American General, the life insurance brand of AIG, is unquestionably among the top ten life insurance companies in the United States, particularly for individuals seeking an affordable term policy.
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About AIG Life Insurance Company
American International Group (AIG) is a major player in the insurance industry, with over 90 million insureds worldwide. Originally founded by an American living in Shanghai, AIG has operated for over a century and has a strong presence in and outside the United States.
AIG’s subsidiary, American General Life Insurance Company, based in Houston, issues most of the life insurance policies sold by AIG in the US. Another affiliate, The United States Life Insurance Company in the City of New York (US Life), issues policies sold in New York.
In addition to life insurance, AIG offers a wide range of insurance products, including property and liability insurance for real estate, vehicles, and yachts, coverage for valuable personal property items, commercial liability coverage, and other business insurance options. AIG also offers investment options such as mutual funds.
AIG operates through various foreign subsidiaries and is involved in high-profile sponsorships in many locations where it does business, such as golf events in the US, rugby in New Zealand, and sponsorship of art institutions and museums worldwide.
AIG Direct
American General is widely available through life insurance agents throughout the United States. Additionally, AIG offers a direct-to-consumer marketing arm called AIG Direct, which maintains a strong online presence. However, AIG Direct differs from typical online brokers because purchasers work directly with AIG’s in-house agents, usually through phone communication, rather than having their applications processed solely through the website.
Independent life insurance agencies nationwide, including brokers such as the team at IBUSA, also offer AIG policies. Some of these brokers sell policies exclusively online.
Here is the good news: If you are considering AIG, know that the best method for finding the best term life insurance rates available is to use a broker who works with many of the top companies. If AIG isn’t the best option, you can choose a different company based on your unique needs and goals.
American General Life Insurance Ratings
This is one of the most important considerations when considering what life insurance company to choose, as rating agencies take a fine-toothed comb and investigate everything about a life insurance company’s financials.
The conclusion of rating agencies based on their expertise is essential! So, how did rating agencies rate American General Life Insurance, and how do they stack up against other top-rated life insurance companies?
American General Ratings as of September 2020:
- A.M. Best rating: A
- S&P rating: A+
- Moody’s rating: A2
- Fitch rating: A+
- Comdex ranking: 82
AIG was once considered one of the best companies in terms of financial strength and stability. AIG’s life insurance subsidiaries regularly received A++ ratings from A.M. Best, the highest rating. Fitch, Moody’s, and S&P all agreed that AIG was rock-solid.
But then came the financial crisis of 2007-2008, with a record-setting $60 billion quarterly loss triggered by a real estate market crash that exposed an overly aggressive investment strategy.
AIG appeared close to bankruptcy until the Federal Reserve came through with a $180 billion bailout. After restructuring and, hopefully, some soul-searching among AIG’s executives, the company began its fight to regain a once stellar reputation.
By 2013, AIG had repaid the bailout funds.
Today, AIG is again considered a financially sound company, though the “A” score from A.M. Best remains two rankings below the A++ that AIG once flaunted.
Products Offered by AIG Life:
- Term Life Insurance
- Whole Life Insurance
- Final Expense Insurance
- Universal Life Insurance
- Annuities, Mutual Funds, and other investment options.
American General Life Lab Scoring
“Lab scoring” is unique to AIG Life. It is a method they use to determine who will get the preferred ratings. The Lab Scoring system has its pluses and minuses. You may do well on your blood and urine work but then have a negative lab score – this could cause you to lose your rate class. On the flip side, if you are on the cusp of a good rate class, a positive lab score could push you up to the better rate class.
Life Insurance Policies Offered by AIG Life
Term Life Insurance
AIG offers two basic term policies: Select-A-Term and QoL (“Quality of Life”) Flex Term. Both policies provide “level-term” coverage, with fixed premiums throughout the initial term. The minimum coverage level in both cases is $100,000, and the maximum is $10 million.
AIG generally requires a medical exam as part of the application process and does not offer a no-medical exam life insurance policy. However, accelerated underwriting is available for select applicants ages 18-50 on face amounts up to $499,999.
Applicants between ages 20 and 80 can purchase AIG’s term policies, though the longer term lengths are unavailable for older applicants.
Policies are renewable annually through age 95, subject to premium increases upon renewal. Or, policyholders can take advantage of a built-in conversion option, which allows term coverage to be converted into a permanent policy until the insured’s 70th birthday.
Select-A-Term allows new insureds to choose from 18 different initial term lengths, up to as long as 35 years.
If you opt for a term of at least 20 years and at least $100,000 in coverage, AIG offers a return-of-premium (ROP) rider. When the ROP rider is purchased, the policyholder receives a complete refund of all premiums paid upon the conclusion of a policy’s term.
