AARP Funeral Insurance Review for 2021

  • Post author:
  • Post last modified:August 12, 2021

Before we discuss the funeral insurance plans of AARP, you need to know about this organization.

AARP is a non-profit, social welfare, and nonpartisan organization with 38 million members.

The aim of this organization is to help people achieve their dreams and goals, fight against discrimination in the community, protect seniors, and strengthen communities.

This organization is working to help people above 50 by giving them opportunities to contribute to local communities and society. They are helping them to fulfill their financial needs.

When it comes to AARP’s funeral insurance policies, New York Life is the supplier of this plan.

New York Life pays AARP to sell insurance policies to its members.

Hence, AARP is an interest-based group that guides and empowers people, but not an insurance company.

AARP Review

What Type of Funeral Insurance Does AARP Offer?

There are three final expenses insurance policies that AARP offers to seniors, which are:

  • Guaranteed Issue Whole Life Insurance
  • Simplified Issue Whole Life Insurance
  • Level Death Benefit Term Life Insurance

Each of these plans has its own terms and policies. Additionally, not every older adult is eligible for all three options.

AARP offers you a plan depending on your age, health, and location. The best part of these policies is that they pay you a tax-free death benefit that goes directly to your chosen beneficiary.

They can use this money for any purpose and need, whether it’s your funeral expenses, health care expenditures, mortgage, debt, or child’s education cost.

Level Death Benefit Term Life Insurance

Just like Open Care final expense insurance, this AARP policy is to help seniors save money for end-of-life expenses.

However, to apply for this insurance, you should be between 50 and 75 years. The best part of this insurance is that your spouse can also enroll in this insurance plan if they age between 45 and 74.

The face amount you and your spouse will get separately is between $10,000 and $100,000, depending on your chosen premiums.

This death benefit is a great amount that you can leave for your family so that they don’t have to face financial problems.

The level death benefit term life instance is available in all 50 states. The primary reason why people choose this life insurance is you don’t need to go through the extensive and complex process of application.

You also don’t need to wait for months to determine whether you are selected for the insurance. Apart from this, AARP doesn’t ask for any criminal record review.

Plus, you will not be penalized for chewing or smoking tobacco, which most insurance organizations force you to do.

The only drawback of purchasing this policy is that you have to pay for AARP monthly membership fees that make this insurance policy unattractive to most people.

Advantages of Term Life Insurance

advantages of AARP funeral insurance

A term life insurance is great for seniors in several ways. Here is what you need to know.

  • No Medical Exam

This policy doesn’t require any medical exam. This means you don’t have to visit clinics for tests and medical appointments to give proof of your health.

But they may ask you a few health questions. The answers will determine the acceptance of your application.

  • Designed for Seniors

When it comes to insurance policies, seniors struggle a lot to find the best and appropriate policy for them.

Most insurance providers don’t provide insurance to older adults because of their age and health. But you don’t need to worry because AARP offers you a term insurance plan till the age of 75.

  • Higher Coverage

Paying for the funeral or medical expenditures can be challenging for a family that doesn’t have any savings or an excellent source of income.

This is why AARP’s term life insurance allows you to choose a policy that can give you $10,000 to $100,000 protection.

Disadvantages of Term Life Insurance

While offering plenty of benefits to seniors, this policy also has some drawbacks. Let’s discuss them.

  • Expiring Coverage

This is a coverage that completely expires when you turn 80. This is because it is a term life insurance, which means it gets terminated after a certain period of life.

So, after the age of 80, you will not have this coverage. Unfortunately, you will not receive any money or even the premiums you have paid.

  • Less Coverage Time

As you are no longer protected after 80, you need to find a new insurance policy for yourself.

At this age, you don’t have options to choose term policy. The only thing you can do is to purchase a whole life policy from AARP or other insurance providers.

  • Higher Premiums

The premiums of their term life insurance don’t remain the same.

They can increase every five years, forcing you to pay a much higher amount than you have chosen.

How Does AARP Select Applicants?

For selection, you need to pass a prescription history check, MIB check and answer three health questions.

The following are the health questions that you need to answer. If your answer to any of these is yes, you will not get approval.

  • Have you taken medication or treatment for stroke, heart problems, lung disease, cancer, diabetes, kidney or liver disease, AIDS-related complex, or AIDS?
  • In the past two years, have you been confined or admitted to a nursing home, hospital, or treatment facility?
  • In the last three months, have you taken treatment or consulted a health provider?

Not to mention, if your MIB file or medication history shows any treatment for the mentioned health conditions, they will reject you.

Simplified Issue AARP Whole Life Insurance

This is another AARP plan that you can choose in order to plan for end-of-life expenses.

If we look at the simplified issue of whole life insurance, you have a comparatively lower face amount than term life insurance.

This insurance plan gives you coverage of around $5,000-$50,000, depending on the premium and plan you have chosen.

It is available to all seniors between the age limit of 50 and 80. Your spouse can also apply for the same insurance policy if they are between 45 and 80 years of age.

Like the term insurance plan, you can apply for whole life insurance no matter which state you live in. Unfortunately, again, you have to pay for the monthly membership fees of AARP if you want this insurance plan.

You also need to know that whole life insurance is mostly available for people who request it.

This means you have to specially ask for this insurance from their agents.

Advantages of Whole Life Insurance

The whole life insurance is relatively an excellent policy whether you purchase it from AARP or other insurance providers. The primary reason for this is it doesn’t have any “term.”

Read more to understand its benefits.

