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AARP Life Insurance

Life Insurance for Seniors – Are their plans too expensive?AARP Life Insurance

By Tom Poblano -  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. Read more by clicking HERE

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. Lets see how the rates stack up:

As you can see from the screenshot they are quoting $229.79

 

AARP Rate Chart

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. They will not decline you because you have seen a Dr in the last 3 months.

Summary

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 toll free number is 1-800-530-9134 or fill out my contact form.