Comprehensive AARP Life Insurance Review

AARP, formerly called the American Association of Retired Persons, is a nonprofit organization with close to 38 million members. AARP’s primary focus is to improve the lives of Americans who are 50 years and older.

AARP is a nonprofit, nonpartisan, social welfare organization with a membership of nearly 38 million that helps people turn their goals and dreams into real possibilities.  – AARP

While their mission statement is impressive, it’s important to understand the details of the products and services that they offer. In this case, we’ll focus specifically on AARP’s Life Insurance Program.

The AARP Life Insurance Program is designed to offer a range of life insurance products to its members.

Important – AARP is not a life insurance carrier. Their life insurance policies are issued through New York Life Insurance Company.

AARP’s term life insurance program offers: Level Benefit Term Life Insurance 

No doubt, life insurance is a vital component to financial planning. You’ll want to understand the specifics of AARP’s program before making a life insurance purchase.

Table Of Contents

  1. AARP History
  2. Key Facts
  4. Other Programs
  5. Bottom Line

A Little History On AARP’s Life Insurance 

AARP was founded in 1958 by Dr. Ethel Andrus, a retired high school principal. AARP’s core beliefs are:

To promote independence, dignity and purpose for older persons. To enhance the quality of life for older persons. To encourage older people “To serve, not to be served”. – AARP History

Interestingly, Leonard Davis, an insurance salesperson, collaborated with Andrus to form AARP – out of a need for insurance.

Dr. Andrus worked to found the organization (called the National Retired Teachers Association, NRTA, at its inception) due to a lack of affordable health insurance options for retired teachers.

Insurance remains at the center of AARP’s focus. In fact, AARP receives more money from their life insurance program than from any other product they offer.

Although AARP is a nonprofit organization, they have a taxable subsidiary, AARP Services Incorporated. AARP Services Inc. earns money from life insurance sales and from other products AARP authorizes.

While their core beliefs are honorable, concern has existed over the actual value of AARP’s life insurance for decades.

For instance, in 1978, Harriet Miller, the former Executive Director of AARP, sued the nonprofit organization for being a “cover” for profits:

Two affiliated nonprofit organizations with 11 million elderly members were accused by one of their former top executives yesterday of being a “cover” for profit-making by one of the nation’s most lucrative corporations. – The Washington Post

Additionally, in his book, Sincerely, Andy Rooney, Rooney describes his 60 Minutes report from 1978, detailing his findings on AARP’s life insurance:

Leonard Davis made hundreds of million of dollars from the sale of life insurance policies to AARP members. The AARP was not much more than a front for his aarp life insuranceinsurance company. – Sincerely, Andy Rooney

Rooney’s 60 Minutes report did evoke positive change in AARP’s life insurance program. AARP ended their long-term partnership with Colonial Penn, and instead, contracted with Prudential Life Insurance Company.

Presently, AARP is contracted with New York Life, a highly rated life insurance company.

Keep in mind: AARP only contracts with one life insurance company at a time. In other words, your life insurance options are very limited.

More recently, CBS’s MoneyWatch, analyzed AARP’s life insurance program in 2009.

Does the AARP branding make them worth your money? Here’s what we concluded: Life insurance – Perhaps, if you have any health problems and need less than $100,000 in term coverage. Just don’t expect any bargains. – CBS MoneyWatch

At the end of the day, AARP acts as a marketer for life insurance to the highest bidder (currently New York Life) for their program.

Bottom line – AARP can benefit those older than 50 years old through advocacy and member benefits.

Unfortunately, the AARP stamp-of-approval for life insurance does not mean they are looking out for your best interest.

You’ll want to research the best no physical life insurance companies before making a purchase.

No Physical Term Life is not affiliated with AARP. You may reach AARP at 1-800-850-2658. 

Infographic: AARP Term Life Insurance Program Overview

Let’s take a look at some key details of AARP’s life insurance program:

aarp life insurance

*Policy features subject to change.

1. AARP Only Contracts With One Life Insurance Carrier At A Time

When you purchase life insurance through AARP, your policy options are, to put it mildly, limited.

Presently, AARP contracts with New York Life Insurance Company (source). For sure, New York Life is a highly rated company:

aarp life insurance

Source: New York Life Financial Strength Ratings, January 2018

New York Life’s financial strength ratings are impressive.

But, keep in mind: New York Life is paying AARP to be their exclusive life insurance carrier. Exclusivity is not ideal when shopping for life insurance.

What is ideal: Shopping multiple carriers to find the best policy at the best price to fit your needs.

2. AARP’s Term Life Insurance Has Specific Issue Ages

You must be between the ages of 50 – 74 to qualify for AARP’s life insurance. Spouses of AARP members can be between the ages of 45 – 74.

