Shopping for AARP life insurance? Before you buy, let’s break down the real costs, coverage options, rates, and why better policies may be available.
This guide reviews AARP vs. other life insurance companies and compares its competitiveness for healthy people and those with high-risk medical conditions.
AARP Life Insurance – Easy Approval, but at What Cost?
AARP teams up with New York Life to offer life insurance policies designed for members. The marketing is hard to miss: No medical exams, easy application, lifetime coverage.
But convenience often comes with a price. And in the case of AARP life insurance, that price can be much higher than you’d expect, especially if you’re relatively healthy.
In this review, I’ll explain the four AARP life insurance policies, their costs, and when it might be smart to skip them for better options.
AARP Life Insurance – A Quick Overview
The AARP Life Insurance Program from New York Life offers no-medical-exam policies for AARP members. Policies are easy to apply for but come with higher premiums and limited coverage.
Key Selling Point: Easy approval—no medical exam required for any plan.
Key Drawback: Premiums are higher, and coverage amounts are limited.
AARP offers four products:
- Level Benefit Term Life Insurance – Up to $150,000
- Permanent Life Insurance – Up to $100,000
- Permanent Life with Living Benefits – Up to $100,000
- Guaranteed Acceptance Life Insurance – Up to $30,000
Now, let’s dive into the details.
AARP Level Benefit Term Life Insurance Review
Key features of this term life insurance policy include:
- Coverage up to $150,000
- No medical exam, health questions only.
- Premiums increase every 5 years (age bands).
- Coverage ends at age 80.
- Pros:
- Simple online application
- Fast approval
- Cons:
- Premiums increase every 5 years
- Coverage ends at age 80
- Healthy people are better off with underwritten policies.
AARP Term Life Insurance Rates
How do AARP term life insurance rates compare to other companies? AARP term life insurance rates are terrible when compared to other companies.
Remember that AARP rates increase at 5-year intervals, whereas other companies’ rates remain level for the term duration chosen.
Sample rates, male age 57.
| Coverage | Monthly Premium |
|---|---|
| $10,000 | N/A – not available |
| $25,000 | $14 per month with Assurity |
| $50,000 | $20 per month with Assurity |
| $100,000 | $30 per month with Transamerica |
| $150,000 | $44 per month with Transamerica |
As you can see, AARP term life insurance rates are not competitive.
AARP Permanent Life Insurance
Some of the key features of this whole life insurance policy include:
- Up to $100,000 in coverage.
- No medical exam required.
- Premiums stay level for the life of the policy.
- The policy may build cash value.
- Pros:
- Lifetime coverage
- No further premiums needed after age 95
- Simple approval
- Cons:
- Limited cash value accumulation
- Premiums are expensive
- Healthy applicants would benefit from an underwritten policy.
This is a simplified-issue whole life insurance policy. If you are relatively healthy, better options will exist with underwritten whole life and universal life policies.
AARP Permanent Life Insurance Pricing
So, how does AARP compare to other companies?
Take a look at these rates for a 57-year-old male.
How do rates from our companies compare? Here are prices for a 57-year-old male, whole life insurance with Mutual of Omaha, and universal life insurance for Pacific Life and Protective.
| Coverage | Monthly Premium |
|---|---|
| $5,000 | $21 with Mutual of Omaha |
| $10,000 | $39 with Mutual of Omaha |
| $25,000 | $58 – $64 with Pacific Life |
| $50,000 | $95 – $108 with Pacific Life or Protective Life |
| $100,000 | $136 – $176 with Pacific Life or Protective Life |
If you have health issues, you may still qualify for a better rate on an underwritten policy. As you can see, it is worth considering other options, especially once you think $25,000 or greater.
AARP Permanent Life Insurance with Living Benefits
A policy that includes living benefits for chronic illness may be worth considering. Features include:
- Whole life insurance with a 50% chronic illness payout option.
- No medical exam
- Premiums stop at age 95
- Cash value accumulates.
- Pros:
- Chronic illness benefit
- Lump sum living benefit
- Lifetime coverage
- Cons:
- Using the chronic care benefit cuts your death benefit in half.
- Medicaid eligibility may be affected if you use the living benefits
- Premiums are more expensive.
Living benefits are nice, but they come at a steep price.
You’ll pay extra for flexibility, and many people might be better off with a hybrid life/long-term care policy or a fully underwritten life insurance plan.
AARP Guaranteed Acceptance Life Insurance Review
AARP offers a guaranteed acceptance final expense insurance policy.
Features include:
- Coverage up to $30,000
- No health exam or medical questions
- Premiums stay level and stop by age 95
- Lifetime coverage.
- Cash value builds over time.
- Pros:
- Guaranteed acceptance
- You may borrow from the cash value
- Premiums stop at age 95
- Cons:
- Two-year waiting period for natural deaths.
- Premiums may exceed the death benefit over a long lifespan.
How do AARP Guaranteed Acceptance Rates Compare?
AARP recently announced lower rates for this policy, and the premiums are very competitive for coverage up to $15,000. Above that, there are better options.
Sample male rates, age 57
How do other companies compare?
| Coverage | Monthly Premium |
|---|---|
| $5,000 | $31 – Gerber Life |
| $10,000 | $62 – Gerber Life |
| $15,000 | $92 – Gerber Life |
| $25,000 | $60 – $67 – Pacific Life |
| $30,000 | $72 – $80 – Pacific Life |
In the above example, AARP and Gerber are guaranteed acceptance with a 2-year graded benefit period. Pacific Life requires underwriting but provides an immediate death benefit.
This should be a last resort policy for people who can’t qualify for anything else. Healthy people will find far better (and cheaper) options elsewhere.
Who Should Consider AARP Insurance?
AARP gives many people peace of mind, and the most important thing to do is to have life insurance.
From a price standpoint, the only AARP product worth considering is the guaranteed acceptance final expense insurance policy. Better deals are available for every other life insurance policy offered by AARP.
Contact us if you want to ensure you have the best deal available. We’ll show you all available options and let you compare them to AARP.
FAQ
It can be for people with severe health conditions, but most healthy individuals can find better, cheaper coverage elsewhere.
The term life premiums increase every five years. Permanent and guaranteed acceptance premiums stay level.
High premiums, limited coverage amounts, and waiting periods (for some plans).
AARP’s policies are slightly better priced and have more options, but still overpriced for healthy people. Both should be considered only when fully underwritten policies are unavailable.
It doesn’t. AARP term life insurance rates are far more expensive than other companies. In addition, AARP rates increase at 5-year intervals.
Final Thoughts: Is AARP Life Insurance Worth It?
AARP’s plans are convenient and easy to apply for, but that doesn’t make them a good deal for all members.
Get your personalized life insurance quotes today. Compare AARP life insurance to underwritten options that may cost less and cover more.
