The AARP and New York Life Partnership
For AARP members seeking life insurance, the official program is underwritten by New York Life Insurance Company. AARP itself does not act as an insurer but established the AARP Life Insurance Trust to hold group policies for members. New York Life pays royalty fees to AARP for this exclusive partnership.
Life Insurance Products Offered Through the AARP Program
New York Life offers AARP members several simplified issue life insurance products, meaning they do not require a medical exam, but some do require a health questionnaire.
AARP Level Benefit Term Life Insurance This renewable term life policy is for members aged 50-74 (and spouses/partners 45-74) with coverage from $10,000 to $150,000. Premiums increase in five-year age brackets. No medical exam is needed, but a health questionnaire is required. It includes an accelerated death benefit for terminal illness.
AARP Permanent Life Insurance This whole life policy for members aged 50-80 (and spouses/partners 45-80) offers lifelong coverage up to $100,000. Premiums are fixed, and the policy builds cash value. A health questionnaire is required, but no medical exam.
AARP Guaranteed Acceptance Life Insurance This whole life policy for members aged 50-85 (and spouses/partners 45-85) guarantees acceptance without medical exams or health questions. Premiums are fixed. Coverage is typically limited to $30,000. There's a two-year limited benefit period for natural causes; beneficiaries receive premiums plus interest during this time.
Weighing the Pros and Cons of AARP's Program
Pros:
- No medical exam required for any plan.
- Guaranteed Acceptance option is available.
- Underwritten by highly-rated New York Life.
Cons:
- Premiums may be higher than other providers.
- Coverage limits might be insufficient for some needs.
- Term life rates increase every five years.
- Guaranteed Acceptance has a two-year waiting period for the full benefit for natural death.
- Limited options due to the exclusive partnership.
A Comparison of AARP Life Insurance Options
| Feature | Level Benefit Term Life | Permanent Life Insurance | Guaranteed Acceptance Life |
|---|---|---|---|
| Applicant Age | 50-74 (Member) / 45-74 (Spouse) | 50-80 (Member) / 45-80 (Spouse) | 50-85 (Member) / 45-85 (Spouse) |
| Coverage Length | Until age 80 | Lifelong | Lifelong |
| Maximum Coverage | $150,000 | $100,000 | $30,000 |
| Underwriting | Health questions, no medical exam | Health questions, no medical exam | No health questions, no medical exam |
| Premiums | Increase every 5 years | Fixed for life | Fixed for life |
| Cash Value | No | Yes | Yes |
| Waiting Period | No | No | Yes (2 years for natural death) |
How to Decide if an AARP Policy is Right for You
Consider your needs, health, and financial situation. If you require significant coverage or are in excellent health, exploring other providers might yield better rates. However, for older members or those with health concerns, the simplified application and guaranteed acceptance options through AARP/New York Life can be beneficial, particularly the Guaranteed Acceptance plan despite its waiting period. Comparing rates and features with other insurers is crucial. You can use resources like Bankrate to compare AARP's offerings with other market options.
Conclusion
New York Life is the life insurance company recommended by AARP, offering convenient policies with simplified underwriting for members. While accessible, especially the guaranteed acceptance plan, these policies may not always be the most cost-effective or provide sufficient coverage for everyone. Comparing the AARP program with other insurance providers is essential to find the best fit for your individual needs.
