Reasons to Pick AARP’s Whole Life Insurance Policy
The American Association of Retired Persons or AARP, is a non-profit organization committed to bettering the lives of its members at local, state, and national levels. It offers life insurance policies underwritten by New York Life Insurance Company. AARP provides applicants with fast approval of policies without having to undergo a number of health tests. If you are intrigued, here is more about the whole life insurance policies and more available to AARP members.
AARP Whole Life Insurance
AARP’s Whole Life Insurance is available for member individuals between the ages of 50 to 80 years and their spouses aged 45 to 80. The policy comes with lifetime coverage of up to $50,000, with the annual premium being level throughout the years. One can get increased coverage if they call New York Life instead of applying online. The exact monthly premium varies depending on the age of the applicant and a few other factors. Once the company has labeled the policy as paid-up (typically when the individual reaches 95 years of age), one does not have to pay any further premium.
It is beneficial to policyholders as while the initial rates may be higher in totality for AARP whole life insurance, the rates to be paid in entirety remain fixed.
How does it work?
AARP’s whole life insurance includes an additional savings component known as cash value. This is in addition to the death benefit included with the plan. The cash value component accrues interest tax-free. After a certain period, the policyholder can apply for fund withdrawal or apply for a loan against the policy in case of unexpected expenses. The death benefits can range from $5000 to $50,000 for policyholders aged 50 to 80 years. This means the coverage provides sufficient cover to manage end-of-life expenses without having to worry. However, if the policyholder has any debts or mortgages under their name, this policy won’t help take care of it. Aside from the above benefits, AARP’s whole life insurance policy comes with two riders:
Accelerated death benefit
Under this rider, the policyholder is eligible to make use of as much as 50% of their death benefit if they are diagnosed with a terminal illness and have a life expectancy of 24 months or less.
Premium waiver
Policyholders that have to live in an assisted living facility for 180 consecutive days owing to an illness or disability can be exempted from premium payment. The length of the stay, post that, does not matter, and the individual does not have to make any further payments for full coverage.
AARP Guaranteed Acceptance Whole Life Policy
Members of the American Association of Retired Persons (AARP) who are 50 to 80 years old, as well as their spouses who are 45 to 80 years old, are eligible for AARP’s guaranteed acceptance whole life insurance policy. A guaranteed acceptance is promised to the applicants without a health checkup; however, there are some downsides to note. For starters, coverage for this policy is capped at $25,000. Aside from that, if the policyholder passes away within two years due to natural causes, their beneficiary receives only a part of the death benefits. On the other hand, accidental deaths result in the full benefits being paid out from the first day of coverage.
A drawback to most of AARP’s life insurance policies is that their premiums are priced higher than most insurance policies by other providers. But if you are a member of the organization and have pre-existing conditions, then the lack of a health checkup and quick approval and excellent draws to keep in mind.
AARP Whole Life Policy for Children
The AARP Young Start Program is a whole life policy insurance for children and is a rider for the main whole life insurance plan for members of the organization. The offer is open to AARP members who want to have their children or grandchildren insured. However, they need to be below the age of 18 to qualify.
Like seniors looking to take an AARP insurance plan, juniors are not required to undergo any medical tests to get their policy application approved. The coverage provided is at three levels of $10,000, $15,000, and $20,000 and this plan is not included with other AARP programs; it is available as a rider to customize one’s policy. AARP’s Young Start Program mainly ensures that parents and relatives of the child do not have to bear the associated costs if their charge passes away early. Additionally, if the original policy’s applicant passes away, the child or grandchild won’t have to continue paying premiums to maintain coverage till they turn 21. Once they turn 21, premiums will be set according to the initial coverage purchased. The low cost whole life insurance policy for children has a minimal monthly premium ranging from $5 to $10 a month. However, it builds cash value at a very slow pace and is available for the child or grandchild should they choose to access it.
It is prudent to note that the above-mentioned policies are only available to AARP members. Membership to the organization can cost upward of $12 on an annual basis. That being said, AARP’s whole life insurance is a great option if one has pre-existing health conditions. Aside from this, and their low cost life insurance for children, people can also choose a term life insurance plan. However, with this policyholders stand the risk of increasing premium costs every few years.
