AARP Insurance Products May Be Overpriced

Do you have car or life insurance through the AARP? If so, you might want to check to make sure you are getting the best deal.

According to an article in Bloomberg, AARP insurance products can be significantly more expensive than competitors. The reason, the AARP asks for royalties from the companies that market products under the AARP brand. Companies pass this royalty cost on to their customers.

"Laupus stumbled onto something that many members of the world’s largest seniors’ organization don’t know: The group, formerly called American Association of Retired Persons, collects hundreds of millions of dollars annually from insurers who pay for AARP’s endorsement of their policies.

The insurance companies build the cost of these so-called royalties and fees, which amounted to $497.6 million in 2007, into the premiums they charge AARP members, according to AARP’s consolidated financial statement for that year."

AARP uses this money to fund its outreach and to make payments on the bond that was issues to fund its the construction of its new headquarters.

Is this wrong, not necessarily. But don't think you're getting a discount just because it's an AARP endorsed product.