AARP Burial Insurance – A Comprehensive Review for 2024
Posted in Companies last updated on December 4, 2023
AARP burial insurance program is designed to help seniors with their final expenses.
While most baby boomers know and trust the AARP name, you will want to do your homework before buying a burial insurance policy from the organization.
Why?
Because your end-of-life financial needs are so important, it is worthwhile to understand what AARP is not actually a life insurance company and that there are likely better life insurance options to meet your needs.
Here, we will discuss everything you need to know about AARP burial insurance, including how much it costs, how to buy a policy, what happens after purchase, and importantly, alternatives to AARP burial insurance.
Table of Contents
- What is AARP Burial Insurance?
- Cons of AARP burial insurance
- How Much Does AARP Burial Insurance Cost?
- How to Buy AARP Burial Insurance
- What Happens After I Buy an AARP Burial Insurance Policy?
- AARP Burial Insurance Alternatives
- Frequently Asked Questions
- Next Steps
What is AARP Burial Insurance?
AARP burial insurance is a life insurance program designed to cover the costs associated with funeral and burial expenses. While marketed by the American Association of Retired Persons (AARP), the actual life insurance policy is sold through New York Life.
AARP is not a life insurance company. They are marketer of New York Life burial insurance policies.
You must be an AARP member to buy the life insurance products they advertise.
While none of AARP’s policies require a medical exam, the underwriting process depends on the type of life insurance you apply for.
The AARP burial insurance plan offers several different options.
- Term life insurance
- Guaranteed issue whole life insurance
- Simplified issue whole life insurance
The type of burial insurance and amount of coverage you can purchase depends on your age, health status, and other factors.
Term Life
Called Term to 80, or Level Benefit Term, AARP’s term life insurance product will automatically expire at age 80. This is a significant risk if you are looking to buy burial insurance to cover end-of-life expenses.
Why? If live beyond 80 years old, there will be no death benefit for your loved ones because the policy will have expired.
Policy details:
- Available to ages 50 – 74 (spouses 45 -75 years).
- Automatically expires at age 80.
- Face amounts: $10,000 – $100,000.
- Level death benefit.
- Premium increases every 50 years.
- No medical exam.
- Health questions are asked.
- Different payment options available.
- No waiting period for death benefit to pay.
- Terminal illness rider.
Almost always, term life insurance is not recommended as an ideal form of burial insurance for seniors.
Further, with Term to 80, your premiums are not level. While the death benefit remains the same, your premium payments increase every five years. At some point, the price of the policy may become too expensive.
Guaranteed Issue Whole Life
AARP also advertises a form of guaranteed issue life insurance for seniors, called Guaranteed Acceptance.
As with all guaranteed issue life insurance plans, baby boomers should only consider this type of coverage when all other life insurance options have been exhausted.
Guaranteed policies, as long as you meet the age requirements, are issued to everyone who applies. There is virtually no underwriting.
Policy details:
- Available to ages 50 – 80 (spouses 45 – 80 years).
- Policy does not expire.
- Face amounts: $5,000 – $25,000.
- Level death benefit.
- Level premium payments.
- No medical exam.
- No health questions.
- Different payment options available.
- Two year waiting period for death benefit to pay.
- Terminal illness rider after two years.
As a form of whole life insurance, your policy will last your whole life – it does not expire as long as you make your premium payments.
It is important to note there is a two year waiting period before your death benefit will be paid. Because everyone qualifies for this type of policy, unless your death is from a qualifying accident, your beneficiary will not receive the policy proceeds until two years after the policy’s issuance.
Almost all guaranteed issue policies include a waiting period – as a means to protect the financial livelihood of the life insurance carrier.
Simplified Issue Life
Finally, AARP markets a permanent simplified issue policy called Permanent Life.
The coverage lasts a lifetime (as long as you pay your premiums) and there is no waiting period for the death benefit to pay.
