- AARP was founded in 1947 as the National Retired Teachers Association by Dr. Ethel Percy Andrus as a means for retiring California teachers to acquire insurance. The NRTA expanded to become truly nationwide, and then became the American Association of Retired Persons in 1958. AARP functions as a nonpartisan advocacy group for its members who do not have to be retired in order to join. In addition to lobbying various state and federal governments, AARP also offers benefits and discounts on things like life insurance.
- New York Life Insurance Company, or simply New York Life, is authorized to act on the behalf of the AARP to act as administrator for the life policies of members.
- New York Life's AARP member policies are no different from conventionally obtained policies, except in a few areas: Policy values are strictly regulated between a $2,500 minimum and a $50,000 maximum, and members of the AARP do not have to complete a qualifying physical examination to acquire a policy. Qualifying physical exams are usually the biggest hurdle in obtaining life insurance policies for older people, who tend to be in less-than-peak physical condition.
- Whole life insurance policies are called so because they are intended to be in effect for the entire life span of the policy-holder. Whole life insurance policy-holders pay premiums toward the specified value amount of the policy until the terms of the policy have been attained. At that time, any monies applied to the policy extend the value of the policy, earn interest on the principal and are considered an asset, like a bank account. It is possible for the holder of the whole life insurance policy to put the policy up as collateral for loans.
- Term life insurance policies differ from whole life insurance policies in that the policy is in effect for a predetermined period of time, the most common being a 20-year period. The premiums paid for the maintenance of a term life insurance policy is significantly lower than that of a whole life. This is because term life is not a value-adding asset and can not be used as collateral for a loan, nor does it draw any interest. The only value obtained from a term life insurance policy is upon the death (or disablement) of the policy holder.
