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AAA Life Insurance Review
AAA Life Insurance Company requires no medical exam for some of its whole life insurance products. But unless you’re in excellent health, you're going to pay a lot due to higher-than-average premiums.
Published April 1, 2020|11 min read
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AAA Life Insurance Company
THE GOOD
Wide variety of term, whole, and universal products
No medical exam for simple whole life or guaranteed issue
Temporary coverage for some policies
AAA members can receive discounts
Lots of info on website
THE BAD
Very high monthly premiums
Whole life products cap at $25,000
Average turnaround time for most policies
Most policy changes can’t be done online
THE BOTTOM LINE
AAA Life Insurance Company, separate from the AAA home and auto company, provides a wide range of term, whole, and universal life insurance products, several of which don’t require a medical exam or waiting time. If you need to pay for burial funds or find coverage quickly give AAA a shot. Be careful though -- you’re going to pay a lot for it.
AAA is number 11 on Policygenius' list of the best life insurance companies, based on cost, financial confidence, third-party customer ratings, life insurance policy options, and ease of application.
1.0
9.0
7.1
8.9
7.5
AAA LIFE INSURANCE COMPANY SPOTLIGHT
N/A
J.D. Power Rating
A trusted customer satisfaction and product quality research agency
A+
BBB Rating
A nonprofit organization focusing on marketplace trust and product quality
A
A.M. Best
100-year-old U.S. credit rating agency focused on the insurance industry
The Details
The Good
Wide variety of term, whole, and universal products. AAA offers multiple fully underwritten and simplified term life, whole life, and universal life insurance products for customers to consider. Most of them can be customized with a decent range of riders and different features as well.
No medical exam for simple whole life or guaranteed issue. AAA’s simplified and guaranteed whole life policies don’t require a medical exam, so if you’ve had trouble applying for life insurance in the past or have pre-existing medical conditions then these may be worthwhile options. However, the face amount for these products is lower than the others at only $25,000.
Temporary coverage for some policies. During the policy approval process, AAA customers will get temporary coverage for either a few days or a few weeks, depending on the product they choose.
AAA members can receive discounts. If you're a member of AAA already, then you can save on the monthly premiums for your life insurance, depending on the policy.
Lots of info on website. AAA has an easy-to-navigate website with detailed information for each product. There’s also a FAQ, a blog, and portal where members can pay their bill online.
The Bad
Very high monthly premiums. Unless you’re in “excellent” health, the monthly premiums for AAA’s term life insurance products are higher than the industry average. However, they do remain level, or fixed, so they won’t change unless you renew your policy.
Whole life products cap at $25,000. AAA’s whole life policies don’t require medical exams, but the payouts will be much less than their other products. For that reason, you should only consider AAA’s whole life insurance if you don’t qualify for term life.
Average turnaround time for most policies. Most AAA policies will take anywhere from one to six weeks to activate, which is about average for most life insurance carriers.
Most policy changes can’t be done online. If you want to change your beneficiary, name, or anything you’ll have to print out a PDF form and mail or fax it over to AAA, which isn’t very convenient.
The Breakdown
AAA is a very expensive option for term life insurance. Rates always depend on many factors such as age, gender, health, and location, but unless you’re in excellent health, you’re going to pay a higher-than-the-average amount for monthly premium costs.
Using AAA’s online quote tool, we gathered sample quotes for Traditional Term life insurance for a non-smoking male in “good” health living in California applying for a 20-year term with $500,000 of coverage. AAA lets applicants choose Excellent, Good, or Fair health, which changes the quote result.
Here’s the breakdown:
| AGE | AAA AVERAGE | INDUSTRY AVERAGE |
|---|---|---|
| 20s | $35.20 | $28.02 |
| 30s | $38.28 | $32.06 |
| 40s | $83.16 | $60.97 |
| 50s | $209.44 | $152.00 |
| 60s | $659.56 | $504.29 |
AAA prices are much higher than the industry average, at least for $500,000, 20-year policies for people in “good” health. For comparison, AIG offers an average rate of $25.34 for a healthy male in his 20s for a $500,000, 20-year policy.
