Learn How AARP Life Insurance Works and Costs

What AARP Life Insurance Actually Is and How It Differs From Other Plans

AARP life insurance isn't a government program or a benefit you receive from the Social Security Administration. Instead, it's a line of life insurance products marketed to AARP members through partnerships with insurance companies. United Healthcare and New York Life are among the carriers that have offered these plans. Understanding this distinction matters because it affects how the plans work, what they cost, and what happens when you purchase one.

Learn About Finding Life Insurance Policy Information →

AARP-branded life insurance comes in two main forms: term life insurance and whole life insurance. Term life insurance provides coverage for a set period—typically 10, 15, or 20 years. If you pass away during that term and your premiums are current, the insurance company pays a death benefit to your beneficiaries. Once the term ends, coverage stops unless you renew or convert the policy. Whole life insurance, sometimes called permanent life insurance, covers you for your entire lifetime as long as premiums are paid. It also builds a cash value component over time, which you can sometimes borrow against.

The key difference between AARP insurance and what you might purchase directly from an insurance company is the marketing and underwriting process. AARP negotiates rates and underwriting standards with carriers on behalf of its members, often resulting in simplified underwriting for certain age groups. This means fewer medical questions or a shortened health questionnaire compared to traditional individual policies. However, this doesn't mean there's no medical review—carriers still assess risk, and some health conditions or medications may affect your rates or coverage options.

AARP life insurance policies are sold through AARP's website, phone line, and mail. You work directly with the insurance company or through an agent who represents AARP's partnership with that carrier. The policy itself is a contract between you and the insurance company, not between you and AARP. AARP receives a commission when you purchase, but the organization doesn't manage your claims or handle ongoing customer service—the insurance carrier does.

Takeaway: AARP life insurance is a private insurance product sold through AARP partnerships, not a government program. It comes as term or whole life coverage, with simplified underwriting designed for older adults. Knowing this foundation helps you understand how premiums are set and what happens if you need to file a claim.

Understanding AARP Term Life Insurance: Coverage Length and What Happens After

Term life insurance through AARP typically offers coverage periods of 10, 15, or 20 years, depending on your age when you purchase and the carrier's offerings. This structure appeals to people who want coverage during specific financial responsibilities—such as while a mortgage remains or while grown children might still depend on financial support. A 65-year-old purchasing a 10-year term policy would have coverage through age 75, for example.

Learn About Credit Card Preapproval Options →

During the term period, your premium remains level, meaning it doesn't increase each year (though your rate class—determined at purchase based on health—is locked in). This predictability makes budgeting straightforward. If you die during the coverage period and premiums are paid, your beneficiary receives the full death benefit. Common death benefit amounts range from $10,000 to $250,000, though these limits vary by carrier and your age.

What many people find confusing is what happens when the term expires. Your coverage simply ends. You don't automatically receive a refund of premiums paid, and you don't continue coverage unless you take specific action. At this point, you have three realistic options: let the policy lapse, convert it to permanent coverage (whole life), or purchase a new term policy. AARP term policies typically include a conversion option, allowing you to convert to whole life without a new medical exam—though rates for the converted whole life policy will be higher than if you'd purchased whole life at your original purchase date.

The conversion option is significant for people whose health changes during the term. If you develop diabetes, high blood pressure, or another condition mid-way through a 20-year term, you can still convert to permanent coverage without new medical underwriting. The insurance company accepts your conversion based on your current policy in force, not your current health status. However, the permanent policy's premium will be higher than if you'd purchased it outright at your original purchase date, because the rates reflect your current age and actuarial risk.

Some carriers also offer renewable term policies, where coverage can be renewed at the end of the term without medical underwriting. However, your premium resets based on your age at renewal. A 65-year-old renewing a 10-year policy at age 75 would pay a much higher premium because the risk of death increases with age. This is why renewability becomes expensive—by age 80 or 85, the premium might match or exceed what whole life coverage costs.

Takeaway: AARP term life coverage lasts for a fixed period with level premiums during that time. When the term ends, you must decide whether to convert to permanent coverage, renew (at a higher rate), or let coverage lapse. The conversion option protects you if your health changes, but rates reset based on your age at conversion.

How AARP Whole Life Insurance Works and Why It Costs More

Whole life insurance through AARP provides lifetime coverage, continuing as long as you pay premiums—even if you live to 100 or beyond. Unlike term insurance, your premium never changes throughout your lifetime, and the death benefit stays the same. This stability appeals to people seeking permanent coverage they won't outlive and who want the knowledge that their beneficiaries will receive a payout whenever they pass.

Bank of America Saturday Hours and Service Guide →

The premium for whole life is substantially higher than term life, often 5 to 10 times more expensive depending on your age. For example, a 70-year-old might pay $40 per month for a $25,000 20-year term policy but $200 per month for a $25,000 whole life policy. This difference exists because whole life premiums cover two things: the cost of lifetime coverage and the building of cash value. Cash value is a savings component that accumulates within the policy over time as you pay premiums.

Cash value works like this: a portion of your premium goes toward the insurance company's administrative costs and the pure insurance cost (the risk it takes in insuring you). The remainder accumulates as cash value, held within the policy and growing at a rate set by the insurance company. Some AARP whole life policies offer fixed cash value growth, while others are participating policies that pay dividends based on the insurance company's financial performance. These dividends can be used to reduce premiums, purchase additional coverage, or accumulate as additional cash value.

You can borrow against your policy's cash value during your lifetime. If your whole life policy has accumulated $5,000 in cash value, you might borrow $3,000 to help pay for home repairs or medical expenses. You pay interest on the loan, typically at a rate specified in your policy. If you die with an outstanding loan, the borrowed amount is deducted from your death benefit. For example, if you have a $25,000 death benefit and a $3,000 outstanding loan, your beneficiary receives $22,000.

You can also surrender a whole life policy—meaning you stop paying premiums and request the accumulated cash value. The insurance company sends you a check for the cash value amount, and coverage ends. Some people do this when financial circumstances change or when they decide they no longer need coverage. However, if you surrender a policy, you lose all death benefit protection and cannot get coverage back without a new application and medical review.

The cash value component means whole life policies function partially as a savings vehicle, though the returns are typically modest. AARP whole life policies through carriers like New York Life or United Healthcare generally offer cash value growth ranging from 1% to 3% annually, though this varies by policy and market conditions. This is considerably lower than stock market returns over long periods, but it's guaranteed not to decline.

Takeaway: AARP whole life insurance costs significantly more than term because it covers you for life and builds cash value you can borrow against. The cash value grows slowly but reliably, and you can access it through loans or by surrendering the policy. The trade-off is higher premiums but permanent protection and a savings component.

What AARP Life Insurance Costs and What Factors Drive Your Premium

AARP life insurance premiums vary based on several factors, but the primary driver is your age at the time you purchase. A 55-year-old and an 80-year-old applying for the same

Track Your Western Union Money Order Status →