AARP Burial Insurance Review 2021: Is This Your Best Option?

AARP Burial Insurance Review
AARP Burial Insurance Review 2021: Is This Your Best Option?

Disclaimer: Willamette Life is a direct competitor of New York Life, this post is written to help you make a purchasing decision and to better understand your options.

AARP & New York Life Insurance Logo

Almost every client I have ever worked with has received a promotional letter in the mail about products to pay for end-of-life bills and why it’s a good option.

The truth is it could be a fine option for seniors but there are also different types of policies that are marketed as a tool to pay for your end of life expenses but will terminate once you reach a certain age.

To make sure you have a solid foundation on the subject we have a resource that goes over the top 10 facts and is the best guide for seniors to learn about this product.

Let’s take a deep dive into one of these companies that floods your mailbox with offers and “deals” to pay for the final bills and end of life expenses.

AARP Burial Insurance Review 2021

magnifying glass

AARP has partnered with New York Life. This means the company name is involved but the actual insurer is a third-party company.

Only AARP Members have access to the policy reviews below.

New York Life is a well-respected A+ financially rated company meaning that they are stable and will pay the claim to you or your family once you or your loved one has passed.

There are three policies offered to AARP members.

All three pay out a tax-free lump sum to your beneficiary.

  • Easy Acceptance: $5,000 – $25,000
  • Permanent: $10,000 – $50,000
  • Level Benefit Term: $10,000 – $100,000

Each one of these policies has pros and cons and could be right in specific situations.

Why Whole Life?

The premiums and the death benefit are locked in for the entire life of the insured. Whole Life accumulates a cash value over time and is often referred to as a permanent plan since it lasts until the insured’s death.

Why Term Life?

This product would be the best option for someone who wants affordable coverage in the short-term. But would also need to understand that this product from AARP will raise in price typically every five years. Term Life is well suited for someone looking for coverage for a temporary time period.

Level Benefit Term Plan

Plan 1: Level Benefit Term

This is a term life product that will allow you to pay affordable monthly premiums initially but over time these monthly payments will increase.

Let’s take a deep dive into this “Crown Jewel” product that they offer.

Quick facts about this plan

  • Premiums increase over time
  • No Medical Exam
  • There is no waiting period
  • Coverage lasts until the age of 80
  • Death benefit coverage: $10,000-$100,000
  • Must medically qualify by answering health questions
  • Access to coverage is for AARP Members only
  • Age Eligibility: 50-74
  • States that offer coverage: All 50 states

The first thing we need to be very clear on is the potential confusion of the word “Level” in the title of this product. Level is a phrase used when discussing simplified issue whole life products.

This product is not permanent which means it is not considered level with regards to whole life industry standards.

Term Life is a popular plan type in this industry and with this product, it is no different for the following reasons.

  • Initially most affordable rates
  • Simple to understand

As long as you make your monthly payments your beneficiary will receive a set payout amount once you have passed away. This product is vastly different from Whole Life for three main reasons, listed below.

What does it take to qualify medically?

This product has three health questions as well as the MIB (Medical Information Bureau) check. This means you will need to answer “no” to these three health questions and the answers also need to be reflected in the MIB check to be awarded this coverage.

MIB is sort of like a medical background check that is used to confirm the answers given.

Health Questions

These are the three medical health questions you need to be able to answer “no” to. If you answer “yes” to any of these or your MIB shows a red flag item then you will be denied.

  1. In the past two years, have you had treatment or medication for or been diagnosed by doctors as having heart trouble, stroke, cancer, lung disease, or disorder, diabetes, liver, kidney disease, AIDS, AIDS Related Complex, or immune system disorder?
  2. In the past two years have you been admitted to or confined in a hospital, nursing home, extended care, or treatment facility?
  3. In the past three months, have you consulted a doctor or had treatment, medication, or diagnostic tests of any type?

If you have had any of the following in the past you are at risk of being denied for this plan. This is because even if you answer “no” to all the health questions there still may be a medication that is associated with the list below that the carrier does not like.

Health conditions that will result in denial:

  • Asthma
  • Cancer
  • Chronic Bronchitis
  • COPD
  • Diabetes
  • Heart problems
  • Kidney disease.
  • Liver
  • Stroke

3 Things to know

Number 3

Policy Terminate at 80

It is critical to understand that when you hear “Term” your policy at some point will Terminate. This product terminates when you reach the age of 80 years old.

Let’s look at some statistics:

  • Males in the United States on average live until 76
  • Females in the United States on average live until 81

This means you are gambling with your family’s finances. Are you going to outlive your term policy?

