Aicpa Life Insurance: A Good Deal Or Not?

Life insurance is a personal product and it should be customized to meet your specific needs. The American Institute of Certified Public Accountants (AICPA) offers its more than 400,000 members worldwide a few life insurance programs and some great online tools to connect members with a policy. The AICPA has three life insurance products: CPA Life and Spouse, Level Premium Term & Spouse Level Premium Term, and Group Variable Universal Life. While the AICPA's life insurance plans are a good deal for some, they are not for everyone.

AICPA's life insurance is provided by Prudential

AICPA life insurance is provided by Prudential, the fourth-largest life insurance provider, with 5.45% of the market share in 2022. Prudential has been fulfilling customers' insurance needs since 1875 and is a well-known and reputable insurer.

The AICPA Insurance Trust distributes Annual Cash Refunds to participants. These refunds are for the money that Prudential doesn't use to pay claims or for overhead. However, it's important to note that Prudential is essentially overcharging you for life insurance for a year and then giving a refund (while keeping all the interest accrued). This is a great deal for Prudential but not necessarily for you.

The AICPA offers two term life insurance plans issued by Prudential. The first is the CPA Life Plan, which offers up to $2.5 million in coverage for applicants up to the age of 74. The second is the Level Premium Term (LPT) life insurance plan, which is also capped at $2.5 million in coverage and allows 10 and 20-year level term plans.

The AICPA also offers a group variable universal life insurance policy. This policy offers up to $2.5 million in life insurance coverage at competitive group-negotiated rates. Coverage lasts until age 100 and has a cash value account that can be grown using investment options.

AICPA life insurance is a decent option for CPAs who belong to the AICPA organization, but it's not the best provider on the market. It's recommended for individuals who need basic life insurance coverage for themselves and their spouses, or those looking for a no-exam policy.

AICPA offers three life insurance products

AICPA has 3 life insurance products that they offer: CPA Life and Spouse, Level Premium Term & Spouse Level Premium Term, and Group Variable Universal Life. They also have a few rider options available on some of their policies.

CPA Life and Spouse Life Plans

This is a life insurance plan issued by Prudential (Prudential Insurance Company of America). This is a plan offered to not only members of AICPA but also State Society members or other eligible organizations. You are able to get coverage of up to $2.5M. Coverage lasts until 80 years old, even if you leave or retire as long as you retain membership. You also have the ability to apply for additional coverage at any time.

AICPA Level Premium Term & Spouse Level Premium Term

Level term life insurance provides coverage for the period of time you choose. It allows you to lock in a certain monthly cost that you will pay from now until your policy ends. The period of coverage can be for 10 or 20 years, but note that ages 56-65 are only eligible for a 10-year term. This plan is only available to AICPA members and their spouses aged 65 and under. Coverage amounts are available up to $2.5 million. The policy lasts until the term ends. AICPA life insurance rates remain fixed for the term length.

AICPA Group Variable Universal Life

A variable universal life policy can provide you with life insurance protection and accumulate a cash value. If you are a member and are interested in a group variable universal life policy, speak directly with AICPA for details.

AICPA's life insurance is ideal for those with health issues

AICPA life insurance is ideal for those with health issues. The application process is quick and easy, and most people over the age of 50 can get approved for coverage at the "select" rate without a full health assessment. This makes it a good option for those who may struggle to get coverage elsewhere due to their health.

The AICPA life insurance plan is an increasing term life insurance policy issued by Prudential, with rates increasing every five years. The plan offers up to $2.5 million in coverage, depending on your age and membership in various qualifying CPA programs. Coverage is available until age 80, and applicants can be up to age 74.

The AICPA also offers a Level Premium Term (LPT) life insurance plan, which is also capped at $2.5 million in coverage. This plan allows 10 and 20-year level term options, with rates increasing to age 95 after the level premium period. Applicants can be up to age 65, and a full underwriting is required to qualify for the "preferred" health rating.

While AICPA life insurance plans may be more expensive than individual policies, they are a good option for those with health issues who may struggle to get coverage elsewhere. The convenience of not having to undergo a full health assessment and the reputation of Prudential as the issuer are also advantages of AICPA life insurance.

AICPA's life insurance is pricier than buying an individual policy

AICPA life insurance is pricier than buying an individual policy.

The AICPA, or the American Institute of Certified Public Accountants, offers its more than 400,000 members worldwide a few life insurance programs. These are provided exclusively through Prudential, which ranks well as an insurance provider.

However, despite the convenience of the AICPA's one-stop shopping for insurance needs, the organisation's life insurance plans are more expensive than buying an individual policy.

For example, a healthy 45-year-old male non-smoker seeking a $500,000 policy would pay drastically lower premiums with an individual policy than with the AICPA. This is because the AICPA plan segments the crowd by only accepting CPAs or members of similar organisations, shrinking the risk pool and, inevitably, costing the consumer more.

In addition, the AICPA's term life insurance options have increasing premiums every five years, whereas an individual policy would allow you to lock in a lower premium based on your current age and health and pay that same low rate for up to 30 years.

Furthermore, the AICPA's life insurance plans have a $2.5 million coverage cap, which automatically lowers at older ages.

Therefore, while the AICPA's life insurance plans may be a convenient option for its members, they are ultimately pricier than buying an individual policy.

AICPA's life insurance is not portable

AICPA life insurance is not a portable option for those seeking flexibility in their life insurance. While it may seem like a good deal at first glance, there are several issues with the policy's portability that potential customers should be aware of.

Firstly, to keep your AICPA life insurance policy, you must remain a member of the organisation. This means paying annual membership dues, which can be costly over time. If you decide to cancel your membership, you will likely be unable to renew your coverage, which limits your options and flexibility.

Secondly, as the AICPA life insurance policy is not portable, you will be forced to find a new policy at an older age if you choose to leave the organisation. This will result in higher premiums as the cost of insurance increases with age. Your health status may also change over time, and if it deteriorates, you may face even higher premiums or even be declined coverage altogether.

Another issue with the lack of portability is the limited variety of insurance options offered by AICPA. The organisation only provides a handful of insurance programs, and by restricting members to these few options, they limit their ability to find a policy that truly meets their specific needs.

Furthermore, the AICPA life insurance policy has increasing premiums every five years, which can make it even more expensive over time. The coverage amount is also capped at $2.5 million, and this amount automatically decreases at older ages, further limiting your options.

In conclusion, the AICPA life insurance policy's lack of portability, combined with its increasing premiums, limited coverage, and restrictive membership requirements, make it a less flexible and potentially more costly option over time. Those seeking life insurance would be wise to explore other options in the market that offer more portability and flexibility to meet their individual needs.

Frequently asked questions