When it comes to finding the best life insurance policy for you or a loved one, it’s important to remember that while one insurance company may be the “best” fit for one person, that doesn’t necessarily mean that they’ll also be the “best” fit for someone else.
This is because…
Not everyone will have the same needs that they’re looking to have fulfilled by their insurance, but also because not all life insurance companies will utilize the same underwriting guidelines. This is why we wanted to take a moment and provide you with a brief background of who American United Life is and discuss a few policy options they offer so that you can get a better idea if they may be the right company for you.
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With this in mind…
We should not that AUL is not known for their no exam life insurance policy options. So, if you are looking to get quick and easy coverage without having to take an exam, AUL might not be the best choice.
Secondly, we have found that, in general, AUL’s term life insurance rates are not as competitive as many other companies. So, if your goal is to find the most affordable term policy, you might want to look at other options.
About American United Life Insurance
Indiana-chartered American United Life Insurance Company (“AUL”) was formed in 1936, following a merger of two existing insurers, American Central and United Mutual. The older of the two, United Mutual, has roots stretching back all the way to 1877.
Today, AUL is wholly owned by its parent company OneAmerica Financial Partners, Inc. From its Indianapolis headquarters, OneAmerica operates a financial services group that, along with principal life insurance carrier AUL, also includes State Life Insurance Company and Pioneer Mutual Life Insurance Company (and a few others).
In addition to being a fairly big name in the financial services industry, OneAmerica is also known as one of the more high-profile sponsors of the Indianapolis Colts NFL team.
As a mutual insurer, AUL does not have stockholders. Instead, the company is collectively owned by its policyholders. From the customer perspective, the biggest advantage of the mutual company model is that certain policies are eligible for dividends—portions of the company’s annual profits distributed to policyholders.
American United markets life insurance through independent agencies throughout much of the U.S., though its network of agents is smaller than many comparable companies. AUL issues life insurance policies in every state but New York.
American United Life Financial Ratings
A.M. Best: A+
Comdex Ranking: 95
American United Life earns very respectable scores from the major ratings groups and ranks as a top rated carrier. Its 95 rating from Comdex puts it in the top ten percent among U.S. life insurers, and the A+ score from A.M. Best barely misses the highest possible grade. All in all, AUL policyholders stand a very low risk of non-payment of policy benefits, making AUL a safe bet in terms of financial stability.
AUL’s financial strength is undergirded by its association with OneAmerica. OneAmerica boasts over $2 billion in annual revenue, over $50 billion in assets, and a sales volume that has consistently increased through recent years.
American United Life Consumer Ratings
AUL has been accredited by the Better Business Bureau since 1993 and currently earns an A+ rating, BBB’s highest score.
While online reviews of the company provide only a small sample size, available ratings generally seem to be more positive than what you typically see with comparably sized life insurers.
OneAmerica also reports an annual customer retention rate comfortably above 90%, suggesting that existing AUL policyholders are mostly satisfied by the company’s services.
One potential downside of AUL from a customer-service standpoint is that the company’s agent network is a little smaller than with many national life insurers. This can make identifying a local agent more difficult for prospective policyholders who reside outside of the regions AUL focuses on.
Overall, American United’s consumer life insurance policy premiums also seem to average a little higher than other insurers offering similar life insurance products.
Along with the individual and group life insurance and annuities offered through AUL, State Life, and Pioneer Mutual, OneAmerica companies offer employee-benefits and retirement-plan administration, securities, and long-term care plans. AUL makes available long-term disability and group life policies for its business clients.
While American United sells whole life, term life, and annuities, it does not offer a universal life policy. However, an affiliated company, OneAmerica Securities, markets variable life insurance and annuities, along with mutual funds and securities.
Another OneAmerica company, State Life Insurance, offers a whole life policy oriented toward long-term care. State Life’s long-term care plan lets policyholders accelerate a policy’s death benefit to cover the insured’s long-term care costs, if needed, and comes with several available premium structures.
Life Insurance from American United Life:
AUL Whole Life Insurance:
AUL’s whole life policies offer the standard features policyholders expect from whole life. Coverage is guaranteed to stay in place for life (or as long as premiums are paid). Premiums are locked for life and guaranteed not to increase as the insured ages.
Whole life policies gradually accrue cash value that earns interest at guaranteed rates, regardless of market conditions. And cash value can be tapped through withdrawals or policy loans.
If a policy is surrendered, its cash surrender value can be received via a lump sum or annuitized and paid out via regular payments, including interest, over a period of years.
Participating Whole Life
As a mutual company, AUL offers participating whole life policies that earn policyholder dividends. Though dividends are based on the company’s performance and not guaranteed (they never are), AUL’s solid track record financially has made dividends a consistent benefit for its whole life policyholders.
AUL whole life policies are available with several optional riders, allowing for some policy customization.
Notable riders include an accelerated-benefit terminal illness rider, which allows for early payment of death benefits if an insured is diagnosed with less than 12 months to live.
Policyholders can also select a paid-up additions rider providing the contractual right to purchase paid-up additions during the life of a policy. Paid-up additions increase a policy’s overall death benefit and cash value immediately and require only a single payment at the time of purchase.
A popular approach for the infinite banking crowd is to apply policy dividends toward the purchase of paid-up additions.
AUL Term Life Insurance:
American United offers level term life insurance policies with initial term lengths of 10, 15, 20, or 30 years. Term life policies generally allow for significantly higher coverage amounts than what could be obtained from a whole life policy with the same premium amount.
However, term policies have no cash value, are not eligible for dividends, and do not result in any payout if the insured outlives the term.
Because AUL’s policies are “level term,” the premiums are fixed when a policy is issued and will not increase during the policy’s initial term.
When an American United term life policy’s initial term concludes, the policyholder has the option of renewing coverage annually for up to five years.
Upon each yearly renewal, the policy’s death benefit decreases. Further renewal is no longer permitted five years after the expiration of a policy’s initial term.
Though term life policies do not provide guaranteed-for-life coverage, American United’s Premier Term policy comes with a conversion option that gives the policyholder the right to convert the term coverage into a whole life policy, without additional underwriting.
Conversion can be a good option for policyholders who need lower premiums up front but want the long-term benefits that come with permanent coverage.
Life Insurance for Businesses:
A significant portion of American United’s life insurance business is marketed to employers. AUL offers a group term coverage plan, allowing multiple employees of the same employer to obtain term coverage through a single plan—usually with lower premiums than is available with individual consumer policies.
AUL also has policies designed to help with business continuity, such as “key person” policies that provide a business with coverage in the event of the loss of a critical employee.
And permanent policies are also available that are designed to build value intended to fund long-term employee compensation.