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I recently applied for and received an AARP Group term life policy underwritten by New York Life. In previous posts I believe I’ve clearly made the point that these AARP offerings are a rip off of the sleaziest form, claiming to be advocates of the elderly while fleecing them.

I actually applied for their term insurance policy and their whole life policy, $50,000 each. They never responded to the application for whole life insurance, but I see in the term policy where it states that the maximum I can have through AARP’s life insurance program is $50,000. So much for getting adequate coverage and diversifying in the process.

I received the new term insurance policy a few days ago and after reviewing it, had some questions. Attached is my policy.

Note on page 4 where it says Premium, it explains that my premium will be going up each time I reach one of their 5 year thresholds. It also goes on to say that they can, of course, change my rates at any time as long as they change the rates of all policies in my class. A couple of questions came to mind. If my premium goes up every 5 years, how much does it go up? And, if my premium can be changed on a class basis, what defines a class?

Looking through the rest of the policy, the only reference I found to my premium level was on the copy of the application at the back of the policy. It is attached here.

In the upper left it breaks down the premiums depending on the size of policy and at the bottom of that box it says “Please refer to the rate chart for complete details”. There is no rate chart in the policy. There is nowhere in the policy that it spells out or illustrates what happens every 5 years.

I called the Colorado Division of Insurance and asked them if, even though this is a group policy, it should contain that type of information. Their answer was yes. The person I spoke to was very clear that if a policy doesn’t provide a table of maximum premiums, an illustration that shows how much they could potentially charge, it was not in compliance.

Taking them at their word I called New York Life to see if that information had been inadvertently left out of my policy. They assured me that the information was not there because it didn’t need to be there. When I pushed further about wanting something in my policy, per Colorado law, that shows what the rates increases could potentially be, Lucille from New York Life told me that she was willing to give them to me verbally over the phone, but that she couldn’t send them to me. She then explained that the rate increases were shown on the application, but that portion of the application is not included in the policy.

I then spoke to her supervisor Donald Ennis and reviewed all my concerns. He said that the illustration of rate changes is only contained in the master policy and that is held by AARP and that I should call AARP if I wanted a copy of that information. This morning I spent an hour in the quagmire that is the AARP phone system and was finally told that AARP doesn’t have a master policy and that they would refer my question back to New York Life.

Advocates for the elderly? I’m a 55 year old life insurance agent and I wouldn’t advise anyone to accept the AARP policy. The policy, the company and the organization backing it are all wholly inadequate at providing the information you should expect in order to put your trust in them. If I can’t put my faith in what they’ve provided and I can’t get the answers to questions I ask, how could the average person (non life insurance agent) hope to enter into one of these contracts with confidence. The answer appears to be that AARP and New York Life hope you will do it with blissful ignorance. “Trust us! We’ve been around for 160 years.”

Bottom line. Intentionally vague would be the only grade I could give to my AARP life insurance policy. It won’t go into force because it is overpriced, not guaranteed and missing key valuable information.