“Are AICPA life insurance rates the best I can get?” This is a question we get all the time.
The American Institute of CPAs also referred to as the AICPA, offers those who work in the accounting profession as Certified Public Accountants (CPAs) a wide range of services.
One of these is the purchase of life insurance.
While it’s nice to have the ability to purchase your life insurance policy with AICPA, is it better than purchasing an individual life insurance policy?
You’ve worked hard to become a CPA. All those late nights studying in college and then becoming certified. You should be rewarded for all the hard work. As a member of the AICPA, you get a lot of rewards.
Don’t assume their insurance policy is the best deal just because it’s a benefit of the group!
First, Why Do You Need Life Insurance?
Before we compare AICPA life insurance to other individual life insurance policies, we should outline the importance of a life insurance policy.
Although many Americans see life insurance as a waste of money, it’s one of the most important purchases you can make, financially-speaking.
Life insurance can provide peace of mind knowing that if something tragic were to happen to you, your family would be financially sound.
If you were to pass away today, would your family be left under thousands of dollars in debt?
The average funeral now costs $10,000, which is a hefty bill to leave behind for your loved ones. Not to mention any debts they could be left paying for.
Do you have a mortgage, car payments, or student loans? If you die, your family will be left to pay for all of those bills.
Aside from paying off any outstanding debts, your life insurance policy can also replace your lost income. This reason is critical for any person that is the primary income-earner in their family, especially if you are the ONLY income-earner in the household. If something were to happen to you, do not leave your family wondering if they will be able to pay bills in the upcoming months.
Life insurance can give them the financial security they need to cope during the difficult months.
AICPA vs. Other Insurance Policies
The AICPA member insurance programs provide coverage to association members and their families, as well as to their employees.
The program began back in 1947, and it has evolved from offering just one type of coverage into the provider of 15 today. These plans provide insurance for both personal and business needs.
They offer several different policy types and amounts to fit you and your families’ insurance needs.
They have three separate plans:
- CPA Life
- Level Premiums Term
- Group Variable Universal Life
Each one has different lengths of coverage, eligibility, and how often the rates will change. Each plan allows for coverage up to $2.5 million, which should be more than enough for you and your family.
While often buying as a group can help in obtaining a lower premium price, this does not always equate to receiving the very best in product or service – which is why it is still important to compare before purchasing.
This can be especially important with life insurance because this is a product that the buyer is relying on to provide the funds that will keep his or her family or business financially secure in the future.
When buying a product or service through a club or association, many members automatically assume that the price they are obtaining is the lowest one available. But this is not necessarily the case.
Just because you are a part of an association, does not mean that you’re receiving the best monthly premiums or the best coverage for your money.
As an example, in an AICPA review of the term life insurance coverage that is offered through Prudential, the premiums are actually higher than various individual term life coverage that can be purchased out in the market.
In a comparison of a 45-year-old, non-smoker male in preferred health who is purchasing $1,000,000 in coverage, it was found that on a 10-year level term policy, the monthly rate of the AICPA plan was $38 higher. In this case, the $38 monthly increase represented a premium of 77% higher.
Likewise, using the same parameters as a 45-year-old female, the AICPA rate was more by $24 per month, which represented a premium of more than 50% higher on the AICPA policy.
Over the course of time, that can add up – and if the policyholder were to keep the 10-year level term life policy throughout its entire duration, the $24 per month addition to price would be equal to $2,880 more than was unnecessarily spent on premiums.
Review of the AICPA’s Coverage
As with most group life insurance coverage, the rates with AICPA are typically discounted on the group life insurance policies through the association. However, as with many of the other group plans that are offered by Prudential, it is possible that there could be a rate increase every few years.
In this case, the rates typically increase every five years.
Because there is no guarantee that a group life plan won’t raise its premium rates, the way to avoid this is to purchase an individual policy.
