AARP, the acronym for the American Association of Retired Persons, is one of the widely recognized names in the life insurance sector.
In fact, almost every senior has received a promotional letter in the mail from AARP, saw one of their online ads, or TV commercials promoting their burial insurance products. This leaves many people wondering whether AARP burial insurance is right for them.
First off, in the complete antithesis of your expectations, AARP’s popular organization is only a marketing organization, not a life insurance company.
The insurance policies purchased through AARP are underwritten by New York Life, one of the best life insurance companies in the US.
Due to AARP’s reputation and extensive membership, New York Life compensates them for the right to market life insurance under their brand and great assistance in promoting the offered policies.
If you’re planning to defray your end-of-life expenses, this post will comprehensively review AARP burial insurance policies to give you a solid foundation that will allow you to make an informed purchasing decision.
Read on to find out whether or not AARP burial insurance is right for you.
AARP is a nonprofit, nonpartisan, social welfare organization with a broad membership base of nearly 38 million.
The organization promises to turn people’s goals and dreams into real possibilities while fighting for issues that matter most to families.
They have been around since 1958 and has several affiliate organizations, including:
- AARP Financial Services Corporation
- AARP Insurance Plan
- AARP Services
- Inc. Legal Counsel for the Elderly
- AARP Foundation
When it comes to their burial insurance, what many people do not know is that AARP’s burial insurance is underwritten and managed solely by New York Life. Precisely, all policies featured in the AARP life insurance program are issued by New York Life Insurance Company.
New York Life, the underwriter of all AARP-branded life insurance, is a longstanding mutual insurance company that has earned a reputation for its superior financial strength. Being a mutual company means that certain policyholders are eligible to receive dividends.
The company has an A++ (Superior) financial strength rating from A.M Best and has been selling various life insurance products since 1845. As such, if you have a policy with them, you can rest assured that the policy will pay out when it is most needed to.
Importantly, AARP policies require membership in the organization. As a marketer of final expense insurance policies and other life insurance products, AARP focuses on members who are aged between 50 and 80 and seek ways to maximize their finances as well as defray their funeral expenses.
While the underwriter is a great life insurance provider, this does not necessarily make AARP burial insurance a good product. Find more details about AARP burial insurance products below.
AARP life insurance products
Purchasing a burial insurance policy is a great way to ensure that funding will be readily available to cover your funeral costs. For those looking to buy policies, AARP’s partnership with New York Life allows its members to access New York Life insurance products with unmatched ease.
The partnership offers group term and whole life insurance policies for seniors and whole life coverage for minors. Precisely, AARP offers three distinct life insurance policies:
- Level benefit term life insurance
- Simplified issue whole life insurance
- Guaranteed issue whole life insurance
These policies are only available to AARP members, which, for the most part, means that you have to be aged 50 and above to qualify.
Each policy has its own features, but all pay a tax-free cash benefit to your beneficiary
AARP Level Benefit Term Life Insurance
AARP’s Level Benefit Term Life is without question the flagship life insurance product that New York Life offers to AARP members.
As the name suggests, it is a term life product and is usually marketed and sold most aggressively. In fact, any time you see AARP online ads, TV commercials, or one of their direct mail pieces (sent on a weekly basis), this is the policy they are selling to you.
With an AARP term life insurance policy, you can obtain coverage worth anywhere between $10,000 and $100,000. While this amount is luring, sadly, this plan does not have a burial or final expense component in it despite being marketed as a burial insurance policy.
AARP’s term life insurance coverage expires at the age of 80, meaning you will not be covered once you turn 80. When buying this policy, it is like you are betting you won’t live past 80 years.
Considering that females and males in the United States tend to live until 81.2 and 76.2 years, respectively, this policy can leave families of policyholders financially vulnerable.
As if that is not bad enough, the rates for this policy increase every five years. AARP has age bands, which are age brackets within which they place policyholders. The rates will surge whenever you age into the next age band.
