About AARP Life Insurance Policies

The AARP has been advocating and negotiating discounts for its members for almost six decades. One of the most important, and complex, services offered to AARP members is insurance. While most non-affiliated retired people find it difficult to obtain life insurance policies, the AARP's partnership with New York Life eliminates many of those hurdles for its members.

History

Though the American Association of Retired Persons adopted the name in 1958, it was initially founded in 1947 as the National Retired Teachers Association by Dr. Ethel Percy Andrus as a means for teachers to acquire insurance. This group expanded over the years to become the AARP. The AARP functions as a nonpartisan advocacy group for its members who, contrary to popular belief, 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 to its members, such as life insurance.

History

AARP's negotiations with New York Life have resulted in the insurance giant becoming the administrator of members' life insurance policies. Founded in 1845 as Nautilus Insurance Group, New York Life Insurance Co. has expanded to become one of America's most successful insurance companies and its eponymous building is considered a New York City landmark.

Function

New York Life offers both "term" and "whole" life insurance policies ranging from $2,500, the minimum policy value, to a $50,000 ceiling. The AARP's negotiations have removed several hurdles for members' acquisition of life insurance, including removing the usually mandatory health-screening phase of pre-qualification in order to be considered for a policy.

Features

Term life insurance is the least expensive type of life insurance policy offered by New York Life to AARP members. This policy requires that a policy-holder pay premiums to the policy-issuer for a pre-set period of years, known as the "term." The policy is in effect until the term expires or the policy-holder stops paying the premiums. Its only value lies in the death or major disability of the policy-holder, at which time the entire amount, or a pro-rated amount, is paid out.

Features

Whole life derives its name from the length of the policy that will remain in effect for the entire (or whole) lifespan of the policy-holder as long as premiums are paid. Like term life insurance, whole life insurance has a pre-determined value that is paid out upon the death or major disabling of the policy-holder. Unlike term life, however, whole life insurance is a value-appreciating policy. This means that the policy accrues interest and any monies paid over the pre-determined value of the policy can be used as collateral for loans. The payments, however, are significantly higher for whole life than for term life insurance.

Resources

• New York Life AARP Life Insurance Program

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