This way, a policyholder is at least assured that he or she is guaranteed that the policy’s premium is locked in for the life of the policy.
Additional Features of the AICPA Life Insurance Plans
In addition to just providing basic life insurance coverage, the AICPA policy also offers a refund feature. The amount of the refund is based on the insured’s contribution to the policy for each year.
The refund is mainly provided from funds that have not been used for expenses or claims and is therefore given back to the plan’s participants.
Because it depends entirely on claims and other yearly costs, though, the refund isn’t guaranteed. Nor does it accumulate on a tax-deferred basis.
While this return feature sounds like an excellent add-on to the policy, typically these refunds don’t outweigh the costs of the higher premiums you pay every month, especially since you are not guaranteed to receive the refund every year.
Therefore, unlike an individual whole life insurance policy, for example, where the cash value component offers the policyholder a guaranteed interest rate on his or her funds, the policyholder in an AICPA plan could end up with no cash in the policy if the plan must pay out a high amount of claims or other expenses in a given year.
Likewise, if someone is simply seeking term life insurance, there is no need for any cash or refund feature, as they would actually only be seeking pure death benefit protection at the best premium price.
While it can be nice to have the cash value aspect of a life insurance policy, most people will never use it, and you pay more for policies that have it.
One thing that should also be kept in mind when considering the purchase of a life insurance policy through AICPA is the fact that to keep this coverage, you must remain a member of the AICPA association.
Therefore, if you are no longer an AICPA member, you may not be able to keep your life insurance plan. Obviously, this is not something you have to worry about if you purchase an individual life policy from another company.
For some, getting replacement life insurance may not be an issue.
For others, however, who may have contracted an adverse health condition or who are in an older age bracket, qualifying for a new life insurance policy may be much more difficult.
With that in mind, purchasing an individual life insurance policy could make a lot more sense. This way, you are not tied to any other organization to remain insured, and you can keep your life insurance coverage regardless of your occupation, your membership status, or your residence.
In most cases, you will pay cheaper monthly premiums with an individual policy versus one through AICPA.
Considerations Before Purchasing
Before purchasing a life insurance policy, it is important to consider several different factors. First, if you are an AICPA member, review AICPA provided coverage versus other insurance plans that are available to you out in the open market.
When doing so, be sure that you check the following to obtain an apples-to-apples comparison on life insurance:
- Length of policy coverage
- Face amount of coverage
- Type of policy (term versus permanent)
- Any additional policy features (such as return of premium)
- Premium price (compare cost for both the short and the long-term time horizon)
Also, it is also important to review the insurance carrier that is offering the coverage to determine the company’s financial stability and claims paying reputation.
This is because the purchase of life insurance is typically a long-term endeavor – and you will want the company to be there when your loved ones need them to be.
One of the best ways to check the financial strength of an insurer is to review the company’s ratings that are provided by the insurance company rating agencies such as A.M. Best, Standard & Poor’s, Moody’s, and Fitch.
These agencies assign letter grades based on various financial criteria.
Insurers who have ratings of A or better are usually considered to be strong.
Anything with a C, you should be VERY cautious of using, even if you know someone that works there.
What the Underwriters Will Want to Know
When you are ready to apply for life insurance coverage, the insurance company you are applying through will want to know about your health to determine your status as a good risk.
On the application for coverage, you will be asked questions about your:
- Height and weight
- Marital status
- Whether you have children
- Health history
- Family health history
- Medications you are taking (if applicable)
Also, the underwriters will also want to know if you have any other life insurance coverage that is currently in force. This will give them a better idea of how much total coverage you will have should you be approved for the policy that you are applying for.
Each of these factors from the list above could have a significant impact on your life insurance policy and your chances of being approved for a policy. One of the lesser-known factors is your hobbies. What you enjoy doing on the weekend could affect your ability to get a life insurance policy or your ability to get the coverage you want.