QoL Flex Term includes a living benefits rider that lets the policyholder accelerate policy proceeds in the event the insured is diagnosed with a terminal illness (less than 24 months to live), a chronic disease (lasting impairment of activities of daily living), or critical illness (one of several severe conditions such as significant heart problems or cancer).
Permanent Life Insurance
AIG also offers an array of permanent life insurance policies.
Guaranteed-Acceptance Whole Life:
AIG’s Guaranteed-Acceptance Whole Life policy requires no medical exam or other health screening.
New insureds between the ages of 50 and 80 looking for final expense insurance can purchase coverage of $5,000 to $25,000, regardless of their current health status.
Like most guaranteed-issue life insurance policies, AIG’s version has a two-year waiting period. If death occurs during the initial two years after issuance, a policy pays out 110% of the premiums paid to date. If death occurs after the waiting period ends or from a qualifying accident during the waiting period, the beneficiary receives the policy’s entire face value.
Universal Life Insurance
AIG has eight different policies that fall under the universal life grouping, including index, guaranteed, and variable UL options. The index UL policies (Value+ Protector and Max Accumulator+) are generally available for new insureds up to age 80, with a minimum coverage of $50,000.
AIG’s UL offerings mostly use the flexible premium and benefit structure that generally characterizes universal life. However, individual policies vary in how much they focus on cash-value accrual vs. death benefit, optional riders, and policy growth measurement.
The indexed policies tie growth to the S&P or another equity index, subject to a participation rate (the percentage of growth credited to the policy) and a cap rate (the maximum growth rate to be credited). Variable UL bases growth on the performance of investment options selected by the policyholder from among options provided by AIG. Some policies provide for fixed-rate growth for some or all of cash value.
AIG’s QoL series of UL policies are built to emphasize living benefits—such as long-term care benefits—included within the policies via one or more riders. AIG also offers a survivorship policy, which covers two insureds and pays out upon the death of the second.
AG Secure Lifetime GUL 3: This universal life policy accumulates cash value and has estate planning protection.
AG Secure Survivor GUL II: Survivorship universal life insurance covers two people simultaneously. When the first dies, the other receives the death benefit. This is an excellent choice for couples.
Elite Index II and Survivor Index II: This flexible plan empowers the insured to be more involved in the investment process.
AG Platinum Choice VUL is a variable universal insurance policy. The insured can invest the policy’s cash accumulation value to earn more money.
Available Life Insurance Riders
Terminal Illness Rider: If the insured is diagnosed with 24 months or less to live, the policyholder can elect to receive up to half of the policy’s proceeds early, with any accelerated amounts deducted from the future death benefit.
Accidental Death Rider: If the insured’s death results from a qualifying “accident” before the insured’s 70th birthday, this rider provides a supplemental death benefit up to $250,000 (or up to the policy’s death benefit if it’s less than $250,000).
Children’s Insurance Benefit Rider: This rider provides up to $25,000 in secondary-term coverage for the insured’s children. The coverage lasts until a covered child’s 25th birthday.
Waiver of Premium (Disability): If the insured becomes disabled for at least six months before reaching
AIG Life Insurance Pros
Underwriting for High-Risk Applicants
If you are a high-risk life insurance applicant, AIG Life may be a great life insurance company. They are great for underwriting policies for people with health problems that generally make it difficult to get affordable life insurance.
Those with diabetes, chronic illnesses, autoimmune, sleep apnea, and more might find AIG Life to be suitable for them. If you are a recreational marijuana smoker, AIG Life is also great.
AIG Life Insurance Potential Cons
Though we are big fans of American General, nobody is perfect. One drawback is that AIG Life is but one company of many. Although AIG is a solid company, there are times when a different company will be better suited to meet your specific needs, health, and life.
Must Take an Exam
One drawback is the lack of simplified long-term life insurance options. No exam life insurance is a significant plus for clients on the move or who wish to avoid an invasive medical exam. Unfortunately, AIG does not currently offer a competitive no-exam term policy.
Final thoughts…
AIG can be a great life insurance company for specific individuals based on their needs and circumstances. For instance, AIG has been recognized for its competitive rates on term life insurance policies, making it a good option for those looking for affordable coverage. Additionally, AIG is known for its underwriting flexibility, which means it may be more willing to insure individuals with pre-existing medical conditions or those who engage in high-risk activities.
However, it’s essential to remember that numerous life insurance companies are on the market, each with unique strengths and weaknesses. Without first shopping all of your options, you may miss out on finding the best company for your situation.
That’s why speaking with a knowledgeable agent who can help guide you through selecting the right life insurance policy is essential. By providing information about your health, lifestyle, and financial situation, an agent can help you identify which companies may best suit you. From there, you can compare policies and rates to ensure you get the most value for your money.
Ultimately, while AIG may be an excellent option for some, it’s essential to shop around and consider all your options before making a decision. That way, you can have peace of mind knowing that you’ve found the best life insurance policy for your needs.
