The AARP has partnered with New York Life Insurance Company to create the “AARP Life Insurance Program”. Basically it is a program designed for members of AARP to get either permanent life insurance, term life insurance, or guaranteed issue life insurance. It appears as if the permanent insurance coverage is whole life insurance and it can be attained from age 50-80. The term life insurance requires no medical exam and only three medical questions to be approved for coverage and ages 50-74 can apply for this coverage. The guaranteed issue life insurance is exactly as it sounds. There is no medical exam or medical questions to be answered and it is for members 50-80. The guarantee issue pays limited benefits for the first two years except for death by an accident.
AARP has done well with this program as it has partnered with one of the premium life insurance companies with huge name brand recognition. While New York Life and AARP are great brand names, it is important to know that you often overpay for brand names. It may be that the rate for your product through the program can be beat in the private market. I suggest to clients that are interested in this program to let us run independent quotes for comparison. I compare the AARP Life Insurance Program to how you might overpay for a pair of expensive brand name jeans. You can get great jeans that don’t have the label of the fancy pair, but that serve you perfectly well. Just make sure you check out your options.
We get calls all the time about AARP life insurance and that clients are interested in this. The bottom line is that AARP has partnered with New York Life Insurance Company to offer life insurance to its members. No medical exam is required and only 3 medical questions are asked on the application. Since there is minimal underwriting the premiums are note going to be more than a fully underwritten product. With that being said it may be of benefit to some to have a product not fully underwritten as health may be a concern. If that is the case there are other companies that offer similar products that may be even more competitive.
Did you know that the life insurance carriers like when you buy term life insurance? A lot of clients we speak with think that it is the agenda of the insurance company to sell them permanent insurance because it costs more. While of course life insurance carriers want you to buy permanent products, they are quite content when you buy term. Only about 2 percent of term policies ever pay out a benefit and therefore it is highly profitable for them. A good option for many is to buy a return of premium term product. This allows you to have best of both worlds with term, but return of premium if you outlive the level term. If you are not familiar with this option you should ask about it. It is usually more beneficial the younger an insured is.
