AAA Life Insurance Review: Wide Variety of No-Exam Policies, Great Member Discounts
A wide variety of policy options and benefits makes AAA a good consideration, for both term and permanent policies.
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Editor's Rating
AAA offers a good variety of term, whole and universal life insurance policies, and you don't need to be a member in order to get it. Plus, the company offers no-exam alternatives for its term and whole life insurance policies — though you'll be limited to a much smaller amount of coverage with somewhat higher rates.
One of the few elements missing from AAA's portfolio of life insurance policies is traditional whole life insurance, so you would need to look to other insurers for policies over $25,000. And though the company has strong financial strength ratings and few complaints, reviews of its customer service are mixed.
Pros and cons
Pros
No medical exam options for both term and whole life insurance
AAA members get a discount on certain policies
Easy online payment options
Cons
No whole life insurance policies over $25,000
Difficult billing department and claims process
AAA term life insurance
AAA offers a traditional term life insurance policy and an ExpressTerm policy. ExpressTerm is a simplified issue, or no medical exam, term life insurance policy. In addition to not requiring an exam to apply, the key differences between the policies are that ExpressTerm only offers up to $250,000 in coverage, but you apply directly online and can get an approval decision in less than an hour.
You can only get AAA's traditional term life insurance policy through an agent, and it takes weeks to be approved, but you can get a larger amount of coverage and rates are typically lower per dollar of coverage.
In addition, only AAA's traditional term life insurance can be upgraded with a return of premium rider. If you add this rider, the price of your insurance policy is higher, but if you outlive the policy term, your premiums paid are returned to you. And if you choose to cancel your policy partway through the term, you'd get a portion of premiums paid in return.
However, this rider is only available for those younger than the age of 65 who are purchasing policies with at least $100,000 in coverage for a term of 15 or more years. Plus, no other riders can be added to a return of premium policy.
You can get both of AAA's term policies if you're not a member, though the $60 annual fee is waived for members who get ExpressTerm. And if you die during the term of the policy, your spouse will get a lifetime AAA membership for free. Since AAA also offers permanent life insurance policies, all term policies can be converted to permanent coverage without demonstrating proof of insurability, either at age 65 or the end of the initial term.
Traditional term | ExpressTerm | |
|---|---|---|
| Term lengths | 10, 15, 20, 25 or 30 years | 10, 15, 20, 25 or 30 years |
| Coverage amount | $50,000+ | $25,000-$250,000 |
| Age availability | 18-75 years old (coverage ends at 95) | 18-75 years old (coverage ends at 95) |
| Application process | Apply through agent; health questions and medical exam required; up to six weeks to process | Apply online; health questions over the phone, no exam; approval can be the same day |
| Available riders |
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AAA whole life insurance
AAA only offers simplified issue and guaranteed issue whole life insurance policies, neither of which requires a medical exam. Both of these have a maximum coverage amount of $25,000.
AAA is a good option if you want permanent life insurance in order to cover final expenses and would have trouble qualifying for traditional coverage, such as if you're a senior or have pre-existing medical conditions.
But its whole life insurance coverage is likely not enough to provide income replacement, give your heirs an inheritance, or cover a large expense for your family, such as college for your children.
Simplified issue whole life | Guaranteed whole life | |
|---|---|---|
| Maximum coverage | $25,000 | $25,000 |
| Underwriting | Health questions; no exam | No health questions or exam; acceptance guaranteed |
| Age availability | 0-80 years old | 45-85 years old |
| AAA membership | Not required for coverage; customers can get discount on other AAA insurance products | Not required for coverage; members will have $60 annual policy fee waived |
AAA simplified issue whole life insurance
AAA's simplified issue whole life insurance policy is fairly standard. Premiums are level until age 100, after which they're not required, and the policy builds cash value at a guaranteed rate over time. As long as you continue to pay premiums, the policy will remain in force, so your beneficiaries will get a death benefit no matter what age you die.
A no-exam whole life insurance policy from AAA can also be customized with riders, depending on your coverage needs:
- Terminal illness: If you're diagnosed with an illness and are expected to have less than 12 months to live, you could get up to 50% of your policy's death benefit while still alive. This rider is included at no cost and can be valuable, as the money can be used to pay hospital expenses incurred due to your illness.
- Child term: You can cover each of your children with up to $5,000 of life insurance.
- Disability waiver of premium: If you become disabled, premiums are waived while coverage remains in place.
- Travel accident: This rider increases the death benefit paid to your beneficiaries if you die while traveling or due to a traffic accident.
