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AARP Term Life Insurance Review

When you’re looking to get life insurance coverage, the company is going to review dozens of different factors to calculate how much of a risk you are to accept for coverage. The more risk that you are, the more that you’ll pay in premiums. One of the biggest factors that they are going to look at is your age. If you’re older, you’ll be seen as a greater risk, which is going to translate into higher premiums.

If you’re an older applicant, you may assume that you can’t be approved for life insurance coverage, or that a plan will be too expensive, but in most cases that couldn’t be further from the truth. It’s important that you make the best decision for your life insurance needs. One of the most popular options for life insurance coverage for older applicants is to buy a plan from AARP.

AARP is a non profit organization with a mission of helping those that are age 50 and over have more choices and independence in their lives. So when I looked into AARP’s life insurance program, I was a bit surprised. It is my opinion that the product that AARP is offering is not beneficial to most seniors. AARP does not offer more than $100,000 worth of coverage and only works with NY Life – just 1 insurance company – which is why rates are not competitive as you will see by reading this article. In this article, I will break down what AARP offers to seniors and how it stacks up against the competition. So if you are considering getting a life insurance policy with AARP, read this first so that you are armed with the knowledge you need.

Products That AARP Offer

AARP offers 2 types of term life insurance products. Let’s take a look at each one, get some quotes, and compare what the competition offers.

AARP Level Benefit Term Life Insurance

Here are the highlights of this product:

  • Up to $50,000 in coverage
  • Can last up to age 80
  • Premiums that increase over time
  • No physical exam
  • Acceptance based on answering 3 health questions

The first problem I have with this product is that typically with Level Term Insurance, rates stay level for the entire length of the policy. With AARP rates increase every 5 years, and are not guaranteed.

 An example of a healthy 60 year old male applying for coverage with AARP vs its competitors:

With AARP a 60 year old male getting a $50,000 policy would start out paying $108.25 per month. At age 65 the rate would increase to $143.96 per month and from age 70-74 the policy would increase to $207.25 per month. Over a 15 year period, total cost would be $27,567,which averages out to be $153 per month over a 15 year period.

 

AGE 60-64 $108.25 Per Month
AGE 65-69 $143.96 Per Month
AGE 70-74 $207.25 Per Month
Total Average Per Month $153 Per Month

 

How does that compare to a 15 year level term policy with other life insurance companies?

Since most other term life insurance companies offer term life starting at $100,000 I’ll compare AARP coverage to $100,000 term life coverage with other insurance companies.  Depending on your health rating here are some quotes from other carriers:

Preferred Plus Non Tobacco Health Rating:

Prudential Life Insurance $100,000 AARP $50,000 Term Life
$46 per month for 15 years Average of $153 Per Month

 

 Preferred Non Tobacco Health Rating:

Prudential Life Insurance $100,000 AARP $50,000 Term Life
$57 per month for 15 years Average of $153 Per Month

 

Standard Plus Non Tobacco Health Rating:

Met Life $100,000 Life Insurance AARP $50,000 Term Life
$67.50 per month for 15 years Average of $153 Per Month

 

Standard Non Tobacco:

Prudential $100,000 Life Insurance AARP $50,000
$88.56 per month Average of $153 Per Month

 

Even if you aren’t in perfect health, such as needing life insurance and you are overweight and only qualify for a Standard Non Tobacco rating – You are still saving 40% off AARP’s Price and getting twice the coverage!

And while a 15 year term policy with other life insurance companies is guaranteed not to increase in price, AARP’s term life insurance is not guaranteed. Prices are subject to change.

AARP Extra Protection Term Life Insurance

AARP’s Extra Protection Term Life is very similar to its level benefit term life, except that you can get up to $100,000 in coverage and there are more requirements to get approved.

Let’s use our example of a 60 year old male again, except this time for $100,000 policy that will last 15 years.

With AARP life insurance rates go up every 5 years, and while they publish the rates, they are not guaranteed and could go up. For the purposes of this example, let’s assume that the AARP rates don’t increase over the life of this policy.

Between age 60-64 for $100,000 policy a man would be $129.92 per month.
At age 65, rates are set to increase to $174.92 per month, and at age 70-74 rates are set to increase once again to $258.92 per month. Total spent over 15 years would be $33,825 or an average of $187.91 monthly over 15 years.

Calculating Your Life Insurance needs

There are thousands and thousands of seniors that assume that they no longer need life insurance coverage because of their age. While in some cases this could be true, in the majority, it’s not. Before you apply for any life insurance, it’s vital that you understand what your needs are, or if you even need life insurance at all.

