Life’s insurance program is not available in every state. This can also limit the number of people who are eligible for it.
Final Word on AARP’s Life Insurance
Overall, we rate AARP to be a B+. They have decent customer service, but not the best. Their prices are competitive, but usually not the lowest. They are backed by New York Life, so they are extremely financially stable, and have access to tremendous resources. They also have a limited product set compared to other life insurance companies since you can not get variable or universal products. They are definitely a company worth considering when you account for each factor.
If you are already an AARP member, it’s worth getting a quote for their life insurance services with New York Life to see what your options are. However, if you aren’t a member already, it may be worth looking elsewhere as opposed to signing up just for the insurance offerings. You can always get a collection of life insurance quotes from us at Life Ant to compare them to AARP policies. We encourage you to do this against any other insurance company’s offer before you purchase.