Learn What AARP Insurance Products Cover and Cost

Overview of AARP Insurance Products and What They Cover

AARP offers several types of insurance products designed for people age 50 and older. These products include health insurance, auto and home insurance, life insurance, and long-term care insurance. Understanding what each product covers can help you make decisions about your insurance needs. This guide provides information about the basic coverage options and how these products work.

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AARP partners with insurance companies to offer these products, but AARP itself does not sell the insurance directly. Instead, AARP endorses and makes available insurance plans from third-party insurers. This means the actual coverage details, rates, and terms come from the insurance carrier, not from AARP. The insurance companies handle claims, customer service, and policy management.

Health insurance options through AARP include Medicare Supplement (Medigap) plans and Medicare Advantage plans. These products are designed for people who are already enrolled in Medicare. Auto and home insurance products cover vehicles and property. Life insurance through AARP includes term life, whole life, and universal life options. Long-term care insurance helps cover costs related to extended care needs.

Each insurance product has different coverage limits, exclusions, and costs. The amount you pay depends on factors like your age, health status, location, and the specific plan you choose. Rates also vary by insurance company. For example, one company's auto insurance rates might differ significantly from another company's rates for the same coverage level.

Practical Takeaway: Before exploring specific AARP insurance products, understand that AARP endorses insurance but does not provide it directly. The actual insurance coverage and costs come from the partnering insurance companies, and those details vary by company and plan.

Medicare Supplement (Medigap) Insurance Coverage and Costs

Medicare Supplement insurance, also called Medigap, covers some of the costs that Original Medicare does not pay. Original Medicare includes Part A (hospital insurance) and Part B (medical insurance), but it does not cover everything. Medicare beneficiaries must pay deductibles, copayments, and coinsurance amounts. Medigap policies help pay these out-of-pocket costs.

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Medigap plans are standardized by the federal government. There are currently ten standard Medigap plans, labeled A through N. Each plan has the same benefits regardless of which insurance company sells it. However, the price can vary between insurance companies. Plan A is the most basic and least expensive. Plan G and Plan N are popular choices because they offer broader coverage at moderate costs. The most comprehensive plans, like Plan F, cover more out-of-pocket costs but cost more each month.

For example, a 65-year-old in Florida might pay between $100 and $300 per month for Plan A, depending on the insurance company. The same person might pay $150 to $400 per month for Plan G. These prices increase as you age. A person who buys Medigap at age 75 will typically pay more than someone who bought it at age 65, even if they buy the same plan from the same company.

When you first become eligible for Medicare at age 65, you have a six-month window to buy Medigap without facing higher prices based on health conditions. This period is called the "open enrollment period." If you wait longer than six months to buy Medigap, insurance companies can charge you more based on your health history. Some states have different rules about health-based pricing.

Medigap policies do not cover prescription drugs, dental care, vision care, hearing aids, or long-term care. If you need prescription drug coverage, you must enroll in a separate Medicare Part D plan. You can change your Medigap plan once per year during the annual enrollment period, which runs from October 15 to December 7.

Practical Takeaway: Medigap policies cover out-of-pocket costs under Original Medicare. Plans are standardized, so the same plan letter offers the same benefits from any company, but prices differ. Buying within six months of turning 65 can help you avoid higher rates based on health conditions.

Medicare Advantage Plans: Coverage, Costs, and Limitations

Medicare Advantage, also called Part C, is an alternative way to receive Medicare coverage. Instead of using Original Medicare and buying a separate Medigap policy, you enroll in a Medicare Advantage plan offered by a private insurance company. The insurance company receives payment from Medicare to provide all your Part A and Part B coverage. Many Medicare Advantage plans also include prescription drug coverage (Part D), dental, vision, and hearing benefits.

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Medicare Advantage plans typically have lower monthly premiums than Original Medicare combined with Medigap. Many plans have $0 monthly premiums, though you still must pay your Medicare Part B premium to the government. However, Medicare Advantage plans usually have higher out-of-pocket costs when you use care. They often include copayments, coinsurance, and deductibles that you pay when you visit a doctor or get treatment.

There are different types of Medicare Advantage plans. Health Maintenance Organization (HMO) plans require you to use doctors and hospitals within their network. If you go out of network, you typically pay much more, with some services not covered at all. Preferred Provider Organization (PPO) plans let you see any doctor, but you pay less if you use in-network providers. Private Fee-for-Service (PFFS) plans work differently, with the insurance company determining what they will pay for services.

In 2024, the average Medicare Advantage plan has an annual out-of-pocket limit around $7,500 to $8,000. This means once you reach that amount in out-of-pocket costs, the plan covers most remaining care for the rest of the year. However, premiums, deductibles, and some services do not count toward this limit. Different plans have different out-of-pocket limits, ranging from about $5,500 to over $15,000 in some cases.

One important limitation of Medicare Advantage is that the plan's coverage rules apply. If the insurance company says a treatment is not covered or requires prior authorization, you may have to pay out of pocket or try a different treatment. Also, if you travel outside the plan's service area, your coverage may be limited or unavailable. If you move to a different state or region, your current Medicare Advantage plan may not be available, and you would need to choose a new plan.

Practical Takeaway: Medicare Advantage plans offer lower premiums than Original Medicare plus Medigap but require using the plan's network and managing higher out-of-pocket costs. Out-of-pocket limits exist, but plan rules determine what treatments are covered.

Auto and Home Insurance Products: Coverage Types and Rate Information

AARP auto and home insurance products are offered through third-party insurance companies. These are not specialized insurance products created specifically for AARP members; rather, they are standard insurance products that AARP members may purchase. AARP does provide some member discounts on these products, which can reduce your rates compared to non-member pricing.

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Auto insurance through AARP covers liability (damage you cause to others), collision (damage to your vehicle from accidents), comprehensive (damage from theft, weather, or other non-accident events), medical payments, and uninsured motorist coverage. The amount of each type of coverage you choose affects your monthly premium. A policy with higher coverage limits and lower deductibles costs more than a policy with lower coverage limits and higher deductibles.

According to the National Association of Insurance Commissioners, the average annual cost for auto insurance in the United States is around $2,000 for full coverage and about $600 for liability-only coverage. However, rates vary significantly by location, driving record, age, type of vehicle, and the insurance company. In urban areas, rates tend to be higher than in rural areas. A person with accidents or traffic violations on their driving record will pay more than someone with a clean driving record.

Home insurance covers damage to your house and personal belongings from events like fire, theft, and weather. It also includes liability coverage if someone is injured on your property. The cost of home insurance depends on your home's value, the age and condition of the home, where you live, your deductible, and the coverage limits you choose. The average annual home insurance premium in the United States is approximately $1,200 to $1,500, but rates in some states are significantly higher. For example, homeowners in Florida or Louisiana pay higher rates due to hurricane