After a recent article on MSNBC, I think it is worth mentioning that AARP most likely has a clear profit incentive to push long-term care insurance as an industry standard. We’ve talked about AARP’s Long Term Care Insurance plan before. I can’t remember the exact amount, but there are several hundred million dollars in insurance commissions paid to AARP every year through all of their insurance programs. In fact, AARP is probably one of the largest LTC insurance referral operations in the country, if you can call it that.
The only reason I bring this up is because a lot of folks view AARP as strictly a lobbying organization that works on their behalf. While this is true, insurance companies certainly reward AARP for sponsoring their insurance products with commissions paid to AARP. Just as an insurance salesman does, AARP advocates their insurance products with a profit incentive. There is absolutely nothing wrong with this, so long as everyone knows what is going on.
Bloomberg originally reported on a story about how some of AARP’s other insurance plans created harship for seniors and how some were disgruntled. Here’s a synopsis of that very article. You can actually watch the story Bloomberg did here about people losing trust in AARP.
The Bottom Line
We frequently will have clients call who purchased long-term care insurance from AARP several years ago when it was MetLife and not Genworth. These plans often paid only 50% of the total benefit for home health care, and as people figured this out, they wanted more comprehensive plans.
As always: shop around for insurance before deciding on a carrier. At LTC Tree, our whole value proposition is to do the shopping FOR you. When you request quotes from us, we’ll provide the top five (or more) insurance carriers to you – with the guaranteed best rates for individual or married couples’ coverage.
