This article is one in a series on life insurance offered through the AICPA. Our AICPA Life Insurance Review looks closely at the term life insurance products offered by the AICPA. The AICPA life insurance rates are compared to other leading term carriers in an article here.
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The AICPA life insurance plans offer coverage for spouses and children. We will examine this coverage thoroughly in this article. You can see (as we discovered in our research by running dozens of quotes), that you can do better obtaining coverage outside the AICPA in most situations. We will examine the family coverage available to members of the AICPA and see how it stacks up to other options.
AICPA For Family Members – Spousal Coverage
According to the AICPA,
You can request Spouse Life coverage if you are eligible for coverage and your spouse doesn’t already qualify for an AICPA life insurance plan. You can have coverage under the Spouse Life Plan even if you don’t participate in any AICPA Life Plan.
If your AICPA membership terminates, your policy (or your spouse’s policy) can be converted to an individual policy. However, the rate is not guaranteed to stay the same. The AICPA coverage is a group plan through Prudential. Like most group plans, it’s usually not advantageous to convert the policy. This is usually a smart move only when you are uninsurable and don’t mind paying much higher rates to keep some coverage in force.
The possibility of terminating your membership prior to the expiration of your policy is something to consider. This could occur due to a career change, disability, death, divorce and many other reasons.
AICPA Life Plans available to Spouses
The plans available to spouses of AICPA members are the same one available to members. The two types of term plans are:
- CPA Term Life – Increasing Term Plan – 5 year rate brackets
- Level Premium Term (LPT) – 10 & 20 year level term plans
Rates for Spousal Coverage
The rates are the same whether you are an AICPA member or a spouse. However, the Cash Refunds are slightly lower for spouses. This translates into slightly higher premiums. You should review the article where we compare the AICPA rates, both for the level term and the increasing term products. We discovered that if your health is average, good, or excellent, you will fare better with a non-AICPA individual plan.
Most people fall into one of the following categories.
- Average to Good Health: You should qualify for Standard Plus or Preferred rates. The premium will be lower with several companies such as Ohio National, Banner Life and others.
- Excellent Health: There is good chance you will qualify for the “Preferred Best” rates. This means your premium savings will be even greater.
- Significant Health Issues: There are some health issues that could prevent you from qualifying for Standard, Plus or Preferred rates. If you are overweight and have hypertension (as an example), that couuld cause you to receive Standard or lower rates. In that case, you will usually be better off with a CPA Increasing Term plan – IF you plan on keeping it for approximately 10 years or less. Any savings diminishes longer than 10 years. So, if you need coverage for 15, 20 years or longer, you will do better with an individual plan in most cases.
- Serious Health Concerns: If you take multiple medications and have a chronic health condition such as diabetes or COPD, then you might do better with the CPA Increasing Term plan. It would be best to check into options with the CPA Increasing Term and allow an independent agent to get comparison quotes with several carriers. Results will be different depending on the term period.
How To Determine Which Plan Is Best?
If you’re in excellent health, then it is rather easy to find the best term life insurance. Whether it’s a 10-year, 15-year, 20-year, 30-year or “term to age 100“, it is easy to compare “apples-to-apples” by running quotes.
The process requires a couple of extra steps when you have medical conditions. Typically, minor conditions such as hypertension, high cholesterol and hypothyroidism will not disqualify you from Preferred rates (if controlled with medication). However, a combination of minor medical issues or more serious health problems, requires medical underwriting review.
It’s best to work with an independent agent who can check with multiple carriers and determine which carriers will make the best offers. Typically, we take results from a paramed exam, including lab results and shop the case. It’s important to understand this process so you don’t settle for higher rates through the Increasing Term plan. That may be your best option, but it may not…we explain more below:
One of the advantages of the CPA Increasing Term plan is that it is offered on a “simplified issue” basis. If you are under age 45, then the Standard rate class is the only one available. At age 45-49, you can qualify for the Select rate class and at age 50 and older, the Preferred rate class is available for those who qualify.
As mentioned above, the CPA Increasing Term plan can make sense for those with serious medical conditions. The reason for this is due to the limited health questions. Also, no medical exam is required. This type of application process is referred to as “simplified issue” as opposed to a full medical underwriting process.
Similar to a group plan, the CPA Increasing Term plan is a good option for people who can’t qualify for Standard or Preferred rates through individual carriers.
Coverage For Children
Just like most individual policies, the group policies offered through the AICPA offer life insurance coverage for children. The CPA Life Plan (Increasing Term) and Level Premium Term products offer $10,000 of coverage for children. The additional cost is $6 per year for all dependent children. This is a good value, as most individual policies charge $6/month for child(ren) life insurance riders.
Children are eligible for this optional coverage from birth through the age of 25, as long as they are unmarried.
AICPA For Family Members – Conclusion
Overall, the term life insurance offered through the AICPA can be a good deal if you or your spouse has serious health conditions. The cost for the simplified-issue CPA Life Increasing Term could be a good, low-cost option. For members or spouses that are in average to excellent health, rates with individual companies will be a better value.
It is a good opportunity for spouses of AICPA members to get this type of coverage if they can’t qualify for decent rates otherwise. Also, the coverage for dependent children coverage is priced very low.
We think it’s important to alert yo to the fact that both AICPA term products are not guaranteed. Even through Prudential is an excellent carrier, the rates could increase for various reasons. Though unlikely, it is possible for rates to increase at any time. The same hold true for the Cash Refunds. Cash Refunds reduce the premium significantly – usually close to 50%. We factored in the Refund in all of our quote comparisons. However, this refund is not guaranteed either.
We will be glad to run comparison quotes so you can make an informed decision about your life insurance coverage. It often helps to see quote comparisons showing the AICPA life insurance plans and the most competitive individual plans. Please call us if you would like help determining the best type of coverage for you and/or your family members.