Policy details:
- Available to ages 50 – 80 (spouses 45 – 80 years).
- Policy does not expire.
- Face amounts: $5,000 – $50,000.
- Level death benefit.
- Level premium payments.
- No medical exam.
- A few health questions.
- Different payment options available.
- No waiting period.
- Terminal illness rider.
Because you must pass a few health questions with this policy, there is no waiting period. This means your beneficiaries will receive your policy’s full death benefit even if you pass away during the first two years of the purchase of your policy.
While AARP’s marketing of these burial insurance policies is impressive, you need to know they tend to be costly and are only sold through one life insurance company – New York Life.
As a rule, you will want to compare and contrast multiple burial insurance companies with the help of an independent agent, so that you can find the best company to cover the price of your funeral.
Finally, if you are considering buying an AARP Burial Insurance plan or any plan for that matter, it is important to understand all terms and conditions before signing any contracts. This way, you will know exactly what kind of benefits will be provided should something happen unexpectedly down the road.
Key Takeaway: AARP offers three types of burial insurance policies designed to cover funeral and burial expenses for seniors over the age of 50. Be sure to compare their policies with other carriers to find the best rates and policy features to meet your needs.
Cons of AARP burial insurance
There are some drawbacks that should be considered before purchasing an AARP burial insurance policy.
First, remember that AARP is not a life insurance company. They are a solicitor of coverage for New York Life. They only represent one life insurance company, which greatly limits your options.
Second, you must be an AARP member to access their products, including life insurance. This means an additional monthly or year cost must be accounted for.
Third, their life insurance program is a form of group life insurance. Group life insurance, often associated with employers, unions, and membership organizations like AARP, does not provide you with an individual policy. Changes can be made to the group coverage at any time.
Finally, your policy is likely going to be costly – compared to other carriers on the market. The last thing you want to do is pay more money for an inferior product.
While AARP burial insurance may provide some burial coverage for the elderly, it is important to weigh the cons of this policy before making a decision.
Key Takeaway: There are some drawbacks that should be considered before purchasing an AARP burial insurance policy such as limited options, the type of policies available, and cost.
How Much Does AARP Burial Insurance Cost?
The cost of the policy depends on the amount of coverage you choose and your age at the time of purchase. However, you need to know that AARP’s life insurance program is expensive compared to similar to the cost burial insurance policies on the market.
In general, there are three things that will affect the cost of an AARP life insurance policy:
- Age
- Face amount
- Policy type
For example, if you’re 50 years old and want a $10,000 term policy, premiums start around $10 – $15 per month. If you increase your coverage to $25,000, premiums can go up to about $20 – $25 per month. And, your premium payments increase every year.
Keep in mind, their term policies always expire on your 80th birthday.
AARP’s permanent policies cost more.
For instance, if you are a $10,000 simplified issue policy will cost a 50 year old around $25 – $35 per month.
And, a 50 year old buying a $10,000 guaranteed issue policy will pay approximately $45 – $60 per month.
Keep in mind, cost drastically increases with age. As an example, by the time you are 80, a $10,000 guaranteed issue policy will cost you $110 – $145 per month.
Remember, AARP burial insurance policies do not require medical exams for approval; however, they may ask questions about your health during the application process in order to determine eligibility and premium rates.
While burial insurance can provide peace of mind for seniors and their families, it’s important to understand the costs associated with this type of insurance and whether AARP offers competitive rates.
Key Takeaway: AARP burial insurance is typically an expensive way to ensure your loved ones are taken care of after you’re gone.
How to Buy AARP Burial Insurance
Buying an AARP burial insurance policy is a simple process that can be done online or over the phone in. When applying for coverage, you will need to provide some basic information such as your name, address, date of birth and Social Security number.
Once you have provided this information, you will then be asked to select the type of plan and coverage amount that best fits your needs.
After selecting the plan and coverage amount, you will then be required to make payment via credit card or electronic check before finalizing your purchase.