As such, the policy’s monthly payments will be affordable from the start but quickly increase to probably outrageous amounts than an average policyholder can afford. For this reason, it is far off from being ideal final expense insurance for seniors, especially those on a fixed income.
Qualifying for AARP Level Benefit Term Life
First and foremost, we would not recommend AARP’s level benefits term life to anyone looking for burial insurance.
While most insurance companies use the term “level” to denote a life insurance policy with fixed premiums, AARP intentionally places “level” before “benefit” to mean the coverage you buy will remain the same. For the most part, this is hype to lure members who do not take time to read policy details to purchase this policy.
As for qualifying, AARP members between 50 and 74 years, as well as their spouses aged between 45 and 74, can apply for AARP level benefit term life.
The policy doesn’t require you to take any medical exams. You will, however, have to pass three health questions, a prescription history check, and a MIB ( Medical Information Bureau ) check. The health questions for this policy are very strict, so it is either you have the conditions or not.
Precisely, your application for AARP level benefit term life policy may be declined if:
- In the past five years, you have been diagnosed with or received treatment or medication for having heart problems, lung disease, cancer, AIDS, ARC, stroke, liver or kidney disease, immune system disorder, or diabetes requiring insulin.
- Within the last five years, you have been hospitalized or confined in a nursing home, extended care, or treatment facility.
- In the past 12 months, you have consulted a doctor or had treatment, medication, or diagnostic tests of any type other than routine annual physical and HIV-related checks.
If you have any of these conditions or your medication history or MIB file reveals that you have received treatment for any of them, AARP won’t approve your application.
AARP only approves applicants who honestly answer no to health questions, and their medical history doesn’t provide conflicting information.
AARP Level Benefit Term Life Rates
AARP’s term plan has features that are not common in burial insurance plans. The organization places policyholders into age brackets known as age bands. The rates surge whenever a policyholder ages into the succeeding age band.
If you are obtaining coverage of $10,000 just like most people do, here are the monthly rates.
Rates for Females
- $11 – 50 to 54 years
- $13 – 55 to 59 years
- $17 – 60 to 64 years
- $21 – 65 to 69 years
- $33 – 70 to 74 years
- $33 – 75 to 79 years
Rates for Males
- $14 – 50 to 54 years
- $18 – 55 to 59 years
- $24 – 60 to 64 years
- $31 – 65 to 69 years
- $42 – 70 to 74 years
- $42 – 75 to 79 years
As seen, the monthly rates remain the same until you enter into the next age band. It is also clear that monthly payments won’t change after you turn 70 until the policy terminates at 80.
On the higher end, if you purchase a policy worth $100,000, you will end up paying over $300 per month, which is significantly high.
Considering that their prices are too high and increase over time, this policy should be the last resort when buying a burial insurance policy. Even with less than perfect health, you can land a better and affordable term life insurance policy elsewhere.
Further, buying a term life policy to cover final expenses is always a bad idea. After all, no one knows when they will pass away.
Before buying, contemplate how your family will take care of your end-of-life expenses should you outlive your policy.
Simplified issue AARP whole life insurance
Pretty much ONLY available upon request, simplified issue AARP whole life insurance is a standard final expense and burial insurance plan. For the most part, you should request this product; otherwise, AARP or their agents will sell the unworthy term life policy.
Like comparable offerings from other life insurance companies, this plan provides immediate coverage for those who qualify. Its significant benefit over the term plan is that it is permanent, meaning it doesn’t expire. The fact that it is permanent makes it very easy to understand.
Simplified issue AARP whole life insurance work like final expense policies. Here are the main features of this product:
Pricing is one feature that makes it easy to understand burial insurance policies. With this feature, it means that the monthly payments never increase for any reason. This can be a great benefit for seniors on a fixed income as it makes it easy to budget.
Coverage never expires:
If you qualify for AARP’s simplified issue life insurance policy, you will be fully covered from the very first day until you pass.
Even better, the death benefit never decreases as long as the policyholder pays premiums. This is very important as policyholders will be certain that they are leaving loved ones the funds to cover their end-of-life expenses.
