Many seniors nearing their 80th birthday worry about their life insurance coverage expiring, particularly if they have an AARP policy underwritten by New York Life. This concern is valid for some policy types, but it's not a universal truth across all AARP offerings. Understanding the different kinds of policies available is crucial for anyone planning their financial future and ensuring their final expenses are covered. For those with a term policy, the expiration at age 80 is a key factor to address, while permanent options offer a different path entirely.
AARP Level Benefit Term Life Insurance
This is the policy type most people are referring to when they ask about coverage ending at age 80. The AARP Level Benefit Term Life Insurance is a temporary policy designed to provide coverage for a set period.
- Expiration at Age 80: This policy explicitly terminates on your 80th birthday.
- Increasing Premiums: The rates for this policy increase every five years as you move into a higher age bracket, which can become prohibitively expensive for those on a fixed income.
- Conversion Privilege: Before your 80th birthday, you have the option to convert your term policy to a permanent whole life insurance policy without needing a new medical exam. Rates for the converted policy will be based on your age at the time of conversion.
AARP Permanent Life Insurance (Whole Life)
For those seeking lifelong protection, AARP offers permanent life insurance options that do not have an age-based expiration.
- Lifetime Coverage: As long as you continue to pay your premiums, this whole life policy remains in effect for your entire life.
- Fixed Premiums: A significant advantage of this policy is that the premiums are locked in and guaranteed never to increase.
- Builds Cash Value: A portion of your premium payments goes toward building tax-deferred cash value over time, which you can borrow against in the future.
- Health Questions Required: While no medical exam is necessary, you will need to answer health questions to qualify for this type of policy.
AARP Guaranteed Acceptance Life Insurance
This permanent whole life policy is another option for seniors, particularly those with significant health issues who may not qualify for other coverage.
- Guaranteed Acceptance: Acceptance is guaranteed for AARP members aged 50-85 (in most states) with no medical exam and no health questions asked during the application process.
- Lifetime Coverage: Like other whole life policies, coverage is for your entire life with fixed premiums.
- Two-Year Waiting Period: Because acceptance is guaranteed, there is a two-year limited benefit period. If death from natural causes occurs within this time, beneficiaries receive a limited benefit, typically 110% of premiums paid. Full benefits are paid for accidental death from day one.
What to Consider After Age 80
If you have an AARP Level Benefit Term policy and are approaching 80, it's crucial to evaluate your options to avoid a lapse in coverage. While the conversion privilege is an easy path to continued coverage, it is not always the most cost-effective. Converting at an older age can lead to significantly higher premiums.
Alternatives Beyond AARP
Many independent insurance agents specialize in working with seniors and can offer a wider array of products. Other companies, such as those that offer final expense or 'burial' insurance, may provide more affordable options, or offer policies up to older ages.
Comparing AARP Life Insurance Options for Seniors
To help clarify the differences between AARP policies, here is a comparison table outlining the key features of each:
| Feature | Level Benefit Term | Permanent Whole Life | Guaranteed Acceptance Whole Life |
|---|---|---|---|
| Coverage Length | Temporary; expires at age 80 | Lifelong | Lifelong |
| Premium Rates | Increase every 5 years | Fixed; never increase | Fixed; never increase |
| Medical Exam | No exam; health questions required | No exam; health questions required | No exam or health questions |
| Cash Value | No | Yes | Yes |
| Waiting Period | No | No | Yes (2 years for natural death) |
| Eligibility | Ages 50-74 | Ages 50-80 | Ages 50-85 |
Making an Informed Decision
Before making any changes to your coverage, thoroughly assess your current financial needs and goals. If your primary goal is to cover final expenses, a permanent whole life policy is often the most reliable option, assuming you can comfortably afford the premiums. The key takeaway is to review your specific policy documents or speak with a New York Life representative to understand exactly what you have. For those with term policies, exploring all options before age 80 is the best way to ensure continuous financial protection for your loved ones.
This information is for educational purposes only and does not constitute financial or insurance advice. For personalized guidance, consult a licensed insurance professional.
For more information on AARP life insurance programs, visit the New York Life Insurance Company website.