  • No Waiting Period

The biggest advantage of this policy is that it doesn’t have any waiting period.

This means that if you die, your beneficiaries will get the death benefit. You can also use this money in case of an emergency in your life.

  • Premiums Don’t Increase

AARP has offered a solution to your problem by designing an insurance policy with steady premiums.

This means you have to pay the same premiums throughout the insurance policy.

  • No Expiration Period

Anyone between the ages of 50 and 80 can purchase this policy. But your insurance doesn’t get expired after 80.

Hence, it has no expiration date, and your money is fully secured and protected.

Disadvantages of Whole Life Insurance

disadvantages of AARP

Although whole life insurance is the best plan a senior can purchase, it also has some drawbacks that make it inaccessible for some people.

Here is what you need to know.

  • Higher Premiums

This is true that your premiums will never increase in your life. But you also need to know that the premiums are higher and unaffordable for some people.

This is the cost you need to pay for lifetime coverage.

  • Only Healthy People Are Eligible

Not every senior is eligible for this insurance policy. In other words, people with health conditions can’t purchase this insurance.

If you have the following health conditions, you will simply not qualify for burial insurance.

    • Lung issues like COPD, asthma, chronic bronchitis, or emphysema
    • Diabetes requiring insulin
    • Seizure issues
    • Kidney or liver issues
    • Rheumatoid arthritis
    • Systemic lupus
    • A Complication of diabetes such as neuropathy or retinopathy
    • Parkinson’s diseases
  • Prescription Test Restriction

To buy this whole life insurance, you need to qualify for the prescription test.

If the company notices any leads of the health conditions, you will not get the insurance.

How Does AARP Approve Applicants for This Plan?

If you want to purchase whole life insurance, your answer to the following questions should be a “NO.”

  • Have you taken medication or treatment for stroke, cancer, heart problems, lung disease, immune system disorder, AIDS, kidney diseases, liver diseases, diabetes, and AIDS-related complex?
  • Have you been confined and admitted to a nursing home, hospital, treatment family, or extended care?
  • Have you taken treatment or medication, consulted a doctor, or been diagnosed with any health problem?

Apart from these questions, the company will also verify your MIB file and medication history.

If they notice any of the health problems in these records, they will reject you.

AARP Guaranteed Life Insurance

AARP guaranteed

This is the last policy that AARP offers to its members. The guaranteed life insurance offers you a face value of about $2,500-$50,000, which depends on your premiums.

This death benefit is enough for people who only want to cover the funeral and medical expenses. It also allows seniors between 50 and 80 to plan for their end-of-life expenditures.

Like other insurance policies, AARP allows your spouse to purchase their insurance if they are between 45 and 80.

Unfortunately, a guaranteed plan is not available for older adults that live in WA and NJ.

You also need to pay for the AARP membership fees if you want to purchase this insurance plan. As it is guaranteed life insurance, the death benefit will never decrease.

Hence, your beneficiaries will get the money without any deductions if you die after two years of the agreement.

In case you die because of any accidental reasons, the company will pay the full death benefit to your beneficiary before the waiting period.

However, if you die because of any natural cause before two years of the waiting period, New York Life will only pay 125% of the premiums that you have paid until that point.

Still, you need to understand that it is a great amount and no insurance company will give you this much return.

On the other hand, after two years of the waiting period, you get full coverage for the whole life.

You also need to know that if you become terminally ill, you will receive 50% of your death benefit in your life to cover your medical expenses.

Advantages of the Guaranteed Life Insurance

Let’s discuss some advantages of purchasing the guaranteed life insurance.

  • No Health Questions

The best part of this life insurance is that you don’t need to answer any health questions.

You can also apply for this insurance without going through medical checkups and tests.

  • Fixed Death Benefit

Unlike other insurance policies, the death benefits will never decrease.

Since it’s guaranteed insurance, you will get your chosen coverage even if you die decades after purchasing the plan.

  • No Expiration Date

The policy will not expire at any age. In this case, if you live more than 80 years, the insurance will remain the same.

Disadvantages of the Guaranteed Life Insurance

There are a few disadvantages of this life insurance, but they can lead to problems for some people.

Here is what you need to know.

  • Waiting Period

This insurance coverage is only effective after two years of the waiting period. Your beneficiaries can’t claim the full amount if you die during the waiting period.

  • Expensive

AARP’s guaranteed life insurance is expensive. This means you need to pay higher premiums to get guaranteed coverage.

  • Age Limit

Guaranteed life insurance is available for anyone aged 40 or above. However, seniors who are above 80 can’t apply for this insurance plan.

This means they have to look for other insurance providers.

How AARP Accepts Applicants for This Plan?

If you have poor health and you want to cover the final expenses, then guaranteed life insurance is best for you.

There will be no medical exam and health questions. The application process is simple and straightforward.

You only need to meet the age limit to apply for the insurance plan.

Bottom Line

AARP funeral insurance helps its members to purchase an insurance policy that can give them peace of mind. This organization helps seniors to live a less stressful and happy life.

You can get rid of your worries about final expenses by purchasing any of the three mentioned AARP policies.

This way, you can secure and protect your loved ones even when you will not be around to support them.

Linda Chavez

I'm a burial & senior life insurance expert, independent agent, Founder & CEO of Seniors Life Insurance Finder. I have been working in this sector since 2004 and established my own company in 2014. I have a team of seven members, and we are trying hard to share the knowledge we've gathered. We know how difficult often it is to find an affordable policy. Hence, we are doing our best to help you.