You’ve probably heard of the AARP (formerly named the “American Association of Retired Persons”). After all, it is one of the most active and widespread organizations of its kind across the country, assisting people in their 50s and above with life’s needs. AARP does offer life insurance to seniors, but how does it stack up to the competition?
If AARP isn’t what you’re looking for, we suggest you take a look at our Colonial Penn Review if you are interested in exploring your options.
AARP Term Life Insurance
The AARP has two different kinds of term life insurance that it offers— Level Benefit term life insurance and Extra Protection term life insurance. With both, rates go up every few years, and they don’t offer senior citizens very good deals in the long run. Let’s take a closer look:
Level Benefit Term Life Insurance
In most cases of “Level Benefit” insurance with other companies, the rates do not increase throughout the entire policy term length. With AARP, however, the rates go up every five years, and even then they are not guaranteed. These policies also only come in up to $50,000 as far as coverage goes, although most other life insurance companies start at $100,000 and go far beyond that. And while it can be considered a pro that no physical exam is required (applicants only have to answer three questions about their health), the lack of thoroughness means that even if you are very healthy, you will not get competitive, low rates because of it. Coverage also only lasts up to age 80, so those who are older are out of luck. There are also options such as AICPA life insurance if this is something you are interested in.
Here are some rate examples for AARP Level Benefit Term Life Insurance:
- Male, ages 60 to 64: $108.25 owed each month
- Male, ages 65 to 69: $143.96 owed each month
- Male, ages 70 to 74: $207.25 owed each month
The average for these rates is $153 every month. For comparison, here is what other life insurance companies are likely to offer in monthly rates when it comes to $50,000 in coverage for a 60-year-old man, for a period of 20 years:
- Genworth: $35 a month
- American National: $71 a month
- Transamerica: $72 a month
- Mutual of Omaha: $99 a month
These are at Preferred Plus health ratings, but even with lower ones like Preferred and Standard, the overall rates paid per month are cheaper than those offered by the AARP.
Extra Protection Term Life Insurance
Now let’s take a look at the AARP’s other option, Extra Protection Term Life Insurance. This is actually pretty similar to the Level Benefit option, but this one comes with more application requirements and offers up to $100,000 in coverage. Like Level Benefit, however, the rates do go up every five years.
So, here are some rate examples for AARP Extra Protection Term Life Insurance, for a $100,000 policy:
Male, ages 60 to 64: $129.92 owed each month
Male, ages 65 to 69: $174.92 owed each month
Male, ages 70 to 74: $258.92 owed each month
The average here is $187.91 spent monthly over a period of 15 years. As with the earlier example, you would end up saving a lot more money by going with a different insurance provider. In fact, you would pay anywhere between $45 and $155 a month among the insurance companies we work with, with your health being the main factor.
As you can see, AARP just isn’t very competitive as far as rates go, and this isn’t great for an organization that serves the primary purpose of helping out seniors (and we’re not the only ones who think so— check out this CBS article). The choice of what life insurance company you choose is ultimately yours of course, but know that with the AARP, you almost always end up paying more than you should.
If you’ve ever gotten high rates from AARP or another company, don’t assume that you can get an affordable life insurance plan. There are several options that you can choose from to get quality insurance coverage.
Getting Affordable Life Insurance Coverage
Because we want to provide you with all the information you need to get a cheap plan, we want to provide you with some of the most common tips we give to our clients to secure the cheapest coverage. Here is the advice we give to most of our applicants.
You need to compare dozens of quotes. For most applicants, AARP isn’t going to be the most affordable policy, which means that it’s important that you find a company that will give you cheaper rates.
If you’re an older applicant that’s looking for insurance protection, there are some companies that are going to give you much more affordable rates. You need to make sure when seeking the best insurance coverage to check out all of our available company reviews, we answer questions for you such as is Globe Life all its cracked up to be? or which companies offer a no medical exam policy.
Unless you want to go through the time-consuming process of getting quotes alone, the best way to gather the quotes is to join with an independent agency. If you contact a typical insurance agent, they can give you one quote from their company.
With us, we can offer you more than 30 quotes all at once.
The last tip we offer to our clients is to improve their health by quitting some bad habits. If you’re a smoker, we highly suggest quitting for at least one year before you apply for coverage. If you’re an older applicant who smokers, be prepared to pay a lot more for your plan.
Calculating Your Life Insurance Needs
Don’t buy life insurance without adding up your needs.
To start, begin by seeing how much your family would have to pay off. Your life insurance needs to be sizable enough to pay off your debts. Calculate all of your unpaid bills.
Once you have this number, you have your starting point. The next number you need to put in your life insurance equation is your paycheck. More specifically, several years worth of paychecks. Your policy is designed to replace your salary.
Every year our clients tell us stories about loved ones passing away and being left with debts. Don’t let you or your family become another one of these stories.
To learn more about your life insurance options as a senior, you can call us today at 888-552-6159 to get a customized quote and start your application. We’re here to answer all of your questions, and we want you to get the lowest rates possible.