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AAA Life Insurance Review

Financial Rating
A-
Our Rating
Phone

888-422-7020

Founded

1969

Products sold

Term, Whole

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If you are a car owner, you are probably familiar with the American Automobile Association (AAA), which is more commonly referred to as ‘Triple A’.

Did you, however, know that the association also has an insurance division and offers a wide array of life insurance policies and annuities?

In this review, we take a look at AAA Life Insurance Company’s product range and discuss the upsides and downsides of choosing AAA as your insurance provider.

History and Background

AAA Life Insurance Company has been in the life insurance business since 1969. Its headquarters is located in Livonia, Michigan. It is a part of AAA, which is one of the most well-known and reputable organizations in the country today.

One of the most interesting anecdotes about AAA is that in 1925, the organization hired a young up-and-comer named Harry Truman to work as a sales representative. The young man would go on to become a decorated military man and the 33rd president of the United States.

Today, AAA Life Insurance Company has a large base of customers who are spread all over the country (except New York) and has issued more than 1.2 million life insurance policies.

AAA Life Insurance Financial Rating

AAA Life Insurance Company has an A– rating (Excellent) from A.M. Best. It is the fourth highest out of the 16 ratings offered by the agency. It is a sign of the company’s financial strength and its ability to honor its commitments to the policyholders and investors.

Life Insurance Products Offered by AAA Life Insurance Company

Term Life Insurance

AAA offers two term life products – Traditional Term Life, ExpressTerm Life, and Term with Return of Premium.

Traditional Term Life

  • Five term lengths to choose from – 10, 15, 20, 25, or 30 years.
  • The amount of coverage you can buy typically ranges from $100,000 to $5 million, or even more.
  • Available for people between the ages of 18 and 75.
  • Premium is locked in for the entirety of the policy’s term.
  • Can be converted into a whole life or universal life policy at the end of the initial term period.
  • Can also be renewed annually at the end of the initial term period. The premium usually increases every time you renew the plan.
  • Can be bought only through an agent.

ExpressTerm Life

  • Five term lengths to choose from – 10, 15, 20, 25, or 30 years.
  • The amount of coverage you can buy ranges from $25,000 to $250,000.
  • Available for people between the ages of 18 and 75.
  • It is a no exam plan, which means there are no lab tests or medical exams involved.
  • You can apply for the policy, get approved, and buy it online – all within a span of 10 minutes.
  • The premium is locked in for the entirety of the policy’s term.
  • Can be renewed annually at the end of the policy’s term. The premium increases with every renewal.

Term with Return of Premium

  • Four term lengths to choose from – 15, 20, 25, or 30 years.
  • The amount of coverage you can buy ranges from $100,000 to $5 million or more.
  • Available for people between the ages of 18 and 65.
  • If you outlive the plan, you will receive 100% of the premiums you paid.
  • Can be renewed annually at the completion of the level-premium term period. The premium increases with every renewal.

Permanent Life Insurance

AAA Life Insurance Company offers whole life as well as universal life policies for people who are in need of lifelong coverage. You can find the key features of these policies listed below.

Whole Life Insurance

AAA offers two whole life products – Simple Whole Life and Guaranteed Issue Whole Life.

Simple Whole Life

  • It is a no exam plan – no lab tests or physicals required.
  • You only need to fill out a form which contains a set of health questions.
  • Age limit – 15 days to 80 years.
  • The coverage amount ranges from $5,000 to $25,000.
  • Guaranteed lifelong protection, as long as the premiums are paid.
  • It is a level-premium plan. Once set, the premium does not increase for any reason.
  • Access to built-in cash value account through policy loans.
  • Access to the death benefit amount in case of a terminal illness diagnosis.

Guaranteed Issue Whole Life

  • Guaranteed approval – no lab tests, no exams, no phone interviews, and no health questions.
  • The death benefit can be anywhere from $5,000 to $25,000.
  • Available for people between the ages of 45 and 85 years.
  • Level-premium plan.
  • Policy can be bought online, over the phone, or by mail.

Universal Life Insurance

AAA offers two universal life products – LifeTime Universal Life and Accumulator Universal Life.

LifeTime Universal Life

  • Lifetime protection.
  • The coverage amount starts at $25,000 and can be as high as $5 million or even more. Age limit – 15 days to 85 years.
  • Premium is determined by the company while issuing the policy and stays level throughout the coverage period. Access to policy’s cash value through withdrawals and loans.
  • Built-in accelerated death benefit rider allows you to receive up to 50% of the death benefit amount if you become terminally ill and have less than a year to live.
  • Policy comes with a number of optional riders including disability waiver of premium, child term, and accidental death.

Accumulator Universal Life

  • Lifetime protection.
  • Age limit – 15 days to 85 years.
  • Coverage amount - $25,000 to $5 million or even higher.
  • Has higher growth potential and accumulates cash value at a much faster rate compared to traditional universal life policies.
  • Cash value can be accessed through withdrawals and policy loans.
  • Customizable premium payments – you can pay as much or as little as you want, as long as you meet the insurer’s minimum required premium limit.
  • Optional riders include child term, accidental death, disability waiver of premium, and guaranteed purchase option.