With AARP’s simplified issue policy, you get coverage upon paying the initial premium. While this no-waiting period coverage is great, it is worth noting that the AARP plan is pricier relative to comparable plans from other companies.
That’s all about the features and how the policy works. If this plan has piqued your interest, the next thing you need to know is if you qualify.
Qualifying for AARP’s simplified issue whole life policy
Whole life insurance policies are pretty straightforward. To be approved for a policy, you don’t take any in-person medical exam. Instead, you answer a few health questions, and if your medical history doesn’t conflict with your answers, your application will almost certainly be approved.
Here are the questions that you should be able to answer an honest ‘NO’ to qualify for coverage:
- In the past two years, have you been admitted to or confined in a hospital, treatment facility, nursing home, or extended care facility for any condition?
- In the past two years, have you been diagnosed with or received treatment or medication for having a stroke, cancer, heart complications, liver or kidney diseases, lung diseases, AIDS, ARC, immune system disorder, or diabetes requiring insulin?
- In the past three months, have you consulted a medical professional or had treatment, medication, or diagnostic tests of any kind?
After answering these three questions, New York Life, the underwriter of AARP life insurance policies, will review your medical history or MIB records for consistency. Obviously, your application will be turned down if you have a condition listed in their questions.
AARP’s simplified issue products are available to AARP members aged between 50 and 80 years from all 50 states. Spouses of members aged 45 to 80 can also apply.
Simplified issue AARP whole life insurance coverage and cost
With AARP’s simplified issue policy, seniors can obtain a coverage amount ranging from $5,000 to $50,000. The amount you obtain while purchasing a policy will remain the same until you pass.
Talking about prices, this product is reasonably priced relative to similar offers in the life insurance sector. Even better, they do not have separate rates for tobacco users, meaning tobacco users might end up paying less than they would if they bought their policy from another carrier.
As with other carriers, the rates will increase by a fraction of a dollar to a few dollars every year. Here are sample prices for $10,000 coverage:
- $25 at 50 years
- $30 at 55 years
- $37 at 60 years
- $47 at 65 years
- $63 at 70 years
- $81 at 75 years
- $100 at 80 years
- $34 at 50 years
- $41 at 55 years
- $48 at 60 years
- $61 at 65 years
- $79 at 70 years
- $98 at 75 years
- $123 at 80 years
You cannot apply when older than 80 years, so make sure to plan accordingly if you are considering this plan.
Overall, this plan is great and affordable, even though not the cheapest in the market. If you are an AARP member and are looking for a way to defray your end-of-life expenses, you can consider it. You can’t go with this policy if you are a smoker and healthy – most health and medical conditions will disqualify you.
If you do not smoke, you can easily get affordable coverage elsewhere.
Guaranteed issue AARP whole life insurance
As the name suggests, guaranteed issue whole life insurance is a form of permanent life insurance that promises coverage to almost everyone who applies.
When applying for this policy, you don’t need to take any medical exam or answer health questions. As such, acceptance is guaranteed as long as you are an AARP member and meet the age requirements.
Notably, as with similar offerings in the industry, guaranteed issues life insurance policies by AARP have a 2-year waiting period. After the waiting period, the policies provide lifetime coverage as long as you pay the premiums on time.
Because this policy is permanent, it is extremely easy to understand. Here are the key features of AARP’s guaranteed issue whole life insurance policies.
- No medical qualifications:
Guaranteed issue whole life policies do not have medical underwriting. Approval is almost guaranteed as long as the applicant doesn’t have a terminal illness and meets age requirements.
- Level premiums:
Once you purchase AARP’s guaranteed issue whole life insurance policy, the rates will remain the same as long as you make the monthly payments.
- Coverage is locked:
The coverage amount you obtain when purchasing your policy will never decrease or terminate. This gives seniors assurance that their loved ones will have funding available to cover their burial and other end-of-life expenses.
- Waiting period:
It is common for guaranteed acceptance policies to have a waiting period, also known as the graded benefit period. During this period, policyholders usually pay their premiums, but they are not fully covered.