Price raises every 5 years

Also, the term policy’s price will rise every five years. So by the end of the policy if you are able to outlive it… you still may not be able to afford it.

There are obvious reasons to be skeptical when buying a term product for your end of life expenses.

Does not build a cash value 

One major benefit of a whole life policy is that the product allows you to borrow against it. This comes in handy if you ever need to borrow a small amount of money from your policy to pay for something unexpected. With Term, you are paying to get temporary coverage with no living benefit incentive.

Sample Quotes:

It is important to understand how these prices work. This product for this specific carrier has a few definitions you need to understand.

Age Band- This is the age bracket that you are currently in. Each bracket lasts approximately five years. Once you age into the next bracket your monthly price will jump.

This process will repeat itself until you reach the age of 80 years old. Once you have reached that age your policy will cancel altogether.

Restriction Ages 74-79– You will pay the same price that you were paying in the 70-74 Age Band.

But it is important to know you cannot obtain coverage once you are over the age of 74, the charts below reflect this fact.

Male

*Monthly Premiums

Age$25,000$50,000$100,000
50-54$26$45$79
55-59$36$65$116
60-64$50$94$171
65-69$67$128$236
70-74$95$184$342
75-79NANANA
80Plan TerminatesPlan TerminatesPlan Terminates

Female

*Monthly Premiums

Age$25,000$50,000$100,000
50-54$18$29$52
55-59$22$38$69
60-64$32$58$108
65-69$44$81$154
70-74$74$141$272
75-79NANANA
80Plan TerminatesPlan TerminatesPlan Terminates

*Premiums above are the rates New York Life currently charges to people who have not used any forms of tobacco or nicotine in the last 12 months. Tobacco and nicotine users will pay a higher rate. 

Graph and chart for term coverage

Disclaimer about this plan

The following is on the flagship website.

Premium fine print rules

Should I apply for the Term plan?

This policy is only right if you need short term coverage. It does not make sense financially to buy a policy that raises premiums every 5 years and coverage terminates at the age of 80 as your main end of life expense game plan.

This is like renting a house versus buying a house.

You may get sucked in by the low initial price but please know that price will raise and most people either pay way too much or surrender the policy altogether.

You should not use this as your plan to cover your end of life expenses.

Permanent Plan

Plan 2: Permanent

This is a Simplified Issue whole life product that will allow you to secure coverage for your entire life as long as you pay the monthly premium and give you day 1 coverage.

Let’s dig deeper into what this product has to offer.

Quick facts about this plan

  • Premiums never increase
  • Coverage Never Decreases
  • No Medical Exam
  • Death benefit coverage: $5,000-$50,000
  • Approval based on medical qualification
  • Access to coverage is for AARP Members only
  • Age Eligibility: 50-80
  • States that offer coverage: All 50 states

What does it take to qualify medically?

There is a yes or no health question section of the application process as well as a MIB (Medical Information Bureau) check. To be able to qualify for this day one coverage plan you will need to not have any “red flags” on your MIB.

Health Questions

Listed below are the three medical health questions you need to be able to answer NO. If you answer yes to any of these or your MIB shows a red flag item then you will be denied for coverage.

  1. In the past two years, have you had treatment or medication for or been diagnosed by doctors as having heart trouble, stroke, cancer, lung disease, or disorder, diabetes, liver, kidney disease, AIDS, AIDS Related Complex, or immune system disorder?
  2. In the past two years have you been admitted to or confined in a hospital, nursing home, extended care, or treatment facility?
  3. In the past three months, have you consulted a doctor or had treatment, medication, or diagnostic tests of any type?

What is a condition or medication that may throw up a red flag?

  • A-Fib (Atrial fibrillation)
  • Aneurysms
  • Asthma
  • Blood clots
  • Blood thinners
  • Chronic bronchitis
  • COPD
  • Coronary artery disease
  • Diabetes – all types
  • Emphysema
  • Heart or circulatory
  • Liver or kidney diseases
  • Neuropathy
  • Parkinson’s disease
  • Retinopathy
  • Rheumatoid arthritis
  • Sarcoidosis
  • Seizures
  • Systemic lupus

3 Things To Know

Number 3

Price is locked in

When you think about certainty and understanding what your monthly payments are getting you each month this product is very easy to understand. You make your monthly premium payments and the price you see day one will be the price you see 20+ years from now.

Policy Last your entire life

Once again this is extremely important when it comes to having peace of mind to know that as long as you make your monthly payments the money will be paid to your beneficiary no matter when once you pass away.

