As the largest nonprofit organization in the United States, the American Association of Retired Persons (AARP) charges its members a monthly fee of $16. In exchange, you receive discounts on restaurants, travel, even healthcare providers.
AARP also provides life insurance through a 3rd party. It’s important to note that you must be an active member in order to be eligible for their life insurance plans.
Two things you need to know about AARP
The first thing you need to know before buying life insurance from AARP is that they do not write their own policies.
- All of AARP’s life insurance policies are written by New York Life.
It’s worth noting that New York Life is a reputable company in the world of insurance. In addition, they are the third largest life insurance company in the United States and boast an A+ BBB rating. (Although they are not currently accredited by the BBB at the time of publication.)
- AARP’s New York Life policies are all sold as exclusives for their members.
Their offerings do carry a lot of positives. It’s worth noting though that they tend to be more expensive than many other options available on the market. So, it pays for you to understand their offerings and do some shopping around on your own.
If you’re considering buying a life insurance policy from AARP, you should dig into what they’re really offering. Here’s a helpful breakdown of all the policies they are offering:
The four AARP life insurance plans
1. AARP Level Term Benefit Life Insurance
- Basic term policy offering, which carries a level death benefit and lasts until the insured turns 80. Their term policy ranges from
- Coverage amounts of $10,000 to $100,000 of coverage
- Doesn’t require a medical exam. As another benefit
- There are only three yes or no qualifying questions
The three qualifying questions:
- In the past 2 years, have you had treatment or medication for or been diagnosed by a doctor as having heart trouble, stroke, cancer, lung disease or disorder, diabetes, liver or kidney disease, AIDS, AIDS-related complex, or immune system disorder?
- In the past 2 years, for any condition, have you been admitted to or confined in a hospital, sanitarium, nursing home, extended care, or special treatment facility?
- In the past 3 months, have you consulted a doctor or had treatment or diagnostic tests of any type?
What you need to be careful about with these policies are the premiums.
At first, they are affordable but they slowly rise every five years over the policy’s lifespan.
While it doesn’t require a medical exam, it also means that the policy will be more expensive than what is available from other providers.
|No medical exams||More expensive to get more coverage|
|Only three easy questions to answer||Premiums slowly increase every five years|
|Premiums stay level based on the applicant’s initial age||Term length expires at age 80|
2. AARP Permanent Life Insurance
- Offers up to $50,000 in permanent coverage.
- No medical exam is required.
- Premiums are level and never increase over the policy’s lifespan.
- The policy stays in force as long as the insured is alive.
- Monthly premium payments cease at age 95.
- Grows a cash value that the insured can borrow against.
Unfortunately, the biggest hang up with their permanent policy is more expensive than many other permanent offerings on the market. Meaning, AARP’s policies might not be the most affordable option if price is at the forefront of your search.
|No medical exam required||More expensive than other options|
|Guaranteed permanent coverage||Cash value growth is slower than many comparable policies|
|Grows cash value|
3. AARP Guaranteed Acceptance Life Insurance
- Carries a maximum permanent benefit of $25,000
- No medical exams required.
- No health questions to answer.
- Graded death benefits for the first two years.
With a guaranteed acceptance coverage insureds run the risk of outliving their policy. In other words, insureds may wind up paying more in premiums than their death benefit is actually worth.
Here’s a helpful formula to see how long until it will take to outlive your policy:
Death Benefit/(Monthly Premium x 12) = How Many Years Until You Outlive Your Policy
If you don’t want to run the risk of outliving your policy, you may want to consider other coverage options instead.
|Guaranteed coverage||More expensive coverage|
|Easy application||Limited benefits for the first two years|
|Grows cash value||Insured runs the risk of outliving policy|
4. AARP Young Start Life Insurance
- Provided for children or grandchildren of AARP members.
- Carries a maximum coverage amount of $25,000.
- Does not require a medical exam.
- Only requires answers to general health questions.
- Stays in force after the parent passes away, as long as:
- The policy has been in force for more than 2 years.
- The child is under 21.
- The child becomes the policy’s beneficiary after age 21.
|Low rates for children||Premiums will vary based on the child and their response to medical questions|
|No medical exam|
|Rates won’t increase for the child|
It pays to compare life insurance rates
If you are an active AARP member and you enjoy the benefits you receive, getting life insurance through them may seem like an obvious choice.