If a policyholder dies during the two-year waiting period, the beneficiaries will get graded benefits, which is the premiums plus 25% of the paid premiums in this case. Beneficiaries may get the full policy amount if the cause of death is an accident.
Qualifying for AARP’s guaranteed issue whole life policies
This policy has no medical underwriting. To qualify, applicants just need to be members of AARP and aged 50 to 80 years.
Candidates considering this plan should further note that the product is available in 48 states only. In New Jersey and Washington, AARP members can only access other AARP products, not guaranteed issue life insurance.
AARP’s guaranteed issue whole life insurance coverage and rates
With AARP guaranteed acceptance life insurance policy, you can obtain coverage of $2,500 to $25,000. If you are buying the commonly purchased coverage of $10,000, here are sample rates:
- $38 at 50 years
- $44 at 55 years
- $52 at 60 years
- $63 at 65 years
- $76 at 70 years
- $92 at 75 years
- $96 at 80 years
- $45 at 50 years
- $51 at 55 years
- $60 at 60 years
- $71 at 65 years
- $85 at 70 years
- $101 at 75 years
- $106 at 80 years
AARP guaranteed acceptance life insurance is by no means a cheap product.
If you are looking for a simple whole life insurance policy to defray your end-of-life and have poor health, you can look for a guaranteed acceptance policy elsewhere, not AARP.
There are many other life insurance providers offering the same exact guaranteed coverage as AARP, but their rates are far more affordable.
AARP burial insurance riders
When buying AARP’s whole life insurance policies, you have the option to customize your policy with riders. AARP only offers two riders:
- Accelerated death benefit:
If you buy an AARP permanent life insurance policy and customize it with this rider, you can accelerate up to 50% of your death benefit should you be diagnosed with a terminal illness.
- Waiver of premium:
If you get a disability or illness that requires you to stay in a nursing home, AARP will waive your premiums during your stay in the nursing home or until you turn 80 years.
Importantly, this waiver is only beneficial and starts working after you have been confined in a nursing home for at least six months.
Apart from riders, there is one benefit that people looking to buy AARP burial insurance policies should know. As a policyholder, you can borrow up to 100% of your cash value.
When borrowing, keep in mind that loans reduce your cash value and are subtracted from your death benefit in case you pass away before paying.
Pros of AARP burial insurance
The AARP life insurance company has some of its features, activities, and services that it offers to the market that makes some individuals prefer it over other life insurance companies.
While you may realize that some of their offerings are similar to those of other companies, they may be worth it, depending on your situation. Here are reasons enough for seniors to consider a burial insurance policy by AARP:
- No waiting period:
Unless you are buying AARP’s guaranteed acceptance policy, if you qualify for a burial insurance policy from this company, you will be fully covered immediately after paying the very first premium. This can be a great benefit for seniors who are already too old.
Even so, the no-waiting period may not be worth the overall cost, particularly if you are buying their term life policy. This is because the rates for AARP term life insurance increase over time.
If all you need is a policy that offers immediate coverage, do your due diligence, and you will most likely land a better offer.
- No medical exam is required:
AARP burial insurance is no-medical exam insurance, meaning you don’t need to take any in-person medical exam to qualify for AARP policies. Instead, you are required to answer a few health questions. This can be enormously advantageous, especially to those people who have chronic medical conditions.
However, as with other final expense insurance policies, conditions like cancer and heart diseases disqualify you from getting the insurance. Additionally, the no-medical exam aspect saves time that would have been used in the process of completing the in-person medical examination.
- Has an accelerated death benefit rider:
If you are purchasing either a whole life cover or a term cover, you have the option to customize your policy with riders. The accelerated death benefit rider favors you when you are diagnosed with a terminal disease, and the doctor advises that you have less than 24 months to live.
Should you be diagnosed with a terminal illness, you can contact the AARP insurance company, and you will be allowed to access up to 50% of the total policy coverage before you die.