AAA’s own site says the monthly premium for a $500,000, 10-year Traditional Term policy for a non-smoking woman, age 35, would be $14.65. We tried replicating that quote and got $16.28, perhaps because we used California as our state.
AAA members can save 10 percent on their premiums. There may be additional discounts, but members will need to ask their agent for details.
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To see if AAA Life will be able to pay the face amount, or death benefit, at the end of a policy’s term it’s important to look at the company’s financials. Thankfully, there are industry experts that can provide that kind of information.
Here’s the breakdown:
Number of policyholders: 1.4 million
Year founded: 1969
A.M. Best: A
Moody’s: N/A
Standard & Poor’s: N/A
Oh. Not much available, is there? Nope, AAA is not rated by the financial analysis firms Moody’s or Standard & Poor’s .
A.M. Best , a credit rating firm that specializes in the insurance industry, gives AAA an A. That basically means AAA has an “excellent ability” to meet the obligations of its customers.
According to their site, $1.4 billion worth of claims have been paid.
While there aren’t a lot of ratings from the industry experts, customers have stepped in to rate AAA. They seem mostly satisfied, with some exceptions.
BBB: A+
Consumer Affairs: 3 / 5
Consumers Advocate: 4 / 5
J.D. Power: N/A
NAIC complaint index: 1.32
The Better Business Bureau , which grades companies based on their advertising and customer complaints, gives AAA an A+ rating. As of March 2020, there are just over 20 customer complaints with about half of them resolved and an overall 1-star rating based on six customer reviews.
Consumers Advocate , which focuses on a company’s reputation, policies, and stability, gives AAA a four out of five, which translates to “very good” from the reputable website.
Consumer Affairs lets customers directly review and rate companies. Their scores come out to a respectable 3 out of 5. Several commenters complain of difficulty receiving death benefits, sudden price hikes to premiums, and poor customer service.
J.D. Power , which ranks insurance companies based on policies, price, and the clarity of billing and policy information, did not include AAA in its 2019 U.S. Life Insurance Satisfaction Study.
The National Association of Insurance Commissioners (NAIC) , which tracks complaints submitted to state insurance departments, rates AAA a 1.32 on their complaint index. A score of 1 represents the baseline average, and a zero means there weren’t enough customer complaints to count. AAA has an ever-so-slightly above-average amount of complaints.
AAA has several term, whole, and universal products available. They offer accident and annuity policies as well.
Term Life Insurance
AAA offers a few term life insurance products, including Traditional, Express, and Term with a Return of Premium.
Monthly premiums for all of AAA’s term life products are guaranteed to stay level until the term period ends. The premiums increase each year after that.
There may be a wait of one to six weeks before there’s a decision for all these products, but AAA does offer temporary coverage.
Traditional
The Traditional route touts terms of 10, 15, 20, 25, or 30 years, with coverage that could range between $50,000 to over $5 million depending on your age, gender, location, and health status. A medical exam is required, and those between the ages of 18 and 75 are eligible to apply by calling a AAA agent. Coverage ends at age 95.
Temporary coverage
AAA offers one to six weeks with coverage while you wait for the Traditional term life policy to be approved.
Available riders
AAA’s Traditional policy is the only term product that includes optional riders.
Accelerated death benefit. This guarantees up to 50 percent of the insured’s death benefit (up to $250,000) if the insured is diagnosed with a terminal illness. This is included with the plan.
Child term. Parents can add this to cover any current or future children for an extra premium. It will provide a small death benefit in case of the death of a child.
Disability waiver of premium. If you become permanently or temporarily disabled, then this will waive your premiums so your policy won’t expire.
Return of premium. Add this and you can get your money back if the policy expires and you’re still alive.
Express
Shoppers can apply for AAA’s ExpressTerm package in as little as 10 minutes online by answering a few health-related questions, although a medical screening may still be required. You can select term lengths of 10, 15, 20, or 30 years, with coverage between $25,000 and $500,000. Those 18 years up to 75 years are eligible.
There are no riders available for ExpressTerm except for an accelerated death benefit, which guarantees up to 50 percent the payout (up to $250,000) if the insured is diagnosed with a terminal illness.