However, it doesn’t cost anything to run a quote and compare other providers. Instead, you could save hundreds of dollars a year, for the same coverage, with the same benefits.
Buying life insurance as a senior can be a needlessly difficult and treacherous experience.
Unethical insurance salespeople and agents from less reputable providers prey on seniors over 75, by selling low-quality final expense policies. This is because agents’ commissions are based on a percentage of the first year premiums, in some cases up to 110%. So, their job is to sell these low-quality policies to unsuspecting and vulnerable seniors.
We encourage anyone who is being solicited with these types of policies to contact an independent agent for a second opinion on the policy being offered and to obtain other quotes from higher quality companies before making your final decisions.
Who Are The Best Life Insurance Companies For Seniors?
- AIG American General
- Mutual of Omaha
- Great Western
- United Home Life
- Columbian Life
AIG is an international brand and one of the largest life insurance companies on the market. They write everything from small guaranteed acceptance policies to multi-million dollar life insurance policies for CEOs. Basically, AIG gives customers one of the largest selections of insurance products on the market. Though, AIG’s competitiveness depends largely on the product you select. Their guaranteed life insurance policies tend to be some of the most affordable options for seniors looking for life insurance.
Gerber is probably best known for their “Grow Up Plan,” insurance for children aged 14-days-old and up. But, they also provide a popular, financially strong, Guaranteed Issue policy which is extremely popular for seniors. Their rates are extremely competitive and provide final expense protection at a reasonable cost.
Mutual of Omaha is well-known as one of the most trustworthy big names in life insurance and financial services. For seniors, Mutual of Omaha provides a no-exam, whole life, final expense policy which provides excellent overall coverage.
A relative unknown, Great Western provides a high-quality product for seniors looking for life insurance. This is also coming from one of the most financially secure life insurance companies in the marketplace. On top of life insurance, Great Western also is a leader in the pre-need insurance which is used to cover predetermined funeral expenses and often sold through local funeral homes.
For life insurance customers aged 65 and older, Sagicor offers an excellent, affordable solution. Their term life insurance policies are convertible at age 70 and accelerated death benefits are included at no cost. These benefits provide the lesser of 50%, or $300,000, to the insured if they’re terminal or chronically ill.
Assurity provides a strong life insurance solution with affordability for seniors looking for a life insurance policy. Their guaranteed acceptance life insurance policy is one of the cheapest on the market for those looking for final expense coverage.
Having been around for 100 years helps when life insurance companies, like Americo, want to tout their overall stability. Focusing on annuities, final expense, and mortgage protection; Americo provides multiple options for customers to place themselves in a better position with multiple end-of-life options.
After their acquisition by Nassau RE, Phoenix rebranded itself as one of the major players in the retirement income and final expense marketplace. One of the biggest downsides is that some of their policies terminate when the insured reaches 75. This makes Phoenix’s offering a bad option for those who want long-lasting final expense coverage.
Unite Home Life is a little known company with great options for life insurance for seniors. Their application is simple, they don’t require medical exams, and they issue policies up to age 80. UHL offers great coverage for those diabetics who are insulin dependent or those on disability as well. We highly recommend this policy for those with less than ideal medical histories, who want affordable final expense coverage.
Similar to Great Western, Columbian Life Insurance offers guaranteed issue policies and pre-need coverage on top of some standard type life insurance policies. This company does focus heavily on the permanent life insurance market (whole life and universal life) but also offers standard term policies. Columbian Life tends to be more expensive than some of the other options offered on the market. This is why it’s worth looking at all options available before making a decision to purchase.
What Are The Best Types of Life Insurance For Seniors Based on Age?
Given that many life insurance underwriting standards change during the twilight years, seniors are often left with limited options as they age. While everyone is looking for cheap life insurance, prices for insureds over 60, unfortunately, aren’t cheap. Here’s what we recommend based on your current age:
Best Life Insurance For Seniors Over 60
If you are under 65, we recommend you focus on a standard term life insurance or a no medical exam term life insurance policy. These policies offer you an excellent value and better bang for your buck. However, many companies will stop offering these policies the minute you turn 65.
