AARP Life Insurance Review (2024) (2024)

New York Life, which underwrites AARP life insurance policies, is a trusted name in the industry. It features impressive third-party ratings, including an A++ from AM Best for financial stability, and a favorable complaint index score from the National Association of Insurance Commissioners (NAIC).

However, if it’s a priority for you to customize your coverage with riders or you need particularly high policy limits, AARP may not be right for you.

AARP membership is available to all individuals, regardless of age, and all members have access to select programs, services and discounts. When you turn 50, you gain access to life insurance through AARP. The online application process is easy, but it’s not available in all states or for all coverage levels.

Life insurance is a binding agreement between a policyholder and insurer. The policyholder makes premium payments while the insurer agrees to pay an agreed-upon fee to designated beneficiaries if the insured person dies while the policy is active. The premium costs and policy amounts vary depending on several factors, such as age, gender, health and lifestyle.

Once you understand life insurance basics, consider the following as you shop for a compatible policy:

• Choose the type: Term or whole life.
• Identify potential riders to customize the policy.
• Determine the amount of coverage and time you need it.
• Ensure competitive quotes are for the same coverage.
• Check each company’s financial health and customer ratings.

AARP Life Insurance offers term life and guaranteed issue whole life insurance policies.

Term Life Insurance

Term life insurance provides coverage for a limited amount of time, known as a term. These terms are generally between 10 and 30 years. If the insured person passes away during that period, the insurance company will pay the policy’s face value, or death benefit, to the named beneficiaries. When the term ends, the policy is no longer in force and the death benefit is forfeit.

Many companies offer term insurance policies, and you can see our top term life insurance providers here. AARP offers the following term life insurance plan:

Level Benefit Term Life Insurance: This policy is available to AARP members aged 50 to 74 and their spouses or partners aged 45 to 74. It lasts until the insured turns 80.

It offers coverage amounts from $10,000 to $150,000 when you apply online, except in Montana and New York, where the limit is $100,000 for online applications. If you want more than $150,000 in coverage, you must contact an agent to determine your eligibility.

AARP’s term life insurance policies do not require a medical exam. However, you will need to answer health questions that are used to determine your risk profile and premium when you apply.

AARP’s term life insurance has a built-in Guaranteed Exchange Option Rider. If you qualify you can convert an existing AARP term life insurance policy into permanent coverage when the term ends without taking a medical exam or answering any health questions.

One drawback with AARP term insurance is that premiums increase every five years.

Whole Life Insurance

Whole Life Insurance is a type of permanent life insurance that provides coverage for the insured person’s entire life as long as premiums are paid. Whole life policies also have a cash value component that term policies do not. Cash value functions as a savings or investment account that earns interest and can be borrowed against in certain situations.

AARP offers the following whole life insurance policy:

Guaranteed Acceptance Life Insurance: This permanent life insurance does not require a medical exam or health questions and provides up to $50,000 in coverage online. Higher face amounts may be available when you work through an agent. Applicants must be between 50 and 80 years old, and eligible spouses must be 45 to 80 years old, except in New York where the age limit is 75.

This guaranteed acceptance policy features level premiums. In most states, policyholders can stop making payments once the policy is considered paid up, typically 95 years old.

If the insured dies of natural causes during the first two years of the policy, beneficiaries receive only a portion of the death benefit. Typically this graded benefit is 110% of premiums paid in but varies based on state regulations. The full death benefit is available from the first day of coverage for an accidental death.

AARP Life Insurance Riders

Life insurance riders are optional add-ons that allow policyholders to customize base policies. AARP’s Term Rider Protect Plus program offers the following options.

• Term rider: This allows you to add an additional term life policy to your current life insurance policy. This strategy is called laddering and can provide extra coverage when it makes sense for your current situation. You can apply for additional coverage between $2,500 and your current coverage limit, with a maximum coverage amount of $150,000.
• Terminal illness rider: This add-on allows you to withdraw up to 50% of your death benefit if you are diagnosed with a qualifying illness and are given less than two years to live or one year in New York. Any value withdrawn is subtracted from the death benefit.
• Waiver of premium for nursing home stays: This rider applies if you live in a nursing home under doctor’s orders and for a qualified reason. It waives your life insurance premiums after you have been in the nursing home for 180 consecutive days.

