Pros Explained
- No-med-exam term and whole life policies: AARP offers term and whole life insurance without a medical exam, which can make it easier to get approved for coverage if you have pre-existing conditions.
- Policies are underwritten by New York Life: All of AARP’s life insurance policies are issued by New York Life, which receives an A++ (Superior) financial strength rating from AM Best. This is the agency’s highest rating; only nine of the 91 life insurance companies we reviewed received a rating this high.
- Online application available: You can apply for term and whole life coverage directly online without contacting an agent. But you will need to supply your personal information (name, address, and email) to get a quote.
Cons Explained
- Few riders: If you want to personalize your life insurance policy, AARP might not be the best choice. AARP offers fewer riders than many of the top life insurance providers we reviewed.
- Low coverage limits: AARP’s life insurance policies have low coverage limits—$150,000 for term policies and $50,000 for whole life. You’ll need to purchase a policy directly through New York Life, which means contacting an agent if you need more coverage.
- Only available for AARP members: To purchase life insurance through AARP, you must have an active membership, which charges an annual fee. And because the minimum age to join AARP is 50, younger people are not eligible for coverage.
Complaint Index
According to data from the National Association of Insurance Commissioners (NAIC), New York Life, the underwriter of AARP’s life insurance policies, has far fewer complaints than expected for its size.
The NAIC publishes a complaint index that measures how many complaints a company gets, relative to its size. Companies with a number of complaints expected for their size have an index of 1.0. Companies with more complaints than expected have an index above 1.0 and companies with fewer complaints than expected have an index below 1.0. The lower the index, the fewer complaints a company receives.
New York Life’s three-year average complaint index is 0.18, which means it has far fewer complaints than expected based on its size. Out of the 91 life insurance companies we reviewed, New York Life has one of the lowest complaint indexes.
Third-Party Ratings
AARP Life Insurance is not rated by third-party organizations, but New York Life has good ratings, especially when it comes to financial stability. New York Life has an A++ financial strength rating from AM Best, which is the highest grade possible and indicates a superior ability to honor its ongoing insurance obligations like claims.
However, New York Life doesn’t do as well in regard to customer satisfaction. It was rated just above average for overall customer satisfaction in J.D. Power’s 2022 U.S. Individual Life Insurance Study, coming in 10th out of 22 insurance companies; it scored 775 out of a possible 1,000 points, just one point higher than the industry average of 774.
Policies Available
There are only a handful of life insurance policies available through the AARP Life Insurance Program. Here’s a closer look at the policies you can purchase:
Term Life Insurance
Term life insurance offers temporary coverage for a period of years, such as 10. It has level premiums and a guaranteed death benefit. Unlike permanent life insurance policies, term life insurance usually does not have a cash value component. It’s also cheaper than permanent life insurance, but the premiums get more expensive with age.
With AARP’s Level Benefit Term Life Insurance policy, you can choose coverage limits between $10,000 and $150,000. This policy doesn’t require a medical exam and approval may be immediate. With the built-in Guaranteed Exchange Option, you can convert your term coverage into a permanent policy when the term ends, also without taking a medical exam. AARP members between the ages of 50 and 74 are eligible to apply, and you can keep this insurance until you reach 80 years old.
Final Expense Whole Life Insurance
AARP offers relatively small whole life insurance policies that are often used to cover end-of-life expenses, such as funeral arrangements, final medical bills, and unpaid debt. Life insurance premiums remain fixed over the duration of the policy, and there is a guaranteed death benefit and a cash value, as long as you pay the premiums.
AARP makes two different final expense policies available. Neither requires a medical exam and you can apply for both online. One asks a few medical questions and offers up to $50,000 in coverage. The other is a guaranteed acceptance life insurance policy—no medical questions are asked and coverage is guaranteed, but it is limited to $25,000. Benefits within the first two years are also limited. If you pass away during that period, your beneficiary will not receive the full death benefit. Guaranteed issue policies tend to be very expensive relative to other types of coverage.
Available Riders
Life insurance riders are endorsem*nts that can extend or expand your coverage. AARP doesn’t offer much in the way of riders, but it does make the following benefits available:
- Term rider: When you add the Term Rider Protect Plus, it raises your coverage limits for a specified period of time. You can apply for any amount of coverage between $2,500 and your current coverage limit, as long as your total coverage doesn’t exceed $150,000. The coverage will last until you turn 80. If you need coverage past age 80, you have the option to convert the rider into one of AARP’s permanent life insurance policies.
- Waiver of premium for nursing home stays rider: Another feature of the Term Rider Protect Plus is a waiver of premium rider, specifically for nursing home stays. If a doctor determines that you must stay in a nursing home, this rider will waive your life insurance premiums after you have been in the nursing home for 180 days consecutively.
- Terminal illness rider: This accelerated benefit rider (ABR) is included in all of AARP’s policies. If you get diagnosed with a terminal illness and are given less than 24 months to live, the rider allows you to receive a portion of the death benefit early (some riders may only trigger if you have less than 12 months to live). The rider is only available on guaranteed issue policies after the first two years of coverage.
Customer Service
To contact the AARP Life Insurance Program, you can call the toll-free customer service number at (800) 607-6957. The company’s business hours are Monday through Friday from 8 a.m. to 8 p.m. EST. You can also call New York Life directly at (800) 288-9858 between 8 a.m. and 8 p.m. if you have questions about applying for coverage through AARP.
Through AARP’s online customer service center, you can make payments, manage your beneficiaries, download policy documents, and more. You can also file life insurance claims online and access all the required documents electronically.
Final Verdict
AARP members can enjoy a simple application process through AARP's Life Insurance Program. With no medical exam requirements, an easy online application process, and only a couple of simple policies to choose from, AARP Life Insurance is worth considering for those who are shopping for a small life insurance policy. However, if you want to customize your policy with additional riders, require more than a low amount of coverage, or simply aren't interested in paying for an AARP membership, you may want to consider other life insurance options.
Frequently Asked Questions
How Much Does AARP Life Insurance Pay Out?
AARP Life Insurance coverage depends on the policy you choose. Level Benefit Term Life Insurance offers protection between $10,000 and $150,000, while Permanent Life Insurance offers up to $50,000 in protection.
Can I Cash Out My AARP Life Insurance?
Yes, you can cash out your AARP life insurance. A portion of your permanent life insurance premium payments will go toward cash value that will eventually grow to be tax-deferred. You can then take a loan against your accumulated cash value to help with an unexpected expense. However, if you pass away before you finish paying back the loan, the loan amount and any interest due will be deducted from the death benefit.
Does AARP Life Insurance Increase With Age?
Yes, term life insurance premiums typically increase as you grow older. As with most types of insurance, the higher the risk for the insurance company, the higher your premium costs will be. AARP's term life insurance rates will rise as you enter each new five-year age bracket. Rates for AARP's permanent life insurance are guaranteed to stay the same over the life of the policy, but this means they're typically higher than the costs for term life insurance.
Are There Any Death Benefits for AARP Members?
AARP members are eligible to apply for AARP's Life Insurance Program. Since only members can apply, there are no additional benefits at the time of death for AARP members. However, AARP membership does grant survivors access to an online grief community and resources from experts on grief and loss.
Methodology
We designed a comprehensive ranking methodology based on consumer priorities and life insurance company fundamentals to rank more than 90 insurers across five general categories: financial stability, customer satisfaction, product and feature variety, the overall buying experience, and cost.
In order to do this, we collected over 5,000 data points and scored each company based on 55 metrics. We grouped metrics by category to see how insurers performed in each; we then weighted category scores to determine how companies performed overall.
To learn more, read our full Life Insurance Methodology.
