How Does Group Life Insurance Affect Senior Insurance Rates?

Senior group life insurance is a simply way to obtain coverage through a group or membership. It is often less expensive than an individual policy.

Group Insurance Seniors

Life insurance is important, but many people don’t even think much about the topic until after age 50. As you enter your golden years, your financial planning shifts into a different gear. There are many options available from seniors, including group life insurance that is offered through employers, veterans benefits, or other clubs and organization.

How Does Group Life Insurance Work?

Group life insurance provides a way to insure a group of individuals, or members, under one insurance policy.  It is an excellent way to get affordable coverage for older people, without a medical examination. The most well-known group life insurance coverage for seniors is the AARP life insurance program.

Many seniors choose this program to obtain insurance coverage for their burial expenses, debts, or to leave behind a financial cushion to a loved one. This program is a group life insurance program because you have to be an AARP member to get this particular policy.  The insurance is underwritten by New York Life, and offered under the AARP name to its members. There are currently over 40,000,000 seniors who are AARP members.
It is important to understand that AARP is not the company that provides the life insurance coverage or the death benefits. New York Life is the actual underwriter of the policies for the group coverage for AARP members. Because AARP has so many members and because it is a well-known name, both companies benefit from this relationship.
AARP is able to offer its members valuable and affordable life insurance by a financially stable company, and New York Life benefits from the huge member base of the AARP brand. It is a win-win situation for both companies, and often a winning situation for seniors.

Group Insurance vs. Individual Senior Life Insurance

While group policies like the one offered by AARP are often a good deal for seniors looking for simple and quick coverage, it is important to compare the rate to an individual policy. If you are a healthy senior, then it may be cheaper to get an individual policy and you might be able to lock in the rate for longer than the group policy. This is because with group coverage, everyone is pretty much lumped into one category regardless of specific factors.

There is no medical exam, so things like your individual health history, your weight, etc. are not evaluated on an individual basis. Because of this, seniors who are in good health end up paying more than they would if they bought their own separate policy, and seniors who have health challenges pay less than they would if they ventured out and purchased a separate policy.

Is Group Life Insurance Best for Me?

There are different ways you can approach your life insurance coverage. Some have an individual policy and choose to go through the full underwriting process, which includes a medical exam. Some will have an individual policy and a group policy, such as the AARP life insurance program, as a supplement. Others choose to just get a group policy. It all depends on your needs, your budget, as well as your health. I talked about the difference in cost between a fully underwritten policy and the group policy – if your health is great then you may be better off getting an individual policy and locking in a lower rate for a longer time.

You can get more information about the AARP program through the company website. If you want to explore other options, you can compare rates from other companies here on our website.

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