I promised myself and my wife that I would try to remain calm about my opinions, even when my face is turning red, but AARP, the advocate for us old folks, is plain and simple giving bad life insurance advice. And frankly, giving bad advice if you are holding yourself out as an advocate is oxymoronic, and wrong.
AARP has been in bed with New York Life forever. New York Life is an overpriced cash cow of a company. I am thinking that if they wanted to, New York Life could actually afford to give away all the little policies through AARP, although why do that when they can instead rip off the elderly and become an even fatter cash cow.
Because the New York Life policies are absolute junk and overpriced, I have believed for some time that the only possible reason AARP advocates the products is that they must get some kind of a kick back each time someone signs up.
And so why do I think the policies are so bad? Remember that AARP is all of us folks over 50. Most of the people that actually buy into the policy are over 60. The average life expectancy of someone in their 60’s who is healthy is their mid 80’s. The term policy that New York Life provides for AARP is a five year renewable term. That means that the price will increase every five years……until age 80 when the coverage ends. You heard me right. If you turn 81 you don’t have life insurance. What are New York Life and AARP missing here? They are selling a product that is overpriced, increases in price every five years and ends before the average person needs it.
They also offer a whole life policy. This an overpriced simplified issue whole life policy whose selling point is that it “can help build up a survivor’s nest egg…tide a beneficiary over until Social Security or pension benefits begin…or pay final expenses and funeral costs” according to AARP. Then they go on to say “Rates are not guaranteed”.
AARP is supposed to be an advocate for folks on fixed income. So, they offer a term insurance product that increases every five years and a whole life product that doesn’t have a guaranteed price at all.
My opinion and this is just my opinion as a member of AARP, is that New York Life and AARP aren’t missing anything. They intentionally advocate products that will make a lot of money and not pay out many benefits for the sake of profit. If there is a better explanation, I am certainly willing to hear it.
Bottom line. Just because a group claims to be an advocate for you, don’t take what they say at face value. Do your homework on their advice. Get a second opinion from an independent agent .
This post is somewhat dated. Life insurance underwriting is changing and evolving continually. For more updated information check out some of the key word links. If you have a specific question or topic you need information for do a search. If you don’t find the answers you need contact me and we’ll make sure you get the information that is important to you.