If it wasn’t just plain sick the way AARP treats it’s members, it might be laughable. AARP holds itself out as an advocate for just about everything for us seniors. In fact they are so excited about being able to be an advocate for you that they start working on you to join well before you reach your golden years (over 50).
Just when you think they are getting serious about offering valuable advice like their “No-guff guide to rude relatives” in their latest magazine issue, you open the magazine and run smack into a full page ad for their group life insurance. I’ve attached a copy so we can all be on the same page. Read the disclaimer right below their quotes and tell me about the warm fuzzy feeling it gives you.
Let’s cut right to the chase. Unless you have some reason to want too little life insurance for too much money, some comparison shopping is in line. First, let’s come to grips with the fact that $10,000 or $20,000 worth of life insurance between ages 45 and 60 is simply unnecessary when we’re talking about term insurance. That is burial insurance amounts and people shouldn’t buy burial insurance with term unless they are planning to die fairly soon. So, while still not likely to be enough, we’ll do our comparison at $50,000.
AARP’s term insurance, underwritten by New York Life (they should be ashamed too) is a 5 year renewable term. That means that every 5 years the price is going to go up and while the first few times might not be too bad, when you get to 65 or 70, the prices will likely lead to you dropping the coverage. Even if you hang in there with the rapidly rising prices, the insurance ends at age 80. Of course we all know hardly anyone lives past 80, so that’s hardly even worth fussing about.
I will compare their products with the best standard rate (most will qualify for better than standard) guaranteed level 30 year term available. The prices I quote will also contain a conversion option that will allow coverage to go on to age 100 if you want. The conversion will be at a higher price, but remember that you don’t have that option with AARP and your premium will be level for 20 years, unlike AARP.
So, here are the $50,000 quotes (monthly rates) from their attached ad.
Age 45-49 female $28.67, male $41.08
Age 50-54 female $36.29, male $51.04
Age 55-59 female $55.92, male $74.58
Compared to the best standard rates on the market.
Age 49 female $17.94, male $23.76
Age 54 female $22.71, male $31.89
Age 59 female $34.91, male $52.02
So, what’s the difference? Well, to get the better rates you have to take an exam. That’s at no cost to you and can be done at your home or workplace. And remember, I quoted standard rates. Those quotes will generally be high for the age groups that AARP advertised. A person in good, not perfect but good, health could easily be looking at rates half of what I quoted.
Bottom line. If AARP really cared about their members they would be writing articles about how to get the best life insurance rates possible instead of telling you about rude relatives.
An interesting expose. I know AARP has a lot of products it hawks but I never really examined the value of them.
I bought an insurance policy from aarp. I paid about $3,000 in premiums. Last month I got a notice that my premium had doubled due to my age. I called aarp and they referred me to Ny Life. I complained about the increase. I told the person on the phone about their claim that my cost would not go up etc. This snotty young man told me bluntly that was not the policy I had. I checked the policy and sure enoough in very fine print was a note of increase due to age at renewal. When I told him I intended to notify my bank to not take out automatic payment, he said that he already cancelled the policy and he notified the bank. End of conversation, end of policy, loss of 10 years of payment.