To compare, a number of no exam life insurance companies, such as Foresters and Phoenix Life Insurance, have issue age ranges of 18 – 80 years old.

Also, it’s important to understand that AARP’s life insurance coverage always ends at 80 years old.

3. AARP’s Policy Size Range Is Modest

AARP offers policies that range between $10,000 – $100,000.

Keep in mind, a cap of $100,000 is small compared to other carriers.

Additionally, AARP’s term life insurance is not ideal for end-of-life expenses (funeral, medical bills) because your coverage is guaranteed to end at age 80.

4. Your Policy Rates Will Increase

Unlike most term life insurance policies, AARP’s policy rates increase every 5 years.

The policy name, Level Benefit Term Life Insurance, is important to pay attention to. Wording matters.

What we mean: It is only the benefit (the amount your beneficiaries receive should you pass away during the length of your policy) that remains the same amount.

Your premiums (the amount you pay in exchange for your life insurance policy) increases every 5 years.

It’s important to look at a specific example to grasp how this impacts your pocketbook:

Source: AARP Level Benefit Term Life Insurance from New York Life Insurance Company. Premiums subject to change.

If you purchase a policy at age 50, by the time you reach age 70, you will be paying over four times the amount in premiums for the policy that remains the same size (in this case, $100,000).

5. AARP Does Not Require A Medical Exam

In fact, their underwriting process is quite simple. You will be asked 3 health questions to determine if you qualify:

  1. In the past 2 years have you had treatment for or been diagnosed by a doctor as having cancer, lung disease or disorder, diabetes, liver or kidney disease, AIDS, AIDS Related Complex, stroke, immune system disorder, or heart trouble?
  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?

*Underwriting health questions are subject to change.

AARP’s underwriting process – 3 health questions – is simpler than most no exam life insurance carriers’ process.

Additionally, New York Life will review records from public databases (this is standard procedure):

  • Driving record
  • Pharmacy database
  • Medical Information Bureau (records of previous insurance applications)

They do not require:

  1. Needles
  2. Nurses
  3. Liquid samples

Keep in mind – Plenty of carriers offer no medical exam life insurance – be sure to know your options.

Other Life Insurance Programs Offered By AARP

In addition to their term life program, AARP offers three other life insurance products. Availability does vary by state:

AARP Permanent Life Insurance

  1. Up to $50,000 of permanent group life insurance
  2. No medical exam
  3. Acceptance is based on your health question answers
  4. Your rates will not increase
  5. Eligible to AARP members,  50 – 80 years old (spouses 45 – 80 years old)

AARP Guaranteed Acceptance Life Insurance

  1. Up to $25,000  of permanent group life insurance
  2. No medical exam
  3. Guaranteed acceptance no health questions
  4. Limited benefits for the first two years
  5. Eligible to AARP members,  50 – 80 years old (spouses 45 – 80 years old)

AARP Young Start Life Insurance

  1. Give a child or grandchild up to $20,000 of life insurance
  2. Permanent life insurance
  3. No medical exam
  4. Acceptance based on health questions
  5. Eligible to AARP members, 50 – 80 years old for child or grandchild, up to age 17

Keep in mind – Permanent, guaranteed acceptance and baby life insurance (child) products are offered by many life insurance companies. It’s highly recommended you consider multiple carriers before purchasing a policy.

AARP Term Life Insurance Quotes

Let’s look at some sample quotes from AARP to compare their prices.

Monthly premium rates for a male for $50,000 in coverage:

aarp life insurance

Sample rates provided by AARP Level Benefit Term Life Insurance via New York Life. Subject to change.

Monthly premiums for females for $50,000 in coverage:

aarp life insurance

Sample rates provided by AARP Level Benefit Term Life Insurance via New York Life. Subject to change.

Important – Premium rates are significantly lower with other top-rated life insurance carriers. See our instant quotes.

Additionally, other carriers offer level premium term life insurance policies – meaning that the amount you pay for your life insurance policy will not increase.

Senior citizens, in particular, should consider all types of life insurance for seniors before making a purchase.

Bottom Line

AARP is a strong advocate for senior citizens. However, you need to think twice about the life insurance program they offer.

In order to purchase the best life insurance policy you qualify for, do two things:

  1. Partner Up – This is most important. You need an expert independent agent to collaborate with. An independent agent is not held captive to a particular life insurance company. That way, your best interest is at heart and you will have access to all the top non-med life insurance carriers.
  2. Prepare – Be ready to communicate effectively during the application process. This means writing down information about your medical history, medications, and lifestyle so that your answers are readily available.