When buying an AARP burial insurance policy it is important to read all terms and conditions carefully so that you understand what is covered under the policy as well as any exclusions or limitations that may apply.
Finally, once your application has been approved by AARP and payment has been made, plan to review plan details on a yearly basis to compare it with your burial insurance needs.
What Happens After I Buy an AARP Burial Insurance Policy?
Once you have purchased an AARP burial insurance policy, you will receive a confirmation letter in the mail with all the details about your coverage. This includes when your coverage begins and how much it will cost each month.
The funds from this type of policy are typically used to cover funeral expenses, cremation costs, outstanding debts, medical bills, and other final costs associated with death.
It’s important to note that you can cancel your AARP burial insurance policy at any time.
Keep in mind that the policies come with additional benefit, known as a terminal illness rider.
The rider allows you to access to a portion of your death benefit while you are still alive – if you are diagnosed with a qualifying terminal illness. This can help cover care costs or other medical expenses not covered by traditional health plans.
It is always best practice to thoroughly review all available options prior to making any decisions regarding purchasing an AARP burial insurance plan so that you make sure it meets both yours and your family’s needs now and into the future.
Key Takeaway: Before signing up for a policy, it is important to read through all the fine print carefully and understand the details of your burial coverage.
Alternatives to AARP Burial Insurance
It is in your best interest to be aware of all of your burial insurance options. The best way to understand what polices you should consider is to partner with an independent agent, who specializes in burial insurance.
To start, be sure to evaluate the features of the following highly-rated burial insurance carriers:
You will want to make sure you compare and contrast multiple burial insurance policies and select the product that best fits your budget and coverage needs.
Frequently Asked Questions for AARP Burial Insurance
Does AARP have burial insurance?
Yes, AARP does offer burial insurance through New York Life. Remember, AARP is not a life insurance company.
It is a type of life insurance policy that pays out a lump sum to cover funeral costs and other end-of-life expenses. The coverage amount varies depending on the policyholder’s age and health condition.
What is better life insurance or burial insurance?
The answer to this question depends on the individual’s needs and preferences.
Life insurance is designed to provide financial protection for loved ones in the event of a policyholder’s death, while burial insurance provides coverage is intended specifically for funeral expenses.
Depending on an individual’s situation, one type of insurance may be more beneficial than the other. If someone wants to leave behind a larger sum of money as part of their legacy, life insurance would be the better option. However, traditional life insurance is harder to qualify for.
On the other hand, if they are looking for something that will cover specific costs associated with end-of-life arrangements such as funeral services or cremation costs, then burial insurance would likely be more suitable.
Ultimately it is up to each person to decide which type of coverage best meets their needs and goals.
Is burial insurance a good deal?
Burial insurance is worth it for many seniors over the age of 50, depending on their individual needs and circumstances. It provides coverage to help cover funeral costs and other related expenses that may arise in the event of death.
For those who are concerned about leaving behind financial burdens for their loved ones, burial insurance can provide peace of mind knowing that these costs will be taken care of.
Additionally, some policies offer additional benefits such as cash value or accelerated death benefit riders which can provide further financial security.
Just be sure to do your research – beyond AARP – to find an appropriate policy with features that meet your specific needs before making any decisions.
Next Steps
AARP burial insurance is a one option for seniors over the age of 50 who are looking for a way to ensure their final expenses are taken care of.
AARP is a solicitor of burial insurance for New York Life, and not the actual life insurance carrier.
By understanding what AARP burial insurance offers, how much it costs, and how to buy it, and importantly – all of your options for burial insurance for seniors – you can make sure you have all the information needed to make an informed decision about this important coverage.
Seniors, now is the time to take control of your future. Get coverage for final expenses, Medicare, health and cancer plans – all tailored specifically to you. Protect yourself from unexpected costs and secure peace of mind knowing that you’re taken care of when it matters most.
Contact iSeniorBenefits today.