3 Things You Must Know About AARP Life Insurance For Seniors Before You Buy

Buying life insurance for the elderly can be a struggle when someone is facing their older years.  However their are solutions, such as AARP Life Insurance for seniors from New York Life.  This program offers 4 different types of policies from term policies that cover up to $100,000, to permanent life insurance, to guaranteed acceptance life insurance.

However before you consider any of these programs you may want know that their are some down sides to these policies offered through the AARP, and in this article I’m going to cover three things you should know before you decide to get involved.

Go With Term

2010-11-18_2241The first thing you should know as a senior is that at your age it’s much better if you go with a term policy versus a permanent policy, and their are a couple of reasons why this is.  First off, term is typically cheaper than a permanent policy.  In fact to prove my point a $50,000 permanent life insurance policy for a 65 year old male through the AARP will run around $287.

On the other hand a $50,000 term policy for a 65 year old male through the AARP will run around $144.  The difference in cost is around $143.  The reason for the cost difference is because the permanent policy through the AARP contains a cash value account which brings me to my next point.

Cash value life insurance is not worthwhile for seniors.  The reason for this is because cash value accounts are meant to help lower the cost of insurance for you over time.  For example, if you bought a life insurance policy at the age of 20 with a $100,000 death benefit and at age 60 you had $75,000 in the cash value account you would in essence only be paying for $25,000 worth of insurance because the first $75,000 would be paid up.

If you start a permanent policy at age 65 you are not going to have enough time to build up the cash value to see the advantage of lower insurance cost.  This is why I suggest term because with this type of policy your only paying for the cost of insurance.

Protection May Only Last So Long

Next, when it comes to the AARP term insurance programs the coverage may only last so long.  In fact with Level Benefit Term Insurance Program and the Extra Protection Term Insurance program  coverage will only last as long as age 80 at which point you will lose your benefit.

However with the permanent Life Insurance plan and the guaranteed acceptance plan you will be able to keep the life insurance as long as you want.

Premiums Will Increase Over Time

Finally, the last thing you should know about the AARP life insurance programs is that premiums may increase over time.  With the term programs through the AARP the premiums will typically start out a little lower and over will increase the older you get.

On the other hand the permanent and guaranteed acceptance polices will not change.  You should also know that the price you start at all depends on the three health questions that you answer.  However you won’t have to take a physical or blood draw but how you answer the questions could determine how much your premiums will increase.

In the end follow these tips I’ve covered and you should on your way to setting up a Life Insurance policy that fits your needs.

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  2. What are the specifics (premium and coverage) for a supplementary insurance to Medicare for my wife, 83 years old, and me, 85 years old. We both are in excellent health, living in Germany and would like to return to the USA. Of course we are American citizens.

    Please reply.

    Thank you
    Max J. Riedl

    P.S. The e-mail address is the one of our daughter where we are presently staying.

  3. Kirk,
    I don’t know what the three questions are. If I had to guess though I would have to say they would be just asking some general questions that ask if you smoke, to what kind of medical conditions do you currently have. If you want to know for sure contact a New York Life Insurance agent. They are the company that sells the policy through the AARP. They may be able to give you a more concrete answer.

  4. Three secret questions sounds like some kind of a scam. If those questions were so simple then they would not need to be a secret.

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  7. Good info but you haven’t yet answered about the ‘3 questions’ issue, why must the prices go up as we get older (and if there are ‘any’ companies who set the prices and ‘leave’ them as we grow older), why in some cases you’re only allowed to purchase $100,000 or more (rather than just $25,000 or even $50,000 worth for those who don’t need higher amounts)? Thanks.

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  9. My dad is 73 & the AARP life insurance says 74 is the cut off. I really want to know the the 3 questions they ask. If anyone knows (& I can’t believe know one has asked what they are) I’d sure like to know. Thank you.

  10. The three questions are probably something like this:
    1) Diagnosed, treated, or advised to seek treatment for alcohol or substance abuse?
    2) Ever been convicted of a felony or recently declared bankruptcy?
    3) Ever been diagnosed or treated for the following: cancer, chronic kidney disease, coronary artery disease, …. etc. (long list of possibly fatal diseases and conditions, including Alzheimer’s)
    4) Used Nicotine in the last X months?
    I know that is technically four questions, but the last answer will not disqualify you. It is used to determine the rate table premiums.
    It’s possible you will be asked about dangerous occupations or vocations too, like sky diving.
    Some answers may disqualify you.

  11. I see these posts are a little old, but just in case anyone else lookes here (I did!) I started an application online just to see what the questions were, and here they are….

    1. In the past 2 years have you had treatment 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?
    List date(s) of onset, along with types of treatment, medicine and dosage.

    2. 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?
    List date(s) of onset, along with types of treatment, medicine and dosage.

    3. In the past 3 months, have you consulted a doctor or had treatment or diagnostic tests of any type? (Note: You are not required to report negative AIDS or HIV tests.)

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