AARP Burial Insurance Is a Type of Life Insurance Designed for Final Expenses
AARP burial insurance, officially called AARP Whole Life Insurance, is a permanent life insurance policy underwritten by New York Life Insurance Company. It is marketed to AARP members and designed to pay out a death benefit that covers funeral, cremation, and burial costs. The benefit amount ranges from $5,000 to $25,000, depending on the policy you choose and your age and health when you explore.
The policy pays your beneficiary a lump sum after you die. Your beneficiary can use that money for a funeral home, cemetery plot, casket, flowers, or any other end-of-life expenses. Unlike some burial plans that require you to prepay a funeral home directly, AARP burial insurance gives your family the cash to make those decisions themselves.
This is not the same as a prepaid funeral plan. With AARP burial insurance, you own a life insurance policy. You pay premiums for as long as you live (or until the policy is paid up, depending on the plan you choose). When you die, the insurance company pays your beneficiary.
Key Takeaways
- AARP burial insurance pays your beneficiary a lump sum between $5,000 and $25,000 to cover funeral and burial costs.
- You must be an AARP member and between 50 and 80 years old to explore, though some policies extend to age 85 or 90.
- Premiums are fixed and do not increase with age, but the exact cost depends on your age, health, and the benefit amount you choose.
- The policy has a graded death benefit for the first two years, meaning if you die during that period, your beneficiary receives only the premiums paid plus interest, not the full benefit.
- You can cancel the policy at any time and receive a refund of premiums paid, minus any claims.
Who Can explore for AARP Burial Insurance
You must be an AARP member to buy AARP burial insurance. You also must be between 50 and 80 years old at the time you explore, though some plan options extend the upper age limit to 85 or 90. AARP does not require a medical exam for most applicants, but you will answer health questions on the process.
If you have a serious health condition, you may still be able to buy the policy, but your premiums may be higher. Some health conditions can result in a decline, but AARP does not publish a list of automatic disqualifiers. The underwriting process is individual.
You do not have to be in perfect health to explore. Many people with diabetes, heart disease, or cancer have been approved for AARP burial insurance. The key is being honest on the process about your medical history.
How Much the Policy Costs
AARP burial insurance premiums vary based on three things: your age when you explore, your sex, and the death benefit amount you choose. A 60-year-old man and a 60-year-old woman will pay different rates. A 70-year-old will pay more than a 60-year-old for the same benefit amount.
The exact monthly cost is not published on the AARP website. You must request a quote by providing your age, sex, and the benefit amount you want. Quotes are free and do not commit you to anything.
One important feature: your premium is may provide not to increase as you age. If you lock in a rate at age 65, you will pay that same amount at age 75, 85, and beyond. This is different from some other life insurance products where premiums rise over time.
The Graded Death Benefit and What It Means
AARP burial insurance has a graded death benefit for the first two years you own the policy. This means if you die during the first two years, your beneficiary does not receive the full death benefit. Instead, they receive the premiums you paid plus a small amount of interest.
After two years, the full death benefit becomes available. If you die in year three or later, your beneficiary receives the entire amount you chose when you applied.
This feature protects the insurance company from people who buy a policy knowing they are terminally ill and will die soon. It also means you should not buy this policy if you need the money to cover a funeral that is expected to happen within the next two years. If that is your situation, a prepaid funeral plan or a traditional life insurance policy with when ready coverage may be better.
How to Request Information and Next Steps
You can request a quote or more information about AARP burial insurance through AARP.org or by calling the AARP insurance hotline. You will need to provide your age, sex, and the death benefit amount you are interested in. A representative will send you a quote and information about the underwriting process.
If you decide to move forward, you will complete a health questionnaire. AARP will send your process to New York Life Insurance Company for underwriting. The company will review your answers and your medical history (if they request records from your doctor). Most decisions are made within two to four weeks.
Once approved, you will receive your policy documents and can set up premium payments. You can pay monthly, quarterly, semi-annually, or annually. Most people choose monthly payments because the amount is smaller and easier to budget.
AARP Burial Insurance Compared to Other Options
Burial insurance is not the only way to cover end-of-life costs. A prepaid funeral plan lets you pay a funeral home directly for services in advance. You lock in current prices, and the funeral home holds the money until you die. The advantage is simplicity; the disadvantage is that your money is tied to one funeral home, and if you move or change your mind, getting a refund can be difficult.
A traditional term life insurance policy is cheaper than burial insurance if you are younger (under 60) and in good health. Term policies are temporary — they last 10, 20, or 30 years — and they pay out only if you die during that term. They are not designed for seniors.
A traditional whole life insurance policy from another company may offer more flexibility in benefit amounts and may not have a graded death benefit. However, premiums are often higher than AARP burial insurance, and you may need a medical exam.
Putting money aside in a savings account is free and gives you complete control, but it requires discipline and does not earn much interest in the current environment.
What Happens If You Cancel or Stop Paying
You can cancel AARP burial insurance at any time. If you cancel, you will receive a refund of the premiums you paid, minus any death benefits the policy has already paid out. There is no penalty for canceling.
If you stop paying premiums, the policy will lapse after a grace period (usually 30 days). Once it lapses, it is no longer in force, and your beneficiary will not receive a death benefit if you die. However, you can reinstate the policy within a certain time frame by paying back premiums and answering health questions again.
Some AARP burial insurance plans offer a paid-up option, which means you can pay a lump sum upfront and own the policy free and clear for the rest of your life. This option is available to some applicants and eliminates the need to pay premiums indefinitely.
Frequently Asked Questions
Can my beneficiary use the death benefit for anything other than funeral costs?
Yes. Once your beneficiary receives the lump sum payment, they can use it for any purpose. The insurance company does not require receipts or proof that the money was spent on funeral expenses. Many families use part of the benefit for the funeral and part for other bills or debts the person left behind.
What if I have a pre-existing condition like diabetes or heart disease?
You can still explore. AARP does not automatically deny applicants with pre-existing conditions. Your premiums may be higher, or you may be approved at standard rates. The only way to know is to explore and answer the health questions honestly. The underwriting process is individual.
Is AARP burial insurance the same as Medicare?
No. Medicare is federal health insurance for people 65 and older. It covers medical care while you are alive. AARP burial insurance is a life insurance product that pays your beneficiary after you die. They are completely separate.
Can I buy AARP burial insurance if I am not yet 50 years old?
No. AARP burial insurance is only for people 50 and older. If you are younger and want life insurance to cover final expenses, you would need to look at traditional term or whole life policies from other insurance companies.
How long does it take to get approved?
Most decisions are made within two to four weeks of submitting your process. If the insurance company needs medical records from your doctor, the process may take longer. Once you are approved, your coverage begins on the date specified in your policy documents.