Life insurance rates are competitively priced throughout the industry. While each insurer has its own methodology to arrive at policy costs, several factors are standard across the board. The premium you pay will normally depend on the following:

• Age
• Health and medical history
• Gender
• Lifestyle
• Policy type
• Coverage amount
• Credit standing

You must be an AARP member to apply for a life insurance policy, but since AARP membership costs $16 annually, this is not much of a barrier to the purchasing process. If you want to buy a policy, you can apply online, through the mail or by speaking with a licensed insurance agent.

New York Life ranked ninth among 21 companies surveyed in J.D. Power’s 2022 U.S. Individual Life Insurance Study, which measures overall customer satisfaction in annual statements and billing, customer interaction, policy offerings and price. Additionally, it receives below the average number of complaints expected for a company of its size, according to the NAIC.

In addition to closely following these third-party metrics for customer satisfaction, we read over 100 real customer reviews on reputable aggregators like the Better Business Bureau (BBB) and TrustPilot.

Many positive reviews praised the company for fast, helpful and empathetic agents and customer service.

“Always provides the best service and goes the extra length to answer your questions, regarded very highly!” —Gary C via BBB

“My father-in-law passed away recently and *** was his agent for many years. I had a few occasions to work with *** on a life insurance policy both before and after my father-in-law’s passing. He was extremely helpful and knowledgeable. He personally handled the claim and brought the account to settlement very quickly. I would highly recommend him for your insurance needs.” —AI O via BBB

Negative reviewers complained of misleading marketing and difficulty collecting death benefit payments.

“AARP is not what they say they are. They mislead people. Total scam if you ask me, they take advantage of elderly people and document incorrect data. I can’t believe they are worse than sub par service I am receiving from AARP. I am not alone, read the reviews! AARP needs to step up their service immediately.” —Linda via TrustPilot

“I don’t know why NYL has a good rating. It was almost impossible for me to leave a message to my claim manager, so I decided to email her. She became so angry when I did that. She told me that she set the phone answering system to not take any messages when she is busy. I guess that email leaves a trace.” —Tony via TrustPilot

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Through its New York Life partnership, AARP is one of the most stable insurers in America. Its whole life coverage with no medical exam is another plus, but they have limited death benefits during the first two years.

AARP and New York Life also make it easy to shop for policies with quotes and policy information that is easily accessible online. And you may be able to score discounts for other types of AARP insurance if you bundle life insurance with other offerings, but you’ll need to talk to AARP for details based on your unique needs.

Methodology: Our System for Ranking Life Insurance Companies

Our team researches and ranks life insurance companies using an in-depth scoring system that considers the factors most important to consumers like you. Our analysis includes a comprehensive review of each provider we feature based on available coverage, customizability, availability, customer service and company reputation. Here are the factors we take into consideration when rating life insurance providers:

• Brand trust (40%): Life insurance payouts can exceed $100,000 or more, which makes choosing a reputable and trustworthy insurance provider important. To assess brand trust, we use J.D. Power and Associates customer satisfaction surveys, AM Best credit rating scores and the National Association of Insurance Commissioners (NAIC) complaint index. The higher a company scores in each area, the more points it receives.
• Coverage (33%): The more policy options a life insurance company offers, the more opportunities you have to obtain the right coverage for your specific needs. For this reason, we give companies the most points for offering multiple types of life insurance, including various term, permanent and no-exam options.
• Availability and ease of use (19%): Since life insurance coverage options can be complex, we consider the ways a customer can reach a company — and how easy communication is. For this category, we research how many communication channels a company offers for general customer support, claims processing and the application process. Companies earn the most points for offering various ways to interact with an agent, both in-person and online.
• Riders (8%): Companies offering various life insurance riders or endorsem*nts allow policyholders to better customize their coverage. In this category, we determine how many riders a company offers and award the most points to providers with more than 10 options.

We use our rating system to compare and contrast each company against key factors to help us determine the best life insurance companies in the industry. To learn more, read ourfull life insurance methodologyfor reviewing and scoring providers.AM Best Disclaimer

Drew Gurley is a licensed life insurance expert with nearly 15 years of experience. During his career as both a licensed life insurance agent and industry executive, he has helped thousands of clients with their life insurance needs through his work at Redbird Advisors and Senior Market Advisors. When Drew isn’t working, he spends time with his family, supporting breast cancer and epilepsy awareness.

Mike Miller is a writer with a decade of experience producing product and service content to help consumers make informed purchasing decisions. Mike has a bachelor’s degree in creative advertising. In his spare time, Mike enjoys riding and fixing motorcycles, reading a good book and spending time with his wife and two cats.