AIG Life Insurance Review
B.A. Risk Management
Life Insurance Agent
On December 19th, 2019 AIG celebrated its 100th anniversary in business, so it is no surprise this company is one of the most recognized brands in the life insurance industry. With nearly 100 years of underwriting expertise, AIG positions itself among the most competitive life insurance companies in the business. In other words, their life insurance products are strategically priced to compete with the best rates found on the market.
Here is a detailed look at AIG from the company’s history to its current position in the market, as well as the products they offer, and the pros and cons of choosing this company as a life insurance provider.
Our Take - Is AIG the Right Choice for You?
Overall, AIG is a well-known, financially stable company that offers a unique range of policies for customers with different needs. Most policyholders will find they cannot go wrong with most of the policies AIG offers, as they have structured each one with a great deal of flexibility and customization options.
That said, savvy life insurance shoppers will take a look at the policies offered by some of AIG’s competitors, which happen to be some of the best life insurance companies in the business. Comparing the prices of AIG’s policies with other companies will ensure shoppers find the perfect option for their budget and needs.
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About AIG Life Insurance
Term, Whole, Universal
Today AIG has a solid presence in over 80 countries around the world and does business with several Fortune Global 500 corporations. Despite being one of the worst-hit companies of the 2008 financial crisis, AIG has managed to bounce back strongly to retain its prominent position within the market. Because of AIG’s current broad investment diversification and superior financial strength, the brand remains a contender in the hunt for the top life insurance companies.
AIG Financial Ratings
- Standard & Poor’s = A+ (Strong)
- Moody’s = A2 (Good)
- Fitch = A+ (Strong)
- A.M. Best = A (Excellent)
- Comdex Score = 81
Financial ratings are one of the most important indicators of an insurance company’s financial stability. The financial crisis of 2008 and the subsequent bailout by the government affected AIG’s ratings and standing in the market for a brief period of time, but the company has reconsolidated its position in the market and regained the trust of rating agencies. In fact, AIG’s current ratings from the industry’s most respected ratings agencies (see above) do not reflect the rocky uncertainty of the company’s most recent past.
AIG’s $491 billion in assets (1) is yet another reason why the experts consider it to be a financially stable company.
AIG’s Life Insurance Policies
AIG offers a wide range of life insurance policies to meet the needs of people from different backgrounds and income levels.
AIG Term Life Insurance
AIG offers a very unique term life insurance policy called Select-a-Term, which allows policyholders to choose the term period of the policy themselves. Unlike other insurance companies that offer term life policies with fixed time periods, AIG offers a significant deal of flexibility with respect to the term period. For instance, in addition to a 10-year term life policy option, AIG offers term life policies from 15 to 35 years with 18 different term durations to suit the varied needs of its members.
This flexibility is useful in situations such as the following:
If an applicant has 16 years left on his or her mortgage, so it makes little sense to purchase a 20-year term policy, as it will outlast the mortgage debt by four years.
Similarly, if retirement is 22 years away, a 20-year policy will leave the insured without coverage for the last two years, which is when coverage is needed the most. With other companies, there is little choice but to purchase a 25-year policy, which means the insured will inevitably pay for coverage they do not need.
AIG Select-a-Term eliminates these problems completely by letting the policyholder choose the term period he or she needs. Whether a 16-year policy, a 21-year policy, a 27-year policy, or a 34-year policy is needed, AIG can meet that need.
Convertible Term Life Insurance
AIG also offers the choice to convert term life policy into a permanent policy any time before the policy expires or when the policyholder turns 70, whichever comes first.
The best part about the convertibility option is there is no additional underwriting involved and the member’s current insurability is not considered.
There are two scenarios where the convertible option might come in handy.
- An insured individual’s term policy is about to expire, but he or she still has financial commitments and wants to stay insured. In such a case, it is not advisable to let the existing policy expire and then buy a new policy, as the policyholder will have a hard time qualifying for the new policy after undergoing medical testing again. Even if approved, they are likely to pay more due to age. So, converting to a permanent policy makes sense in this regard.
- A conversion is also a good option for policyholders who are diagnosed with a health ailment towards the end of the term of their policy, and they want to make sure their family’s needs are taken care of in case something happens to them. Again, in such a scenario, it is not ideal to let the existing policy expire and then buy a new one. It is nearly impossible to get an approval that is affordable with an existing health problem. Here, converting the term policy into a permanent one would be the best option for the insured.
Quality of Life Insurance
AIG’s Quality of Life policy provides a death benefit in the event of the policyholder’s death, just like a term life policy. In addition, the policy also offers what is called “living benefits” which is financial assistance while the policyholder is still alive. The benefits are paid out to the policyholder if they are diagnosed with a chronic illness, critical illness, or terminal illness.
