When considering life insurance, people want to ensure that their loved ones will be financially protected after they pass away. AARP (American Association of Retired Persons) life insurance is one of the options available for those over 50. It provides coverage to older adults who may not qualify for traditional life insurance plans due to their age or health conditions. Many people wonder, “How much is AARP life insurance a month?” Understanding how much AARP life insurance costs per month requires a detailed breakdown of the available plans, how rates are calculated, and what to expect as you age. By looking into these details, you will be able to make an informed decision about whether AARP life insurance is the right choice for you or your loved ones.
1. What Is AARP Life Insurance
AARP partners with New York Life Insurance Company to offer life insurance plans tailored to seniors aged 50 and older. Unlike traditional life insurance, AARP life insurance does not require a medical exam. Instead, applicants answer a few basic health questions to determine their eligibility. This makes the process easier for those who might be turned away by other insurers due to age or health issues.
The insurance plans provided by AARP come in three basic types: term life insurance, whole life insurance, and guaranteed acceptance life insurance. Each of these plans offers different coverage amounts, durations, and premium structures.
Term Life Insurance
AARP’s term life insurance provides coverage for a specific period, typically until the insured turns 80. This plan is ideal for individuals who want temporary coverage to ensure their loved ones are protected if they pass away during the policy term. Term life insurance has no cash value, meaning it doesn’t accumulate any savings over time, and the premium increases as the policyholder ages.
Whole Life Insurance
Whole life insurance offers permanent coverage, meaning that it lasts for the policyholder’s entire life, provided that premiums are paid. In addition to providing a death benefit, AARP whole life insurance builds cash value over time, which the policyholder can borrow against if needed. Premiums remain level throughout the policyholder’s life, making it easier to budget for.
Guaranteed Acceptance Life Insurance
Guaranteed acceptance life insurance is designed for those who may have health issues that would prevent them from qualifying for other types of coverage. AARP offers this plan with no health questions or medical exams required. As long as you are between the ages of 50 and 80, you are eligible to enroll. However, the premiums for this type of policy are typically higher, and the death benefit is smaller compared to the other plans.
Now that we understand the types of life insurance offered by AARP, let’s dive into the factors that influence the cost of AARP life insurance per month.
See also: How Much Is AARP Car Insurance?
2. Factors That Affect AARP Life Insurance Costs
Several factors affect how much AARP life insurance costs each month. These include the type of policy, the age of the policyholder, the amount of coverage, and any optional riders that are added.
Type of Policy
As mentioned earlier, AARP offers three main types of life insurance policies, each with different costs. Term life insurance tends to have lower initial premiums than whole life insurance because it provides temporary coverage and does not build cash value. However, term life insurance premiums increase as the policyholder ages. Whole life insurance, on the other hand, offers fixed premiums but is generally more expensive because it provides lifetime coverage and accumulates cash value over time. Guaranteed acceptance policies usually have the highest premiums since they accept all applicants regardless of health.
Age of the Policyholder
AARP life insurance premiums are based on age, meaning that the older you are when you sign up, the higher your premiums will be. This is because older individuals are seen as a higher risk to insurers. For example, a 50-year-old may pay significantly less than a 70-year-old for the same coverage amount.
Amount of Coverage
The amount of life insurance coverage you choose directly impacts your monthly premiums. A higher coverage amount means a higher monthly payment. AARP offers coverage amounts ranging from as little as $10,000 to as much as $100,000 or more, depending on the type of policy. For example, if you are looking for a policy to cover final expenses such as funeral costs, a smaller coverage amount might suffice, while those seeking to provide for their family’s ongoing financial needs may need more extensive coverage.
Optional Riders
AARP life insurance policies offer optional riders, which are add-ons to the policy that provide additional benefits. Common riders include an accidental death benefit rider, which increases the death benefit if the policyholder dies in an accident, and a living benefit rider, which allows the policyholder to access a portion of the death benefit if diagnosed with a terminal illness. Adding these riders to your policy will increase your monthly premiums.
Health Status (For Term and Whole Life)
While AARP life insurance does not require a medical exam, applicants for term and whole life insurance must answer some basic health questions. If you have pre-existing health conditions, your premiums may be higher. However, for the guaranteed acceptance plan, your health status does not affect your eligibility or premium costs.
3. Average Monthly Costs for AARP Life Insurance
To get a better idea of how much AARP life insurance costs per month, we can look at some average rates for the different plans. Keep in mind that these are approximate figures, and your actual premium may vary based on your specific situation.
Term Life Insurance Costs
For AARP’s term life insurance, premiums increase as the policyholder ages. Below are some typical monthly premiums based on age and coverage amounts:
Age 50-54: $15 – $50 per month for $25,000 in coverage
Age 60-64: $35 – $70 per month for $25,000 in coverage
Age 70-74: $70 – $120 per month for $25,000 in coverage
As you can see, the premiums rise significantly as you age. For older policyholders, the cost can become quite high, particularly if they need larger coverage amounts.
Whole Life Insurance Costs
Whole life insurance from AARP tends to have higher premiums, but the rates are fixed, meaning they won’t increase over time. Here are some average monthly costs for whole life insurance:
Age 50-54: $45 – $90 per month for $25,000 in coverage
Age 60-64: $65 – $130 per month for $25,000 in coverage
Age 70-74: $90 – $160 per month for $25,000 in coverage
Since whole life insurance provides lifetime coverage and builds cash value, it is more expensive than term life insurance. However, the fixed premiums can be a benefit for those who want predictability in their insurance costs.
Guaranteed Acceptance Life Insurance Costs
Guaranteed acceptance life insurance is the most expensive option due to the lack of health screening. Below are typical monthly premiums:
Age 50-54: $60 – $120 per month for $10,000 in coverage
Age 60-64: $80 – $140 per month for $10,000 in coverage
Age 70-74: $110 – $180 per month for $10,000 in coverage
The coverage amounts for guaranteed acceptance policies are lower, but the premiums remain high due to the higher risk involved in insuring individuals with unknown health conditions.
See also: How Much Is AARP Supplemental Insurance?
4. How to Determine the Right Policy for You
Choosing the right AARP life insurance policy depends on your personal needs, budget, and financial goals. Here are a few steps to help you determine which policy might be the best fit:
Assess Your Coverage Needs
First, consider how much coverage you need. Are you looking for a policy that will simply cover funeral expenses, or do you need to provide ongoing financial support for your family? Calculating your debts, income, and final expenses will give you an idea of the coverage amount that makes sense for you.
Consider Your Budget
Once you know how much coverage you need, consider how much you can afford to pay each month. While term life insurance is generally more affordable in the short term, it may become expensive as you age. Whole life insurance offers fixed premiums but costs more upfront. Guaranteed acceptance life insurance may be your only option if you have serious health issues, but the premiums are typically the highest.
Think About Long-Term Needs
It’s also essential to consider your long-term financial goals. If you want a policy that will accumulate cash value over time, a whole life policy may be worth the higher premiums. If you only need temporary coverage for a specific period, a term life policy could be a more cost-effective choice.
Conclusion
AARP life insurance offers flexible options for seniors seeking coverage without the need for a medical exam. The monthly cost of AARP life insurance depends on various factors, including the type of policy, the age of the policyholder, and the amount of coverage. While AARP life insurance can be more expensive for older individuals or those seeking guaranteed acceptance, it provides valuable coverage for those who might not qualify for traditional life insurance plans. Before choosing a policy, take the time to evaluate your coverage needs, budget, and long-term goals. Whether you opt for term, whole, or guaranteed acceptance life insurance, AARP offers a solution to help ensure that your loved ones are financially protected.
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