You can use this amount to pay for medical bills or use the early benefit to replace your income as dependents find an alternative. With this rider, you will be privileged to benefit from your insurance cover benefits, even though they were meant to be used by your dependents to cover your burial and other expenses.
- A good customer-based reputation:
AARP company is well-rated in the market, and the complaints about it that are received are far less than the average expected complaints rate.
This might mean that the people who receive life insurance services from AARP are usually satisfied. This satisfaction can lead to the attraction of more customers to AARP or the underwriter.
- Open and transparent pricing:
As the world transits online, AARP makes its services available online. AARP members considering the AARP burial insurance can request a quote online by providing basic information about themselves.
Precisely, you can get just about anything you need as far as pricing is concerned online. For special requests, you can see the number on their official website or reach one of the licensed AARP agents.
- The price is not based on tobacco usage.:
Many life insurance companies vary their prices based on tobacco usage. Those who use tobacco are usually bound to pay more than non-tobacco users.
However, for AARP, policy prices are not dependent on tobacco usage. Whether you use tobacco or not, you will pay the same price for any coverage you wish to buy.
The coverage amount will also be the same for tobacco and non-tobacco users. As such, AARP burial insurance is an ideal option for anyone who has a history of tobacco usage.
If you are an AARP member and finding it hard to get an affordable policy, you can be better off if you purchase AARP simplified issue whole life insurance.
- Offer waiver on premiums:
Like other top-rated life insurance companies, AARP can waive policyholders’ premiums should they develop serious health conditions. With AARP, when you get an illness or disability and are admitted to a nursing home for good care.
You won’t be expected to pay premiums for the entire time you will be in a nursing home or until you attain the age of 80 years. Importantly, the premiums will only be waived when you spend more than six months in a nursing home.
- No premium payments once you get to age 95:
If you are blessed to survive for more than 95 years, AARP celebrates you by stopping you from paying premiums, especially if you have the guaranteed acceptance whole life policy.
Your coverage will remain in force for the additional years you will live even though you won’t be paying the monthly premiums. Your beneficiaries will be able to make claims and be paid at the moment of your death.
- Offers a 30-day free trial:
Most insurance companies offer a 10-day free trial where a client may choose to cancel the policy.
However, AARP has an extended period that gives clients enough time to analyze the insurance products bought and decide whether to continue having the policies or if they need to cancel.
When customers cancel their policy within 30 days, they are paid back in full all the premiums they had earlier paid.
- Comprehensive and user-friendly website:
The AARP website is very comprehensive and designed to serve customers in the best way possible. As a policyholder, you can manage your policy online.
Some of the things you can do include making payments, managing beneficiaries, getting important forms you might require, and updating your data.
- Their insurance products are issued by a third party:
If you are planning to buy AARP burial insurance, one thing that may keep you off is learning that they are not an independent life insurance company.
AARP is essentially a marketing organization that is compensated for promoting policies.
Their policies are solely underwritten by the New York Life insurance company, which can potentially compromise the quality of these products because the underwriting company also sells similar products.
- AARP only sells its products to its members:
To qualify to get life insurance cover from this company, you should first be a registered member of AARP. To get membership, you must pay a set registration fee and be age 50 and above.
If you can’t get the membership, you cannot qualify for insurance. Although they have a vast membership base, non-members cannot benefit.
- Their policies are not available in all states:
Even though the reasonably priced AARP product is available in all states, the policy for which most people can qualify, guaranteed acceptance plan, is available in 48 states.
If you cannot qualify for AARP simplified issue whole life insurance, you should look for a burial insurance policy elsewhere.
Considering that other final expenses policies by AARP are pricey, it may not be worth it to pay the extra dollars. Further, their child life insurance policies are not offered in New York, Maryland, and Washington.
- The coverage maximum is very little:
AARP offers different coverage amounts, but the overall maximum is $100 000. If you are buying a policy to replace your income when you die.
This amount may not be enough to help your beneficiaries handle the death rites and support themselves financially. Worse, you can only obtain coverage of this amount with a term policy, which can expire, leaving you financially vulnerable.
