A Little Reconnaissance RE AARP / NY Life

[rousemark]

I was finally able to get a hold of another AARP group permanent plan. I've gone over the plan and it should be easy pickings for a healthy client.

First off it does not say whole life insurance since it is not whole life.

Second. When the client says that the payments are guaranteed to never increase you can say that is correct, however; everything else in the policy other than the premium can change at any time without your approval.

Third, my favorite part is the section of "When Insurance Ends."

Now the front of the certificate says "Paid Up" at age 95 yet if you read the contract on one of the pages is has a "when insurance Ends" page. It states that the insurance will end prior to the 95th birthday of the last premium due.

Then further in the contract it lets you know what your payment options are if your "Insurance Ends."

Those options are under Non-Forfeiture values:

"If insurance ends and it has no CASH SURRENDER VALUE there are no options available. If the insurance has CASH SURRENDER VALUE when it ends, the OWNER can elect to surrender the insurance for its CASH SURRENDER VALUE or the insurance will continue as a paid-up insurance.

"The amount of paid-up insurance is as stated in the Table of Values on the schedule pages."

That is talking about if you don't pay the premium.. Just like any plan, you don't pay, it ends. If it has cash value at termination, you can request the cash. If you don't request the cash, the automatic non forfeiture will be reduced paid up insurance. No different that other permanent plans except for the fact that a lot of companies have Extended Term as the auto non forfeiture value.

 

[PaperHanger]

Focus on "Policy Changes" section, that's the clause where they can either increase rates or decrease face amt

Remember, the "Policy Holder" is AARP

Just replaced one :-D