AARP life insurance simply much more expensive

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I first posted about AARP’s high priced life insurance program two years ago. Has there been any reform to that profit mill taking advantage of seniors?  No.  AARP member options are only among the most expensive.

AARP now promotes “The AARP Life Insurance From New York Life” on a separate website.  It’s “exclusively for AARP members.” Their mission statement: “To help make it simpler for AARP members to apply for affordable life insurance protection, AARP selected New York Life to provide a life insurance program just for its members.”  (italics mine)

simple = more expensive

The AARP New York Life insurance web page has three choices, all of them no physical exam, i.e. paramed exam.  Simple.  Higher priced simplicity.

Are you in good, average or even slightly below average health?  Focus on fully underwritten life insurance requiring a paramed exam. It’s free, at home or wherever you choose at your convenience, takes about 20 minutes and saves you a considerable amount of money.

Best value in rapidly descending order:

  1. full underwriting:      paramed exam
  2. simplified issue:      no paramed exam
  3. guaranteed issue:   no health questions

Unsure if qualified for fully underwritten coverage?  Find out. You’d be surprised. Type 2 diabetics with good control can get standard rates. Always check first before applying. Even if a simplified issue product is advisable, shop around for the lowest prices. There are much better deals than those offered through AARP.

Doubly more expensive permanent

For example, $25,000 permanent coverage female 66 years old, monthly premiums

$70.00     Transamerica at preferred non-tobacco, GUL*, age 121
$74.00     Transamerica at standard non-tobacco, GUL*, age 121
$127.52    AARP Life Insurance program from New York Life, age 121

Why would an organization, supposedly acting in its members best interest, not promote fully underwritten life insurance options?  How about: ease of issue, faster turn around, lower labor costs, higher premiums, higher profits.

Term:  At your age?

Term is to replace lost income or to cover a debt like a mortgage. If there is a shorter duration need, term life insurance might be suitable, but generally retirees should get permanent life insurance for estate planning and final expenses, not term.  Outlive the term period, and there’s zero benefit.  If for some reason term is needed, get fully underwritten coverage. No physical exam term is much more expensive. The AARP program term rates are five-year age bands: e.g., 65-69, 70-74.  Tiered rate term insurance is an inferior product and much more expensive. Level premium term is the best. The rate is the same for the entire term period.

Please contact me for a free and confidential quote.  Many more options available.

sean's profile picLicensed Agent:  Sean Drummey
phone: (910) 328-0447
email: spdrummey@gmail.com

* Guaranteed Universal Life (GUL), also called no-lapse Guaranteed Universal Life, look for lifetime no-lapse guarantee level premium to age 120 or age 121; three major life carriers have GUL products starting at $25,000.

Product and carrier details:
Transamerica Life Insurance Company: “TransACE”
Genworth Life Insurance Company: “Colony Term”

quotes 6/14/2013, rates subject to change

Survivorship Universal Life: age 105 versus age 120

Protective Life is reintroducing their life insurance survivorship product “Protective Survivor UL” which will replace “Protective Centennial Survivor GUL”.

Survivorship, or second-to-die life insurance is for couples for estate planning purposes.  It is much less expensive than taking out two policies, and can provide coverage even if one of the couple has health problems and is uninsurable.  Guaranteed Universal Life is far less expensive than traditional whole life insurance.

Notable is the trend of certain carriers away from lifetime guarantees.  Though lifetime is available, Protective Survivor UL is competitive to age 105 and lesser ages.   Given the projected rise in the number of centenarians in the coming decades, selecting coverage to age 120 is advisable, since there are still multiple carriers like Prudential and American General that offer these lifetime guarantees at competitive rates.

Mail offers from United of Omaha for whole life insurance: why you should not return

Like everyone else I get mail pitching life insurance. United of Omaha last week mailed me an offer for “Easy Way” whole life insurance. Coverage is up to $10,000. No health exams.  Guaranteed acceptance. It took me a few minutes to find the key term tucked into the brochure as the last of 10 benefits. That’s the place where they got around to mentioning it was a graded death benefit.

 

During the first two policy years, if you die from natural causes (and cause other then accidental), your beneficiaries will received all premiums paid, plus 10%.  After two years, the full benefit is paid for death due to all causes.

 

Note: there is no life insurance benefit for 2 years, only money back plus interest, unless it’s an accidental death.

Easy acceptance is not the best life insurance. It’s the most expensive. Find your best option:

  • 1st choice:  Life insurance that requires a blood test.   Saves lots of money.  Called fully underwritten life insurance
  • 2nd choice:  Full and immediate benefit life insurance called simplified issue whole life
  • 3rd and last choice:  graded benefit life insurance, guaranteed issue

 

Guaranteed issue is only suitable when in extremely poor health, terminally ill or uninsurable because of a condition like AIDS.

 

Check first to see if you qualify for better coverage. Even if guaranteed issue is the only option, shop for the best premium.  There are many companies that offer graded benefit coverage besides United of Omaha.

 

Please contact me for a free and confidential quote.

sean's profile pic
Licensed Agent:  Sean Drummey
phone:  (910) 328-0447
email:    spdrummey@gmail.com

 

 

 

Carrier:
United of Omaha Life Insurance Company
a Mutual of Omaha Company