Day one coverage

When thinking about buying coverage we are thinking about both the future and the present. It is critical that we find day one coverage for our clients. If you don’t have a guarantee then it leaves a lot of uncertainty, fortunately, this product offers that day one certainty. Burial Insurance covers a wide variety of end of life expenses.

Sample Quotes:

Male

*Monthly Premiums

Age$10,000$15,000$20,000
45NANANA
50$33$48$64
55$41$61$80
60$48$72$95
65$61$91$120
70$79$117$156
75$98$146$194
80$123$184$245
85NANANA

Female

*Monthly Premiums

Age$10,000$15,000$20,000
45NANANA
50$25$37$49
55$30$45$59
60$37$54$72
65$47$70$93
70$63$94$124
75$81$121$161
80$100$149$198
85NANANA

*Premiums above are the rates New York Life currently charges to people who have not used any forms of tobacco or nicotine in the last 12 months. Tobacco and nicotine users will pay a higher rate.

Should I apply for the Permanent plan?

This product would be right for someone who is healthy and looking for immediate coverage at a low price. The fact is that many other insurance companies have lower prices for similar products than the AARP life insurance program.

If you take a look instant quote calculator you will be able to compare the prices offered by several insurance companies. You will see there are much better prices for the same coverage elsewhere. To help get you on the right track, look at the 5 best burial insurance companies article.

Look elsewhere for a similar product, you can find lower prices with other plans!

Easy Acceptance Plan

Plan 3: Easy Acceptance

This is a Guaranteed Issue Whole Life product that will allow you to secure coverage for your entire life as long as you pay the monthly premium. This policy accepts everyone and has a two-year waiting period from when the date the policy was issued.

Quick facts about this plan

  • Premiums never increase
  • Coverage never decreases
  • No medical exam
  • Two year waiting period
  • States that offer coverage: All states except NJ & WA
  • Does not matter if you smoke or not
  • Age eligibility: 50-80
  • Access to coverage is for AARP Members only
  • Death benefit coverage: $2,500-$25,000
  • You will be guaranteed to be accepted unless you are terminally ill

What does it take to qualify medically?

The great news about this product is that there are no medical underwriting or health questions just like the name of the product implies.

3 Things To Know

Number 3

Price is locked in

As Humans we like certainty. This product offers that. Your monthly premiums will never raise as long as you keep this policy in force.

Policy last your entire life

This is crucial for your peace of mind that as long as you make the monthly premiums your policy will be there when your family needs it.

Two year waiting period for coverage

This is the first big negative of this review. What this means is that your coverage will only be paid out in full if you die two years after the policy issue date. This can be problematic for many families who are counting on this payout to help pay with end of life expenses.

What if I die in the first two years of the policy issue date?

It depends on how death occurs, naturally or by accident.

Natural Death – If you were to die of natural causes in the first two years the carrier would pay would refund the premiums paid plus 25% to your beneficiary.

Accidental Death – If you were to die of accidental death in the first two years the entire policy’s face amount would be paid to your beneficiary.

Sample Quotes:

Male

 Monthly Premiums

Age$10,000$15,000$20,000
45NA NANA
50$33$48$110
55$64$95$126
60$75$112$148
65$85$126$168
70$101$150$200
75$115$171$228
80$135$201$268
85NANANA

Female

 Monthly Premiums

Age$10,000$15,000$20,000
45NANANA
50$43$64$85
55$50$74$99
60$57$85$113
65$69$102$136
70$83$124$165
75$96$143$190
80$107$160$213
85NANANA

Should I apply for the Easy Acceptance plan?

This product would be right for someone who currently has a serious medical condition currently or with a negative health history. When looking at all the products on the market there are similarly priced and lower-priced options. Gerber, AIG, and Mutual of Omaha all offer similar products at a very competitive price point.

You should always talk to an independent agency or agent because there is almost always a better option than Guaranteed Issue coverage.

Burial Insurance companies that advertise heavily like Colonial Penn, AAA, and AARP often do not have the lowest monthly premiums.

Look elsewhere for this type of guaranteed product!

Final Thoughts

a. There are many different plan types and it is easy to get confused. You should always attempt to qualify for a day one permanent coverage plan when it comes to covering final expenses with a policy.

A plan that has a waiting period or will expire at some point does not make economical sense for meeting this need. Our AARP Burial Insurance Review shows you that there are better options in the market and that there is not a one size fits all product.

b. Planning for your final expenses is not something you should gamble with. Before applying for coverage call an independent agent or agency to help navigate you through the process.

At Willamette Life, we have access to many different companies and are able to compare and teach you what the best plan is for you and why.

The Willamette Life phone number is: 844-576-0019

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