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Typically, AARP final expense policies are term life insurance plans.
See the tables below for rates by age for all AARP life insurance options, including term, whole life, and guaranteed acceptance policies.
AARP term life insurance is priced using a bracket system. You’ll start by paying the rate of whichever age bracket you fall into. Your premium will increase as you enter a new bracket. Once you turn 70, you enter the final age bracket and will continue paying that price until age 80.
On your 80th birthday, the policy terminates, and you don’t get your money back. You’d simply be uninsured. If you want life insurance over 80, you’ll have to go out and buy a policy from another company.
Female monthly rates
Male monthly rates
In addition to term life insurance, AARP offers a standard whole life policy and a guaranteed acceptance whole life option.
The standard whole life plan has health questions (no exam required); if approved, there is no waiting period.
The guaranteed acceptance whole life policy has no health questions or medical exams. Since there are no health questions, there is a two-year waiting period for natural causes of death. That means that if you die in the first two years from anything other than an accident, AARP will only refund 110% of your premiums.
AARP whole life insurance rates are much higher than term life because term life expires. In contrast, whole life lasts forever, so naturally, it costs more than term coverage.
The bottom line is that you can get better offers from other carriers.
If you need term life insurance, here’s what you can get from other providers:
- Locked-in premiums that remain level (AARP term life rates increase every five years)
- Lower monthly prices
If you need burial life insurance, here’s what you can get from other providers:
- Lower prices
- Much better chance of securing coverage with no waiting period
- More favorable underwriting that will not cause a denial due to pre-existing conditions
Let’s use a 65-year male and female example and compare AARP to Mutual of Omaha for a $10,000 whole life policy.
AARP would charge her $49 monthly and $66 for a male. On the other hand, Mutual of Omaha would charge her $41, and the male would pay $56. Whether you need term or whole life, check out Mutual of Omaha life insurance for seniors for some of the best burial insurance rates.
AARP is similar to Colonial Penn and the Lincoln Heritage Funeral Advantage program. Yes, they all make it relatively easy to obtain coverage, but it comes at the cost of higher prices and often with a two-year waiting period.
For an AARP term policy, the monthly cost of a $25,000 policy will be $18 for a 50-year-old female and $26 for a 50-year male. The exact price is determined by age, gender, tobacco usage, state of residence, health, and the face amount. Also, AARP term life insurance uses an age bracket system. For example, seniors 50-54 pay the same price. Lastly, their term rates increase every five years until the policy terminates on your 80th birthday.
Generally, AARP is not the best company that provides final expense insurance. That’s because their rates are higher than many other companies, and they impose a two-year waiting period that is uncommon elsewhere. The best burial insurance company is typically Mutual of Omaha due to their low premiums and because they’re very accepting of seniors’ health issues.
AARP term life insurance ends at age 80. If you outlive the policy, you don’t get your money back, and you’d be uninsured. You’d have to find another way to pay for a funeral. At 80 years old, you can buy a policy from another company, but the price will be much higher due to your age. Not to mention, your health could severely affect the cost and your eligibility.
The primary good element of AARP term life insurance is that the coverage options are low (minimum of $10K). Most term providers don’t offer term insurance at that low of a face amount. However, the drawbacks are that the prices rise every five years, whereas you could get cheaper rates with a fixed premium with many other life insurance companies.
One is not better than the other. It depends on why you need life insurance. In short, only buy term life insurance to cover a temporary need such as paying off a debt or replacing your income so your dependents can afford to live. However, you should buy whole life to cover a permanent need such as paying for funeral expenses. When shopping for life insurance, it’s critical to consider all the variables. Don’t focus on the cost alone.