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If you are a member of AARP, or considering becoming one, then you can buy AARP Life Insurance. AARP offers life insurance through New York Life, an insurance company that has been providing insurance since 1845. Here we will review the different AARP Life Insurance plans as well as the annuity option.
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AARP is an acronym for the American Association of Retired Persons. You can become a member once you turn 50-years-old. AARP provides its members with a variety of benefits and discounts for things such as life insurance as well as car insurance, home insurance, annuities, and credit cards.
Through AARP life insurance, you can buy either term life insurance or permanent life insurance to take care of your beneficiaries. You can also purchase an immediate annuity to take care of your income while you are still living.
AARP Life Insurance Review: Deciding Between Term or Permanent Coverage
Term life insurance is a popular life insurance policy because it is less expensive than a permanent life insurance policy. However, the longer the term of coverage you select, the more expensive it will be.
A five year term life insurance policy is certainly cheaper than a 20 year term life insurance. You can buy term life insurance for terms greater than 20 years, but at that point it is worth considering permanent life insurance instead.
Permanent life insurance policies do not expire.
Once you buy a permanent life insurance policy it is yours until the day you die, at which time your policy will pay out your benefit to your beneficiaries.
Deciding between term life and permanent life involves several considerations. Your age and your financial obligations are a large factor. If you are 20-years-old and you just started a family, then you may feel like a 20 year term life policy is a good idea. At your age the policy will be cheaper than a permanent life policy and if you die within 20 years your family will be taken care of.
The downside to a term life insurance policy is that there are no benefit payouts or refunds if you die after your term expires. If you die right after the policy is terminated then your beneficiaries do not receive a dime.
Permanent life insurance is more expensive but it pays out the policy benefits regardless of when you die. If you die the day after you buy the policy, then your beneficiaries will claim the money. If you die 70 years after you buy the life insurance policy, then your beneficiaries will claim the money.
The decision between term life and permanent life is really a matter of personal choice and financial budgets. Insurance companies can help you determine if term life or permanent life is the right AARP life insurance decision for you.
Different Term and Permanent AARP Life Insurance Plans
There are four different types of term life insurance available from AARP. With a term plan, the premium tends to increase each year. A level plan locks in your rates and benefits for the entire term.
A convertible plan is a term insurance that can be upgraded to a permanent insurance policy. In a decreasing plan, the premiums will say the same but in exchange for that lower rate, the benefits decrease each year.
For permanent life insurance there are four types of plans as well. Whole life insurance has a fixed premium and the benefits are fixed as well. Universal life insurance gives you the option to change your coverage throughout the policy.
Variable life insurance uses the market for its investments and therefore can be higher or lower, although there is usually a guaranteed minimum payout. A Variable-Universal Life insurance plan provides for a lot of options by combining the best of both a variable insurance policy and a universal insurance policy.
AARP Life Insurance Review: The AARP Annuity Option
Once you have your death taken care of with your AARP life insurance policy, you need to consider your life. When you retire you will be on a fixed income made up of various investment opportunities you made along the way.
For some people, your retirement investment may only be made up of Social Security and pensions. For others, there will be the addition of mutual funds, 401ks, and maybe even real estate. Annuities are another investment option for adding to your retirement income.
Through AARP and New York Life, members of AARP have the option of buying an Immediate Annuity.
When you buy an immediate annuity, you pay for the entire annuity upfront with a lump sum. You then immediately begin drawing a steady monthly income from the insurance company.
If you have the retirement money available for an immediate annuity, it may be worth considering. You will have to decide how much of a monthly draw you want and how much you are willing to invest. Once you die, there is no benefit payout to your beneficiaries and the insurance company keeps whatever money is remaining from your purchase, as well as any earnings from its investments.
You also have the option of buying an annuity that does offer beneficiary payouts. Payouts could include a lump sum amount or a continuation of the monthly draw for a set number of years.
You do not have to be elderly to begin to enjoy the benefits of AARP. You can join as early as 50 and start saving with various discounts. You can also buy AARP life insurance. By entering your ZIP code on the bottom of this page you can get life insurance quotes to compare now.