- Accidental death: If you die due to an accident, your beneficiary would get a larger death benefit. The payout can be increased by up to $25,000, but this extra amount would not be paid if you died due to something other than an accident, such as an illness.
Simplified issue whole life insurance rates are higher than those you'd pay for fully underwritten coverage, and we wouldn't recommend AAA's policy unless you're concerned about passing a medical exam or need coverage quickly. Though AAA does ask some health questions, an approval decision is typically made within a week, whereas you may need to wait over a month to get approved for whole life insurance with another insurer.
AAA guaranteed issue whole life insurance
For seniors and those with pre-existing conditions, AAA also offers final expense insurance, which is a guaranteed-issue whole life insurance policy. Since there are no health-related questions and you don't have to complete an exam, all applicants between ages 45 and 85 are accepted.
However, coverage is limited for the first two years that the policy is in force. If you die due to something other than an accident during the first two years of coverage, your beneficiaries would only get the sum of premiums paid plus 30% interest.
In addition, rates for guaranteed-issue whole life insurance are typically even higher for the same amount of coverage than those for simplified issue policies. We only recommend AAA's final expense insurance if you need coverage but are unable to qualify for another type of policy.
AAA's guaranteed whole life insurance does offer two unique benefits to your family. After your policy has been in place for at least two years, you and your spouse get a free lifetime AAA membership. And if you add the travel accident endorsement, your beneficiaries would get twice as large a payout if you die while traveling.
AAA universal life insurance
AAA offers two universal life insurance policies: LifeTime and Accumulator. The LifeTime policy is similar to a guaranteed universal life insurance policy. Premiums are guaranteed to remain level over time, and it has lower rates for coverage since it's not designed to accumulate cash value. Instead, AAA's LifeTime universal life insurance is a great consideration if you want permanent coverage in order to leave an inheritance or money for your family to support themselves after you die.
On the other hand, AAA's Accumulator universal life policy has higher rates, greater ability to grow your policy's cash value and more flexibility in how you pay premiums. If you intend to use your life insurance cash value while still alive, or prefer being able to adjust your premiums to fit your financial situation, the Accumulator policy may better fit your needs. But we still recommend comparing rates and terms against those of other companies, as cash value life insurance is quite expensive and it can be costly to change insurers later.
LifeTime Universal | Accumulator Universal | |
|---|---|---|
| Minimum coverage | $25,000 | $25,000 |
| Age availability | 0-85 years old | 0-80 years old |
| Application process | Full underwriting; apply through agent; up to six weeks to process | Full underwriting; apply through agent; up to six weeks to process |
| Premiums | Can remain level until age 100, after which not required | Can be adjusted based upon your cash value and preferences |
| Available riders |
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| Other benefits | Customers can qualify for a discount on other AAA insurance policies. | Spouse gets free AAA membership for life after your death. Customers can qualify for a discount on other AAA insurance policies. |
AAA accidental death
AAA offers multiple accidental death insurance policies, such as its Classic Car Accident Insurance Plan and Member Loyalty Accident Insurance, which are quite similar to each other in coverage. The policies provide a daily benefit to help cover hospitalization, emergency room visits and recuperation if you're injured in an accident.
Accident insurance coverage is guaranteed issue for AAA members 18 and older, meaning you won't be denied and coverage begins as soon as payment is processed, but membership is required in order to qualify. And the amount of coverage you qualify for is determined based upon your years of AAA membership.
You need to opt in to renew your policy each year.
AAA life insurance customer reviews and ratings
AAA Life Insurance Company has a strong financial strength rating, receiving an A, or Excellent, rating from A.M. Best. In addition, the company's NAIC Complaint Index, which shows the number of negative reviews it gets in proportion to its size, is quite good. AAA's Complaint Index was just 0.15, compared to the national median of 1.00.
However, the life insurance company's customer service and claims process have negative reviews, typically from customers who have had trouble with AAA's billing, or beneficiaries that ran into delays when making a claim.
Your experience may vary depending on the agents you work with, but we recommend keeping careful records of premium payments and any contacts with the company if you decide to cancel your policy.
You should also make sure to provide your beneficiaries with all life insurance policy details, as well as info on how to contact and file a claim with AAA, in order to reduce potential problems after your death.
AAA life insurance payments
Payments for AAA life insurance can be made via check, credit card or transfer from a checking or savings account. You can make payments one-off, online, by mail or over the phone, or set up monthly recurring payments by logging into AAA's payment center. In addition to paying your bill, you can also change some AAA policy info online, such as your current address, and access forms related to updating your coverage.
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