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AIG American General Life Insurance Review [Updated for 2023]

AIG Life Insurance Review

AIG’s life insurance brand, American General, is definitely one of the top 10 life insurance companies in the U.S., particularly for anyone interested in an affordable term policy.

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About AIG Life Insurance Company

Two companies you may have heard about: American General Life Insurance and The United States Life Insurance Company are both under a larger company named AIG.

With over 90 million insureds throughout the world, American International Group (“AIG”) is a giant within the insurance industry.  Now headquartered in New York, AIG was originally founded by an American living in Shanghai.  The AIG family of companies has been operating in and outside the U.S. for more than a century.

Most AIG life insurance policies sold within the U.S. are issued by AIG subsidiary American General Life Insurance Company, which is based in Houston.  New York policies are issued by another affiliate, The United States Life Insurance Company in the City of New York (“US Life”).

Through various other foreign subsidiaries, AIG sells insurance in about 80 other countries and is also involved in high-profile sponsorships in many of the locations where it does business.  To name just a few, AIG sponsors golf events in the U.S., rugby in New Zealand, and art institutions and museums around the globe.

Life insurance is one of AIG’s major sectors, but it sells a lot more than just that.  The company’s many offerings include (but are not limited to) property and liability insurance for real estate, vehicles, and yachts; coverage for valuable personal property items; commercial liability coverage and a host of other insurance options for businesses; and numerous investment options like mutual funds.

AIG Direct

American General is sold by life insurance agents all across the U.S. However, AIG also has a direct to consumer marketing arm, named AIG Direct.

Although AIG Direct maintains a significant online presence, it isn’t really an “online broker” like some direct-to-consumer affiliates because purchasers are working with AIG’s in-house agents—usually communicating over the phone—rather than having applications processed through the website.

AIG policies are also available through independent life insurance agencies around the country, including some brokers such as the team at IBUSA who do sell policies exclusively online.

Here is the good news, if you are considering AIG, know that when looking the best term life insurance rates available the best method is to use a broker who works with many of the top companies. That way, 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 looking at 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 ratings agencies based on their expertise is important! 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

There was a time when AIG was considered one of the best-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 available.  Fitch, Moody’s, and S&P all agreed that AIG was rock-solid.

But then came the financial crisis of 2007-2008, and with it 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 a restructuring and hopefully some soul-searching among AIG’s execs, the company began its fight to regain a once stellar reputation.

By 2013, AIG had repaid the bail-out funds.

And, 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 something that 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 & urine work but then have a negative lab scoring – this could cause you to lose your rate class. On the flip side, if you are on the cusp of a good rate class, then a positive lab score could actually 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.  In both cases, the minimum coverage level is $100,000, and the maximum is $10 million.

AIG generally requires a medical exam as part of the application process and is not currently offering a no medical exam life insurance policy, although accelerated underwriting is available for select applicants ages 18-50 on face amounts up to $499,999.

AIG’s term policies can be purchased by applicants between ages 20 and 80, 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 illness (lasting impairment of activities of daily living), or critical illness (one of several serious 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 does not require any medical exam or other health screening.

New insureds looking for final expense insurance between ages 50 and 80 can purchase $5,000 to $25,000 in coverage, regardless of their current health status.

Like most guaranteed-issue life insurance policies, AIG’s version comes with a two-year waiting period.  If death occurs during the initial two years after issuance, a policy pays out 110% of the premiums paid in 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 minimum coverage amounts of $50,000.

AIG’s UL offerings mostly use the flexible premium and benefit structure that characterizes universal life generally.  However, the individual policies vary in the extent to which they focus on cash-value accrual vs. death benefit, optional riders, and in how policy growth is measured.

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/or a cap rate (a maximum growth rate to be credited).  Variable UL bases growth on performance of investment options selected by the policyholder from among options provided by AIG.  And 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.  And 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 is a universal life policy that accumulates cash value and also have estate planning protection.

AG Secure Survivor GUL II: Survivorship universal life insurance covers two people at the same time. When the first dies, the other receives the death benefit. This is a great choice for couples.

Elite Index II and Survivor Index II: This is a flexible plan that empowers the insured to be more involved in the investment process.

AG Platinum Choice VUL: this is a variable universal insurance policy. The insured can invest the policy cash accumulation value in order 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 prior to reaching

AIG Life Insurance Pros

Underwriting for High Risk Applicants

If you are at high risk life insurance applicant, then AIG Life may be a great life insurance company for you. They are really great when it comes to underwriting policies for people with health problems that normally make it difficult to get affordable life insurance.

Those with diabetes, chronic illnesses, autoimmune, sleep apnea, and more might find AIG Life to be right for them. If you are a recreational marijuana smoker, AIG Life is also great.

AIG Life Insurance Cons

Though we are big fans of American General, of course 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 lifestyle.

Must Take an Exam

One drawback is the lack of simplified issue term life insurance options. For those clients on the move or who wish to avoid an invasive medical exam, no exam life insurance is a major plus. Unfortunately, AIG does not currently offer a competitive no exam term policy at this time.

Don’t Miss Out on the Best Life Insurance

The biggest drawback about buying a life insurance policy from AIG Life is simply that you will lose out on what another company has to offer. There are certain life insurance companies that may be more well suited for your specific condition or lifestyle.

Just like AIG Life is great for marijuana smokers, someone else might be better for adventure sport enthusiasts. That’s why when buying life insurance you need to speak with someone who knows the ins and outs of many, many life insurance companies.

If you only speak to a representative of one company, then you’ll only know what they have to offer. Instead, give us a call.

We will gather all we need to know about you and use everything we already know about more than sixty of the best life insurance companies in the USA to find you the very best policy.

We customize our recommendations based on your needs.

We may recommend AIG Life, but then again, if we don’t think they are the very best for you, then we’ll recommend someone who is.

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