For example, if you enjoy rock climbing, riding a motorcycle, or skydiving in your free time, you could very well be turned down on your life insurance application, or pay a lot more for it.
If you have any adverse health condition, it may be difficult to qualify for a Standard life insurance policy, but don’t think it’s impossible.
If you have a serious health complication, you can still qualify for affordable and adequate life insurance. In this case, you may need to work with a company that specializes in higher risk cases.
We can help you in this area. We work with many top insurers, and we are familiar with which carriers are more accepting of various risks.
Often, it simply takes some additional paperwork letting an insurance company know that a particular health condition is under control with diet, exercise, or medication to be approved.
For example, diabetes is one of the most common conditions that can impact your life insurance rates, but with a few lifestyle changes, you can still receive excellent monthly premiums for your life insurance policy.
We can assist you in this area as well – helping to improve your application’s chances of approval and avoid lengthy and frustrating tie-ups throughout the underwriting process.
No Exam Options
One area where AICPA falls short is their options. Unlike other carriers, they don’t have a ton of choices for insurance coverage.
For example, they don’t sell a no exam policy.
No exam plans are an excellent choice for some people, but if you want to skip the exam, you’ll have to go somewhere else.
Why would you want a no exam policy? There are a couple of benefits which can make them an attractive option.
The obvious one is you don’t have to take the medical exam. This makes it much quicker to get life insurance.
With some carriers who sell no exam life insurance, you can get approved in less than 2 days.
No exam is more expensive, but for some people, it’s the best choice. Consider buying a no exam policy, but you will need to choose a different carrier.
How to Ensure That You’re Getting the Best Policy For Your Specific Needs
One of the best ways of ensuring that you’re getting the right life insurance policy for your specific coverage needs is to directly compare policies from top rated life insurance companies, along with the corresponding premium quotes – and we can help you do that quickly and conveniently.
Our form is easy to use, and you can have life insurance quotes in a matter of minutes.
If you currently have a life insurance policy through AICPA, or you have received a quote from them, do not think that this is the lowest premium you can get.
If the insurance agent told you it is, they are probably lying. While there are some factors that you cannot control, there are a few ways that you can get lower life insurance premiums that can save you thousands of dollars every year.
The first way is to lose weight.
Being overweight, or above the average weight for your height can cause your premiums to increase by several thousand dollars every year. Losing weight and getting to a healthy weight will not only make your body feel better but also your bank account.
If you are a smoker or tobacco user, you get better rates by kicking the bad habit. Smoking cigarettes or using chewing tobacco will automatically qualify you as a high-risk applicant.
Before you decide which company to purchase your life insurance policy from, kick the tobacco. Not only will you save money every month on your monthly premiums, but you will also save money by not buying tobacco products anymore.
Another way to get better rates on your policy is to have safe hobbies. We mentioned earlier that your hobbies impact your monthly premiums.
If you have dangerous hobbies that you enjoy, it can save you money to find hobbies that won’t change your life insurance policy.
The easiest way to get the lowest rates is to compare the quotes from several companies before you decide on one. Each company has different standards and methods for pricing their life insurance, meaning that each company will view you differently.
This is especially true if you have any risk factors like diabetes, obesity, or cardiovascular complications. Some companies specialize in these high-risk applicants, while others shy away from insuring them.
There could be a significant difference in the monthly premiums between two companies.
We work with many of the best life insurance companies in the marketplace today.
By using the form on this page, you can begin the quote comparison process and see which insurer will offer you the coverage that best fits your needs at the premium price that best fits into your budget.
Instead of having to call each life insurance company to receive a quote, we can save you hours on the phone by compiling all the best plans.
If you have any questions throughout the process – or if you have additional needs regarding life insurance product review or finding the policy features that will most benefit your loved ones – feel free to give us a call.
We can be reached toll-free at 334-380-4188. Call us now and we’ll answer your life insurance questions so that you can be on your way to obtaining the financial protection for those that you love.