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AARP Life Insurance Review 2018

February 7, 2018

 


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AARP

At a glance

  • Offers small selection of New York Life term and whole life policies to AARP members
  • No medical exam required to apply
  • Anyone 50 and older can join 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.

NerdWallet rank: 7th

New York Life ranked No. 7 out of 18 large companies scored by NerdWallet. NerdWallet’s life insurance company rankings take into account its A.M. Best rating, consumer complaints and J.D. Power’s customer satisfaction score.

» MORE: The best life insurance companies

A.M. Best financial strength rating: A++ (superior)

New York Life’s financial strength is “superior,” according to ratings agency A.M. Best.

Financial strength is important because it indicates how well an insurer can pay claims. It’s especially important when choosing a life insurance company, because claims might not be made until many decades after a policy is purchased.

Consumer complaints: Better than the median

New York Life drew significantly fewer than the median number of complaints to state regulators in 2015 for a company of its size, according to the latest data from the National Association of Insurance Commissioners.

The association assigns a complaint ratio score to insurance companies, based on the number of complaints to state insurance commissioners, adjusted for market share. The median score is 1. A score less than 1 means fewer complaints. New York Life’s score for individual life insurance in 2016 was .15.

J.D. Power ratings: Average

New York Life ranks about average for customer service, according to research firm J.D. Power’s 2017 U.S. Life Insurance Study. The insurer ranked No. 12 overall among the 24 companies included in the survey.

New York Life customer satisfaction scores
Overall satisfaction Average
Billing and payment Average
Price Average
Policy offerings Average
Interaction Average
Source: J.D. Power 2017 U.S. Life Insurance Study

 

More about AARP life insurance

Types of life insurance sold through AARPOther New York Life products sold through AARP
  • Term life
  • Whole life
  • Guaranteed acceptance whole life
  • Life insurance for children
  • Annuities

     
     
  • AARP Life Insurance options

    The AARP program features term and permanent life insurance with simplified underwriting, which means applicants answer health questions but do not have to undergo a medical exam to qualify. The program also offers whole life insurance with guaranteed acceptance, regardless of health. Only AARP members and their spouses can apply for policies, but anyone who meets the age requirement can join when they apply by signing up for the $16 annual membership.

    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 annual price increases each time the insured person enters a new five-year age band. The prices are not guaranteed, so applicants can’t know precisely how much they’ll pay for insurance in later age bands. 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. Applicants answer a few health questions and provide other health information, but do not have to take a medical exam.

    Whole life insurance: AARP members ages 50 to 80 and their spouses ages 45 to 80 can apply. The annual price stays level and the policy is paid up at age 95. Coverage ends at death regardless of age. Up to $50,000 of coverage is offered, 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. Applicants don’t have to answer health questions or provide 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 parent is the beneficiary on the policy. At age 21, the child becomes the policy owner and can choose a beneficiary.