At this point of your life, your life insurance needs are going to look very different than younger applicants, but you should still be looking at similar categories to decide your life insurance needs. The first number to crunch is your debts and final expenses. If you don’t have any debts, or you’ve drastically paid off your debts, then you may not have a need for a life insurance plan, but if you’re still holding thousands and thousands of dollars of debt, you’ll need to buy insurance protection.

The next thing that you should look at is your annual income and if anyone realizes on that salary. If you’re children have their own jobs and pay for their own expenses, then a life insurance plan may no longer be needed. If you have people that rely on your salary, then they would struggle without that money.

Getting Affordable Life Insurance Coverage

One of the most common reasons that older applicants over the age of 50 don’t buy life insurance is because they assume that a life insurance policy is going to be too expensive. These applicants get an insurance quote through AARP, assuming that it’s going to be the lowest rates, and they are stunned to see how much they would pay for protection.

Regardless of your health or age, there are several ways that you can get insurance coverage at an affordable rate. While you’re going to pay more for your life insurance, that doesn’t mean that you have to pay for a plan that’s going to break your bank every month. There are a few lifestyle changes that you can make that can help you save thousands of dollars on your life insurance plan.

The first thing that you should do is cut out any tobacco out of your life. If you’re listed as a smoker, you’re at a much higher risk of being diagnosed with severe health complications, which means that the insurance company is going to offset that risk by charging you higher premiums. In fact, smokers are going to pay twice the amount for life insurance versus what a non-smoker is going to pay for the same amount of coverage. If you want to get the lowest rates available, you’ll need to kick the cigarettes once and for all.

Before the insurance company accepts your application for coverage, they’re going to require that you take a medical exam, and the results from the medical exam are going to impact how much you pay for the coverage. The better the results, the lower the premiums. If you want to trim down your life insurance rates, start getting regular exercise and stick to a healthy diet. Both of these are excellent ways to improve your overall health by losing weight, lower your blood pressure, lower your cholesterol, and reduce your chances of being diagnosed with health problems.

The best way to ensure that you’re getting the lowest rates is to get dozens of quotes before deciding which one is going to work best for you. Every insurance company is different, some of them are going to be more lenient on older applicants, which means that you’ll get drastically different rates. Finding the perfect company could be the difference in getting an expensive plan, like from AARP, or getting or more affordable insurance coverage.

Instead of wasting your time calling all of those companies yourself, let one of our independent insurance agents do all of the work for you. We have years of experience working with applicants over the age of 50, and we know which companies are going to give you the best rates. We can help save you both time and money on your life insurance search.

As you saw in my example above, if you were to apply with companies like Metlife, Prudential or AICPA Life Insurance and many of the other carriers we represent, you would pay significantly less, anywhere from $46 per month to $153 per month, depending on your health. A huge savings compared to AARP’s pricing.

It is my opinion that AARP does not offer a good deal to seniors. Don’t just take my word for it, you can read an article posted by CBS News titled “Life Insurance and Annuities: Is AARP Looking Out For You”.

It is disappointing that AARP does not do more for its members in terms of life insurance coverage.  I recommend that you compare life insurance quotes on our website by filling out the form below or calling us. We’re confident we can help you get much better pricing and more comprehensive coverage than what AARP offers.

AARP Life Insurance

Life insurance is one of the best safety nets that you can ever buy for your loved ones. You’ve reached a stage of life where life insurance is no longer in the front of your mind, but that doesn’t mean that you still don’t need insurance coverage. Not having life insurance could be one of the worst mistakes that you could make. If something tragic were to happen to you, and you didn’t have life insurance coverage, your family could be left with a mountain of unpaid expenses, which can make an already difficult situation a thousand times worse.

Because you never know what life is going to throw at you, you shouldn’t wait any longer to get the insurance protection that your family will need if something tragic were to happen to you. If you have any questions about AARP life insurance plans, or about the other options for insurance coverage, please contact one of our agents today. It’s our mission to ensure that you’re getting a quality insurance plan at an affordable rate.

We know that nobody wants to think about his or her death, but it’s important that you plan for the worst. Life insurance can be a frustrating purchase, but it doesn’t have to be. Our agents can make the process as easy as possible.

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Liran Hirschkorn

Liran Hirschkorn is the founder of Chooseterm.com. His mission is to help individuals across the country in finding the best rates on life insurance as well as helping individuals with high risk life insurance.

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