Now, let us take a look at the upsides and downsides of choosing AAA Life Insurance Company as your insurance provider.

Upsides

Financial Stability and Reliability

AAA Life Insurance Company is among the top life insurance companies which have managed to receive an A rating or above from A.M. Best. It means the company is in an excellent position to meet its ongoing financial obligations and honor its commitments to its investors and policyholders.

It is backed by the AAA family, which is one of the most reliable and established brands in the country today.

The company also has a very good track record when it comes to settling life insurance claims. A survey conducted by LIMRA in 2015 showed that a vast majority of policyholders were happy with AAA’s claims practices. In fact, it was the highest ranked company in terms of customer satisfaction with respect to claims practices.

Excellent Term Life Products

The company offers a traditional term life policy and a no-exam term life policy, both of which are excellent in their own right.

The traditional term life plan allows you to buy a large amount of coverage (anywhere from $100,000 to $5 million+) at very reasonable rates. If you are a 35-year old woman who is in good health, you can buy a 10-year, $100,000 term life plan for $8 a month.

The express term life plan, on the other hand, is a no exam policy which allows you to buy life insurance coverage in a jiffy. You can apply for the policy, respond to a set of health questions, and get approved within 10 minutes.

There are no physicals, lab tests, or phone interviews. Your coverage period starts as soon as your payment is processed.

Studies show that an increasingly large number of customers are not happy with the long waiting periods (two to six weeks) associated with traditional life insurance policies.

This is why digital insurance companies like Haven Life, Ethos, Ladder, and Bestow, which allow you to buy a policy online in a matter of few minutes, are becoming more and more popular – particularly among young, net savvy customers.

As a result, many traditional life insurance companies like AAA have also started offering term and whole life policies which do not require you to go through any sort of exam and can be bought online.

Convertibility

AAA’s term life plans have a level-premium period, after which they can be converted into a whole life or universal life plan. You do not have to reapply for a policy and there are no lab tests or medical exams involved.

You can simply inform the insurer that you would like to convert your existing term life plan into a permanent life plan of your choice.

You will be assigned the same risk class (which was originally assigned to you by the company at the time of issuing your term life policy) – irrespective of your health condition.

AAA Membership Not Needed

You do not have to be an AAA member in order to buy life insurance coverage from AAA Life Insurance Company. There are no restrictions with respect to the amount of coverage you can buy either. You can buy any amount of coverage you need, as long as you qualify for it.

Downsides

Low Coverage Amount for Whole Life Policy

AAA offers a simple whole life policy whose coverage amount ranges from $5,000 to $25,000. It is sufficient to pay for your final expenses and to pay off any minor debts that you might have.

If you are looking for a whole life policy that can provide you with lifelong protection and cover your long-term financial needs, you have to consider other insurance companies which allow you to buy large amounts of coverage.

It makes little sense, since the company also offers a guaranteed issue whole life policy which is tailor-made for people who are looking to buy a plan that can cover their final expenses.

Low Coverage Amount for Express Term Policy

The company’s ExpressTerm Life policy allows you to buy coverage within 10 minutes, right from the comfort of your home. The coverage amount, however, is capped at $250,000.

This is slightly disappointing because digital insurers like Haven Life, Ladder, and Ethos allow you to purchase substantial amounts of coverage ($1 million and above) through the same simplified online application process.

Long Waiting Period

Except for the express term policy and the guaranteed issue whole life policy, all the other policies require you to apply through an agent and answer a set of questions. A medical exam might also be needed in some cases.

You might have to wait anywhere from two to six weeks for the coverage to start. The long waiting period is something that many people – especially young people who like to get things done online instantly – might find off-putting.

Final Thoughts on AAA Life Insurance Company

AAA Life Insurance Company meets our expectations in terms of financial stability, trustworthiness, and claim settlement record. The company offers an excellent traditional term life policy, which can be a good choice for anyone who is young, healthy, and willing to undergo an exam if needed.

If you do not like medical exams or the long waiting period, you can choose the ExpressTerm policy – as long as the amount of coverage you need does not exceed $250,000.

If you need an online term life policy with a large death benefit, you can check out digital insurance companies like Haven Life, Ethos, Ladder, and Bestow.

If you are looking for lifelong protection, the Accumulator Universal Life plan might be a good choice for you. It provides you with ample coverage, has high growth potential, and the premiums are flexible.

If you are looking for a traditional whole life policy or an indexed or variable universal life policy, there are several other, better options available for you. You can check out our list of the best whole life and mutual life insurance companies for more details.

How NoExam.com Can Help You?

If you are looking to buy life insurance coverage for yourself and your family, but do not know how or where to get started, we at NoExam.com can help you.

We can get you personalized life insurance quotes from the highest-rated insurers in the industry and help you buy the right kind of policy – depending on your age, health condition, lifestyle, income level, and financial needs.

Jonathan Holloway
April 16, 2019
Jonathan is a licensed life insurance agent at NoExam.com that writes about insurance, personal finance, lifestyle, and sports. See our pages on life insurance, life insurance rates and life insurance companies for more.
Disclaimer: We make every attempt to make sure our information is up to date, but since things change often it is best to double check the data. This review is an opinion. Clicking on links may result in NoExam.com being compensated.