Best Life Insurance For Seniors Over 65
Once you hit the age of 65, life insurance becomes more expensive and there are fewer options. You may be better off looking into a universal life policy like one from Sagicor. This provides life insurance coverage up to age 121 if you are seeking permanent coverage with a larger dollar amount.
Best Life Insurance For Seniors Over 70
Depending on the amount of coverage you need, life insurance for seniors over 70 becomes more difficult. We see more of a shift to guaranteed issue and other final expense products to help cover some end of life expenses and medical bills.
Best Life Insurance For Seniors Over 75
Once you are in the 75-year-old range, your options for life insurance are even more limited. In most cases, a Gerber Life or Mutual of Omaha guaranteed acceptance policy (or another similar company) may be the best option on the table from a cost perspective.
Best Life Insurance For Seniors Over 80
After you reach age 80, the majority of life insurance companies will no longer extend coverage, even for guaranteed issue. A handful of companies will offer coverage and AIG’s guaranteed issue life insurance generally tends to be the most affordable, coming in 25% cheaper than others in some situations.
Best Life Insurance For Seniors Over 85
To get life insurance at 85, you are left basically one main choice: it’s AIG’s guaranteed issue policy. Mutual of Omaha provides a simplified issue whole life insurance policy (with health questions) that cuts off at 85, but it isn’t a guaranteed acceptance policy. Both companies provide great coverage, but after 85 your options become even more scarce.
What Are You Looking For From Your Life Insurance?
- The cheapest life insurance policy?
- Life insurance with cancer?
- Life insurance with medical issues?
- Life insurance without health questions?
- Life Insurance without a medical exam?
What Is The Cheapest Life Insurance For Seniors?
In almost every case, the cheapest life insurance for seniors is going to be a fully underwritten policy (with medical exam). However, some insurance companies are only willing to cover insureds up to a certain age. In this case, we recommend a guaranteed issue policy, providing guaranteed coverage, with a low death benefit. If you’re still in the workforce, you can consider a group term life insurance policy as well.
In many of these cases, your insurability is going to be based largely on your age when you apply. Some companies stop underwriting traditional policies around 65, leaving seniors with very few options of affordable and cheap life insurance.
What Is The Best Life Insurance For Seniors With Cancer?
Health history plays a huge role in the overall determination process when it comes to seniors finding the best life insurance rates with cancer. While age is a concern for underwriters, a poor health history that includes cancer treatment is another red flag for many insurance companies.
If the cancer treatment happened less than 5-10 years ago, guaranteed issue life insurance is most likely your best option. Final expense life insurance policies like this are designed to cover your burial costs and medical bills. Many also come with “graded benefits,” meaning that death by natural causes is not covered for the first 2-3 years, but accidental death is covered.
Another option to consider if you’ve had a more recent battle with cancer is an accidental death and dismemberment policy. These types of policies only cover death in the event of an accident and have some of the lowest premiums on the market. Insurers usually care less about your health status, as they only pay out the death benefit if you die accidentally.
What Life Insurance Is Best For Seniors With Medical Problems?
Depending on the insured’s age, and the extent of their medical issues, they should consider a company with flexible underwriting regarding health issues. Companies like AIG or United Home Life may offer the best solution. If the medical issues are more severe or there is a more recent history of cancer, guaranteed issue may be the best (or only) option for life insurance. The most important thing is to talk with an independent agent and let them shop around to find the best policy at the best price, given your conditions.
What About Life Insurance For Seniors With No Health Questions?
A guaranteed issue policy is your best option if you don’t want to deal with any health questions. AIG American General offers one of the most affordable guaranteed acceptance policies on the market with no health questions required. We recommend this product for seniors looking for final expense coverage from a financially strong company. Another great company with no medical questions is Gerber Life and is a popular option for many seniors looking for life insurance.
What Is The Best Life Insurance For Seniors With No Medical Exam?
The main options for seniors looking for life insurance but are not wanting to deal with a medical exam is either a no medical exam term life insurance policy (if you qualify based on age and health standing) or a guaranteed issue/ final expense policy. These types of policies don’t require a medical exam, but some may ask health questions and verify that information with your MIB and pharmacy report. Guaranteed issue policies will not ask any health questions, but will often be more expensive to the other options on the table.