AARP Life Insurance – Is It Worth A Second Look?

AARP has become famous for their advertising (and they have spent a lot of money). They put a lot of funds towards commercials, online advertising, and mail pieces.

AARP provides a lot of products and services to the 65 and up community. If you fall into this demographic, you’ve probably gotten a lot of information about AARP.

On top of all the resources and tools they offer, they also sell life insurance. While they are a popular choice for a lot of seniors, they probably aren’t the best choice.

We are going to outline some of the reasons you should ignore all of the marketing ploys and find a better company for your insurance needs.

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The History of AARP Life Insurance Company

life insurance with AARPAARP, the organization formerly known as the American Association of Retired Persons, has been in existence ever since 1958. This entity actually evolved from the National Retired Teachers Association, or NRTA, which was established by Dr. Ethel Andrus, a retired high school principal in response to the need for retired teacher’s health insurance coverage.

Throughout the years, AARP has grown significantly, and has also evolved in response to changes in society, while at the same time remaining true to its founding principles of promoting independence, dignity, and purpose for older persons; enhancing the quality of life for older persons; and encouraging older people “To serve, not to be served.”

Today, AARP boasts roughly 38 million members. The entity helps those who are age 50 and over to turn their goals and dreams into real possibilities. This organization is also a strong advocate for those who are considered seniors, in the areas of health care, income security, employment, and protection from financial abuse. The overall mission of AARP is, “We fight for and equip each individual to live their best life.” The organization is also well known for:

  • Fostering communities with affordable and appropriate housing, as well as supportive community features and options for getting around;
  • Leading efforts for updating the Social Security program, as well as the promotion of other types of retirement savings options to help all to achieve a lifetime of financial security;
  • The promotion of adequate, affordable health care – which includes the ability to obtain needed prescription drugs and necessary long-term care services.

AARP Life Insurance Company Review

AARP offers its life insurance coverage through New York Life Insurance Company. There are term and permanent options to choose from – and, there is no medical examination required as a part of the policy approval process. For these policies, the life insurance coverage approval is based primarily on the health information that is provided by an individual at the time he or she applies for the coverage.

New York Life Insurance Company has been selling insurance since 1845. Throughout the years, the company has grown considerably and has always been strong financially. As of 2016, the company has a cash reserve of more than $22 billion.

Grades and Rates

They have received several excellent reviews from a variety of companies:

  • A++ (Highest) from A.M. Best Company
  • AA+ (Highest for life insurers) from Standard & Poor’s
  • AAA (Highest) from Moody’s
  • AAA (Highest) from Fitch

In addition to those rates, they have also gotten a B+ via the BBB, but they haven’t received accreditation.

Life Insurance Coverage Offered Through AARP

The life insurance coverage that is offered through AARP is protection that is underwritten by New York Life Insurance Company.

If you decide to buy a plan through AARP, your choices are going to be limited. An applicant can choose up to $100,000 in term life insurance protection. This affordable coverage will not require a medical examination as a qualification criteria.

Permanent life insurance is also available – up to $50,000 in protection. With permanent life insurance, the insured is covered by a death benefit, and there is also a cash value component attached to the policy. The money in the policy grows tax-deferred.

Like the term life insurance coverage, there is no medical examination required for the permanent life insurance policy offered by AARP. With this plan, there are just simply three health questions to answer.

AARP also offers a guaranteed acceptance plan through New York Life Insurance Company (source). With this policy, up to $25,000 in coverage can be obtained. This is permanent coverage, and the acceptance for this plan is guaranteed – regardless of the applicant’s health or health history. Coverage is affordable – and once qualified, the amount of the premium rates will never go up. Perhaps you are needing life insurance regardless of your health; if so, we can help.

The organization also provides the ability to purchase the “AARP Young Start” plan. This is life insurance coverage that is obtained on the life of a child or a grandchild – and that the insured can keep forever. This plan offers up to $20,000 in permanent life insurance protection – the premiums will never go up and the coverage will never go down.

There is no medical examination that is required to qualify. The approval of the child for the coverage will be based on just a few health-related questions on the application. Coverage can be granted on children who are up to 17 years old.

