AARP Life Insurance Review

AARP

The AARP Life Insurance Program features a selection of policies issued by New York Life Insurance Co. for the group’s members.

The AARP advocates for older people and has more than 37 million members. Anyone age 50 or older can join. The nonprofit has a taxable subsidiary, AARP Services Inc., which earns money on sales of insurance and other products it endorses.

New York Life is one of the largest life insurance companies in the world. A mutual insurer, the company each year might pay dividends to its policyholders from any financial surpluses. New York Life announced that participating policyholders will receive a record $1.7 billion payout of dividends in 2016.

[Life insurance quotes are available through NerdWallet’s Life Insurance Comparison Tool.]

AARP Life Insurance options

The AARP program features term and permanent life insurance with simplified underwriting, which means applicants do not have to undergo a medical exam to qualify. There is also whole life insurance for which you cannot be turned down. Only AARP members and their spouses can apply for policies, but nonmembers who meet the age requirement can sign up for the $16 annual membership when they apply for coverage.

Term life insurance: AARP members ages 50 to 74 and their spouses ages 45 to 74 can apply, and the coverage can last until the insured’s 80th birthday. Although the death benefit stays level through the term, the premium increases each time you enter a new five-year age band. A term life policy can be converted to permanent insurance before age 80. The rates for permanent coverage will be based on age. The AARP term life product features coverage amounts of $10,000 to $100,000, although higher amounts are available by calling New York Life. You answer three health questions and provide other health information, but do not have to take a medical exam or undergo tests to apply. Most applicants are accepted.

Whole life insurance: AARP members ages 50 to 80 and their spouses ages 45 to 80 can apply. The annual premium stays level and stops at age 95. Coverage ends at death regardless of age. Up to $50,000 of coverage is featured, although higher amounts are available by calling New York Life. Acceptance is based on answers to three health questions.

Guaranteed acceptance whole life insurance: AARP members ages 50 to 80 and their spouses ages 45 to 80 can apply, and acceptance is guaranteed. You don’t have to answer any health questions or provide any medical information. However, only a portion of the death benefit (125% of the premiums paid) is paid out if the insured dies of natural causes in the first two years of the policy. The full benefit is paid from the first day of coverage for an accidental death. Up to $25,000 of coverage is featured, but higher coverage options are available by calling New York Life.

Whole life insurance for children: AARP members ages 50 to 80 can buy whole life policies for their children or grandchildren who are up to age 17 through the AARP Young Start program. Coverage of up to $20,000 is available. No medical exam is required; acceptance is based on answers to three health questions. The cost for a $20,000 policy is $120 a year. The parent is the beneficiary on the policy. At age 21, the child becomes the policy owner and can choose a beneficiary.

New York Life’s financial strength is rated A++ (superior), the top rating by A.M. Best.

AARP life insurance at a glance
Pros Cons
  • Older people with some health issues can qualify for coverage. No medical exam is required for any of the policies.
  • In most states you can apply online.
  • Backed by a life insurance company with superior financial strength.
  • For healthy people, premiums are likely higher than for policies that require a medical exam to qualify.
  • Available only to AARP members and their spouses. Membership costs $16 a year and is limited to people age 50 or older.
  • Term life premiums increase through the policy’s term as the insured ages. This could make budgeting for coverage more challenging than for a level-premium term life policy.

New York Life customer service

New York Life ranks better than most life insurance companies for customer service, according to research firm J.D. Power. In a customer satisfaction survey of 21 of the largest U.S. life insurance companies, New York Life scored four out of five possible points for overall satisfaction, price, customer interaction, policy offerings and billing and payment.

New York Life Insurance customer satisfaction scores
Overall satisfaction Better than most
Billing and payment Better than most
Price Better than most
Policy offerings Better than most
Interaction Better than most

Source: J.D. Power 2015 U.S. Household Life Insurance Study

AARP life insurance prices

Here are average annual rates for term life insurance for 50- to 54-year-old men and women for coverage ending at age 80, according to the AARP Life Insurance Program website. The premium for your policy will increase as you enter a new five-year age band.

AARP term life insurance – sample yearly rates
Applicant Coverage amount
$10,000 $25,000 $50,000 $75,000 $100,000
Men age 50-54 $161 $330 $612 $749 $885
Women age 50-54 $126 $242 $435 $525 $615

Source: AARP Life Insurance Program

Here are average annual rates for whole life insurance, with acceptance based on answers to three health questions. Premiums stay level and end at age 95 while coverage continues until death.

AARP whole life insurance – sample yearly rates
Applicant Coverage amount
$5,000 $10,000 $15,000 $25,000 $50,000
Men age 50 $205 $398 $591 $978 $1,943
Women age 50 $173 $334 $495 $816 $1,621

Source: AARP Life Insurance Program

Here are average annual rates for AARP’s guaranteed-acceptance whole life policy. Premiums stay level and end at 95, while coverage continues until death.

AARP guaranteed acceptance whole life – sample yearly rates
Applicant Coverage amount
$2,500 $5,000 $10,000 $15,000 $25,000
Men age 50 $142 $273 $533 $794 $1,316
Women age 50 $121 $229 $446 $664 $1.098

Source: AARP Life Insurance Program

Barbara Marquand is a staff writer at NerdWallet, a personal finance website. Email: bmarquand@nerdwallet.com. Twitter: @barbaramarquand.