“Are AICPA life insurance rates the best I can get?” This is the kind of 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 buying 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. But don’t just assume their insurance policy is the best deal just because it’s a benefit of the group!
AICPA vs. Other Life 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 and Spouse Life
- Level Premium Term (LPT for CPA & Spouse)
- Group Variable Universal Life (GVUL)
Each option has different lengths of coverage, eligibility, and how often the rates will change. Each plan allows for coverage up to $2.5 million, which is more than enough for most families.
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.
This is why it is still important to compare other options before purchasing.
This can be especially important with life insurance.
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 insurance option for your money.
AICPA Life Insurance Example
As an example, in an AICPA review of the term life insurance coverage that features underwriting from Prudential Life, the premiums are actually higher than various individual term life coverage that can be purchased out in the open market.
AICPA Life Insurance Rate for Males
In a comparison of a 45-year-old, non-smoker male in preferred health who is purchasing $1 million 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.
AICPA Life Insurance Rates for Females
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.
If you’re looking for the best possible deal on long-term coverage, it’s worth it to check with an independent life insurance agency.
As with most group life insurance coverage, the rates with AICPA are typically discounted on the group life insurance policies available through the association.
However, as with many of the other group plans that are offered by Prudential Life, it is possible the rate could 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 with level premiums.
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.
AICPA Insurance Trust
In addition to just providing basic life insurance coverage, the AICPA Insurance Trust policy also offers a cash refund feature.
The amount of the cash 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 are 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.
Considerations for AIPCA Insurance Trust
One thing that should also be kept in mind when considering the purchase of a life insurance policy through AICPA Insurance Trust is the fact that to keep this coverage, you must remain a member of the AICPA.
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.
Before Purchasing AICPA Life Insurance
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
- The face amount of coverage
- Type of policy
- Any additional policy features
- The premium price (compare the cost for both the short and the long-term time horizon)
Also, with any association coverage, it is also important to review the insurance carrier that is offering 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.
In this case, the AICPA insurance plans are backed by Prudential Life and administered by Aon Insurance Services. Prudential has earned an A+ (the second highest) rating from A.M. Best. Pretty solid on this front.
AICPA Life Insurance Underwriting
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.
AICPA Life Insurance Rate Factors
For example, if you enjoy:
- rock climbing
- riding a motorcycle
…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.
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.
No Exam Options? Not with AICPA
One area where AICPA falls short is its 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 two 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.
What Else is Missing from AICPA’s Insurance Options?
We’ve already talked about the AICPA’s lack of portability. You’d have to stay in the association to stay covered.
We’ve also talked about how you can’t count on the cash refund that some of the association’s policies claim.
What else can you miss out on by not working with a life insurance agent to get your own individual policy?
Here are a few things to keep in mind:
- Limited on Investment Options: This is a problem with a lot of carriers, but it’s especially problematic in group universal policies. You’ll have no control over how the policy’s cash value gets invested.
- Limited Riders: Especially on spousal policies, you may find frustrating limits on riders. There’s no waiver of premium for disabilities rider, for example, on spousal policies. But you can still find the basics such as accidental death and dismemberment and an accelerated death benefit.
- Age Rigidity: Older applicants, age 56 and older, have fewer policy options. Also, some age groups can’t get preferred rates no matter how healthy they are.
For an association-based insurance program, AICPA has a good variety.
Still, getting your own unique life insurance coverage through an insurance agency is the best way to have the most options.
The association also has homeowners and medicare supplemental insurance plans for its members.
How to Ensure That You’re Getting the Best Policy with AICPA
One of the best ways of ensuring that you’re getting the right life insurance policy for your needs is to directly compare policies from top-rated life insurance companies, along with the corresponding premium quotes.
Our quote 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, do not think that this is the lowest premium you can get.
If the insurance agent told you it is, they are probably lying.
Is An AICPA Life Insurance Policy Best For You?
The easiest way to get the lowest rates is to compare the quotes from several companies.
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 the 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.
You can see which insurer will offer you the coverage that best fits your needs at the premium price that best fits your budget.