Senior Life Insurance Protection

While some people believe that life insurance is only necessary for those who have young dependents who are reliant on their income. In fact, there are many reasons why seniors seeking life insurance should also have the protection and coverage a policy can provide. Just some of the reasons for this include:

  • Payment of Funeral / Final Expenses – It’s important to have a life insurance policy that offers proceeds for paying these types of expenses so that the burden of this debt does not fall into the hands of loved ones.
  • Payoff of Debt – Seniors today may also have various debt obligations, such as a mortgage, auto loans, and/or credit card debt. With an insurance plan, these expenses can be paid off quickly and easily by loved ones.
  • Charitable Gift – By naming a favorite charity on one’s life insurance policy, a tax-free gift can be made, and the funds can be used for furthering the good of the organization.
  • Estate Equalization – In some cases, a senior may leave a business or other asset to one or more of their children. If the individual has other children and/or heirs, life insurance can “equal out” the inheritance.
  • Estate Taxes – In some cases, there may be estate tax due on the estate of a decedent. Without having life insurance properly set in place for paying off this obligation, loved ones may instead be forced to sell off assets to raise the necessary funds.
  • Replacement of Retirement Income for a Spouse or Partner – Often, if a couple is receiving retirement income from a pension when the primary income earner passes away, the survivor could be left with far less income for paying his or her ongoing living expenses.
  • Promise Keeping – Often, a senior will want to ensure that a child or a grandchild has the necessary funds for pursuing higher education, paying for a wedding, or putting down as a payment on a home. Life insurance can offer a way to provide those funds – even if the individual is not there.

The obvious demographic of AARP is customers who are 50-years or older. Because they are targeting older customers, seniors have a better chance of getting accepted for these policies.

There is no blood or urine sample needed, and it makes it easier for older people to get life insurance.

Other Products and Services that Can Be Obtained Via AARP

In addition to the life insurance program, AARP offers a long list of additional benefits to its members. One of these includes the ability to obtain lifetime retirement income through an annuity.  Many people have a concern about outliving their income in retirement. However, a retirement annuity can allow the ability to obtain an ongoing and guaranteed income stream for life – regardless of how long you may live.

Other benefits that are offered through AARP include restaurant discounts, grocery coupons, and food delivery service, as well as travel benefits (such as discounts on rental cars, hotels, cruises, flights, and vacation packages); savings on auto insurance coverage; resources for caregiving; college savings solutions; credit cards; investment services; employment resources (that are specifically geared towards those who are age 50 and over); money tools; retirement resources; roadside assistance; home security services; discounts on the purchase of computers and other types of electronics; cell phone services; discounts on shipping via the UPS Store; and a wide array of discounts on other insurance programs, including:

  • Auto insurance
  • Homeowner’s insurance
  • Long-term care insurance
  • Health and Medicare Supplement insurance
  • Mobile home insurance
  • Motorcycle insurance
  • Recreational vehicle and watercraft insurance

To obtain any of the coverages or benefits that are offered through AARP, it is first necessary to become an AARP member. This entails an annual fee of $16.

How to Find the Best Premium Rates on Life Insurance Coverage for Seniors

In 99% of situations, we recommend finding a different carrier besides AARP. Their rates tend to be more expensive than other companies. Some of our customers assume it’s their only option because they can be approved, but there are DOZENS of companies who will give seniors life insurance.

Those companies will offer you the same protection at a lower monthly rate. We don’t think you should settle for a plan which is more expensive.

If you want more information, or you want to know our recommended alternatives to AARP, you can give us a call. The other option is to use our form on the side. This form can give you access to all the carriers we’ve partnered with.

Not only do we work with a lot of companies, we know how to present your application in the best light possible. The better you look to the insurance company, the lower rates you can lock in.


Susan Wright, CLU, ChFC, RHU, REBC, ADPA, CITRMS, CIPA has been in the insurance and financial field for over 27 years. Even with years of experience, she continues to create new resources for others. Everything from books to training material.

Susan received her MBA from St. Louis University and her BA from Michigan State University.

She has worked in several areas but excels in writing material for both finances and insurance. Her goal is to give professionals credibility and assist in streamlining the sales process.

She has written countless articles for a variety of websites.

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