- Not all policies provide immediate coverage:
If you are considering AARP burial insurance, it may be worth noting that their products are not only expensive than the industry average but also do not always offer immediate coverage.
All in all, the waiting period should be the only reason for you to skip their policies because other carriers have a waiting period for their guaranteed acceptance policies.
- High price:
Comparing the quotes of AARP insurance companies against other life insurance companies, you will realize that they charge way far more. As discussed, the rates for their term life policies increase whenever a policyholder ages to age bands.
Their guaranteed acceptance of whole life policies are also too expensive compared to similar offerings by other carriers. The simplified issue plan, which is great for tobacco users, is, on the other hand, available upon request.
- Less coverage for early death:
If you qualify to get the easy acceptance of life insurance and die within two years, your beneficiaries will only receive 125% of the total premiums paid, not the actual policy coverage. This is common anyway.
- There is no 24/7 customer service:
While most companies offer reliable, 24/7 customer service, AARP customer service is only available a few hours and on specific days. This can inconvenience you should you need clarification when the service is not on.
- Cancellation fee:
With AARP, it is only free to cancel a policy during the few free trial days. Afterward, you have the freedom to cancel your policy should you find their products unsatisfying, but, even with this freedom, they have a cancellation fee.
This means you can’t get back all your premiums. Unfortunately, their cancellation fee is not displayed on their website.
- Their flagship program is term insurance:
AARP will almost certainly sell you their Level Benefit Term Life policy if you approach them in need of a policy.
Unfortunately, this policy does not have a burial component in it. If AARP persuades you to buy this policy, run away from them because it will expire.
- Erratic premium change:
AARP does not give its clients the assurance that the premiums will remain constant for the entire policy lifetime.
While the whole life policies seem to have price lock features, whenever there are any changes in the market, New York Life may increase the premium amount of some of the already sold premiums. This unpredictability makes it hard for clients to trust the AARP company.
- Not suitable for healthy people:
If you are healthy and do not fear taking a medical exam, you should avoid buying an AARP policy.
Considering the fact that the price does not vary depending on health status or tobacco usage, you may end up paying more than you could have paid in other companies. Many life insurance companies have better and affordable offerings for insurance policies for people with good health.
The most significant issue with buying AARP burial insurance is the high prices. Their only reasonably priced plan is available upon request, meaning AARP members who are not aware of the existence of the simplified issue whole policy may end up buying a policy that’s way too expensive.
Further, their simplified issue policies require you to be in pristine health. Overall, AARP is not a good option for people looking to purchase burial insurance policies.
- Does AARP Life Insurance company have a good reputation?
AARP is not an insurance company; instead, a marketing organization that promotes policies of partnering life insurance companies. Currently, the underwriter of AARP burial insurance policies is New York Life, one of the reputable carriers of life insurance policies.
- Is AARP life insurance worth it?
When you consider the customer reviews of both AARP and New York life insurance, you can conclude that their products are worth it. Even so, AARP final expense insurance products are way too expensive.
- Does someone take a medical exam to qualify for AARP burial insurance?
AARP policies are no medical exam policies. However, applicants will be required to answer some health questions before they are approved for coverage.
- Can you cancel a life insurance policy from AARP?
AARP offers a 30-day free trial period where you can choose to cancel the policy if not satisfied with it and you will be paid back the premiums. Canceling a policy within the first 30 days of purchase is free.
- What is not covered by AARP life insurance?
If death occurs as a result of suicide within the first two years of coverage, death benefits will not be paid. In some states like Washington and North Dakota, their state rules will apply in such a case.
Are you considering purchasing an AARP burial insurance policy? AARP is a marketing organization that partners with life insurance companies to make it easy for members to access and purchase burial insurance. Hopefully, you will find this post helpful when making your decision.
Unless you are a smoker and in pristine health, we would not recommend AARP burial insurance for you. If you are looking to buy burial insurance, you can easily land better offers elsewhere.
Mutual of Omaha is one of the best life insurance companies out there with affordable offers, and we highly recommend their products.