There are four types of Quality of Life policies available.
QoL Flex Term – This option includes guaranteed benefit and living benefits and allows for a choice of term periods, either 10 years, 15-30 years, or 35 years.
QoL Guarantee Plus GUL II – This coverage option includes guaranteed benefit and living benefits and builds cash value to provide supplementary income.
QoL Value+ Protector – This option includes guaranteed benefits up to the age of 100 and living benefits. Being an index universal life policy, it allocates a portion of the premium in index accounts. Whenever the stock market index goes up, the account earns interest. If the cash value grows larger than the company’s assumptions thanks to an upward trending stock market, the policyholder has the option to withdraw the excess cash value.
QoL Max Accumulator+ – This policy includes a guaranteed death benefit and living benefits. It is an index universal life policy with downside protection. When the index goes up, this account earns interest. Consequently, when the index goes down, this account does not lose money, as the policy’s built-in feature protects the existing cash value from market pitfalls.
Universal Life Insurance
AIG offers four guaranteed universal life policies.
Secure Lifetime GUL 3 – This policy includes a guaranteed death benefit and the option to surrender the policy in the 20th year (the insured receiving 50% of the premiums paid) or in the 25th year (the insured receiving 100% of the premiums paid or 40% of the face value, whichever is smaller).
The insured can choose the term period or the age at which they wish to receive the death benefit and even structure a customized payment plan. If diagnosed with a chronic illness, the policyholder can access the death benefit while still alive. If the insured lives beyond 85, he or she can access the death benefit in the form of supplemental monthly payments, as well.
AG Secure Survivor GUL II – This AIG policy option offers a guaranteed death benefit paid out to beneficiaries when the policyholder and spouse pass away. This policy offers members the choice of the term period or the age at which they wish the death benefit would be paid. This policy also brings with it the option to surrender the policy in the 15th year and receive up to 100% of the premiums paid. The policy accrues cash value at a guaranteed rate, accessible for various purposes.
Value+ Protector – This is the same as the QoL Value+ Protector policy. It includes a guaranteed death benefit, living benefits, and a cash value for which growth depends on the performance of the stock market index.
Max Accumulator+ – This is the same as the QoL Max Accumulator+ policy. It includes a guaranteed death benefit, living benefit, and a cash value for which growth is tied to the market’s performance, but it is protected against market downturns.
Variable Universal Life Insurance
AG Platinum Choice VUL 2 – This AIG product includes a guaranteed death benefit and a variable investment component, for which growth depends on the performance of the stock market. The insured can plan their own premium payment structure.
Policyholders can make a partial or full surrender at any time and receive the accumulated value. Premium payments can be transferred between a fixed account and variable investment accounts. The insured has the option to borrow against the policy value at any time.
Guaranteed Issue Whole Life Insurance
This is a no-strings-attached policy for those between 50 and 85 years of age. There is no medical exam involved, and applicants cannot be rejected for health reasons. It provides a guaranteed death benefit and offers living benefits, accessible in the event of a chronic or terminal illness diagnosis.
Accidental Death & Dismemberment Insurance
This is a policy that does not involve a medical exam. It includes a guaranteed death benefit (which will be paid out if the insured is killed in an accident) and living benefits (which will be paid out if the insured loses eyesight or any limbs, suffers a stroke, or suffers from other certain injuries).
AIG Life Insurance – Pros
The advantages of choosing AIG as an insurance provider are summarized below.
- Liberal underwriting policies for people in high-risk health categories, which make it easier for them to qualify.
- Premium payments are mostly affordable, compared to most other companies.
- The company offers a wide range of policies, so no matter how unique the needs are, chances are a policy that matches the requirements distinctly is available.
- Most policies have extremely flexible terms and allow customization of the premium payment structure, policy duration, and other aspects.
- Many policies offer a built-in living benefits feature at no extra cost, which is a huge advantage.
AIG Life Insurance – Cons
While the list of cons for AIG is much shorter than the advantages listed above, the disadvantages are worth noting.
- Many policies offered by AIG involve a medical exam (the only exceptions are the Guaranteed Issue Whole Life policy and the Accidental Death & Dismemberment policy). The limitation with a required medical exam is if there is any illness or that could put an applicant in the high-risk category, such as high blood pressure, diabetes, high cholesterol levels, a family history of heart disease, etc., approval will likely yield higher premiums.
- Also considered a plus, the vast number of options for policy choices offered by AIG can make an already daunting task seem even more overwhelming. An experienced agent can assist with these challenging decisions and take the pressure off the process of selecting a policy.
Read my custom comparisons:
- AIG 2018 Combined Annual Statement - Available from: https://www.aig.com/content/dam/aig/america-canada/us/documents/investor-relations/2019/aig-2018-combined-annual-statement.pdf