Return of Premium
This term life product offered by AAA is a return of premium package, which lasts a set period of time and then expires, like normal term life. However, unlike other types, this one lets shoppers receive their money back at the end of the term if they survive.
Term limits are 15, 20, 25, or 30 years, with a coverage range of $100,000 to over $5 million. Eligible ages may vary, and coverage ends at age 95. Premiums stay the same until the term period ends, then monthly rates increase each year.
There are no riders available on this product either, but the policy is convertible to a permanent plan.
The Return of Premium package does have a cash value component, but we typically advise investing that money in something else like an IRA.
Policy conversion
Traditional, Term, and Return of Premium customers can convert their term policy to a permanent one up to the end of the initial term period or until the policy anniversary after their 65th birthday, whichever comes first.
Permanent Life Insurance
AAA offers four main permanent life products: Whole Life, Simple Whole Life, Guaranteed Issue Whole Life, Lifetime Universal, and Accumulator Universal. They each have different features and riders.
Whole Life
This policy has a coverage range of $5,000 to $75,000, and it has a cash value component that builds over time. Premiums stay fixed unless the policyholder turns 100, then payments are waived. Applicants aged 18 to 85 years old will have to answer health-related questions and may have to go through a medical exam.
Temporary coverage
AAA offers one to six weeks with coverage while you wait for the Whole Life policy to be approved.
Available riders
Accelerated death benefit. This guarantees up to 50 percent of the insured’s death benefit (up to $250,000) if the insured is diagnosed with a terminal illness. This is included with the plan.
Accidental death. This rider provides extra death benefits if the policyholder dies due to an accident. The payout amount will vary.
Child term. Parents can add this to cover any current or future children for an extra premium. It will provide a small death benefit in case of the death of a child.
Disability waiver of premium. If you become permanently or temporarily disabled, then this will waive your premiums so your policy won’t expire.
Return of premium. Add this and you can get your money back if the policy expires and you’re still alive.
Travel accident. This pays extra benefits in case the policyholder dies or is seriously injured in an accident while traveling.
Simple Whole Life
This product, meant to cover final expenses, has a coverage range of $5,000 to $25,000. There is a cash value component that builds over time. People aged 15 days to 80 years old are eligible and they will have to answer health questions. AAA members may qualify for auto and home discounts.
There is no medical exam required.
Available riders
Accelerated death benefit. This guarantees up to 50 percent of the insured’s death benefit (up to $250,000) if the insured is diagnosed with a terminal illness. This is included with the plan.
Accidental death. This rider provides extra death benefits if the policyholder dies due to an accident. The payout amount will vary.
Child term. Parents can add this to cover any current or future children for an extra premium. It will provide a small death benefit in case of the death of a child.
Disability waiver of premium. If you become permanently or temporarily disabled, then this will waive your premiums so your policy won’t expire.
Return of premium. Add this and you can get your money back if the policy expires and you’re still alive.
Travel accident. This pays extra benefits in case the policyholder dies or is seriously injured in an accident while traveling.
Temporary coverage
AAA offers five to seven days of coverage while customers wait for Simple Whole Life approval.
Guaranteed Issue Whole Life
This is a guaranteed acceptance product, which is typically for seniors who can’t get qualified for traditional life insurance. Also meant to cover burial expenses, this policy has a coverage range of $5,000 to $25,000. Rates stay fixed until the insured turns 100, then premiums are waived.
There’s also a cash value component that builds over time. People aged 45 days to 85 years old are eligible, though they have to apply by phone or mail. AAA members may qualify for auto and home discounts.
There are no health questions and there is no medical exam required.
Available riders
Graded benefit. If the policyholder dies in the first two years, beneficiaries will get the level monthly premiums paid back, plus an additional 30 percent. If death happens after two years, then the total death benefit is paid.
Lifetime membership benefit. The insured’s surviving spouse gets a free lifetime AAA membership, with dues paid by AAA.
Travel accident. A rider that doubles the death benefit if the policyholder dies due to a covered accident.
Temporary coverage
Coverage starts as soon as the first payment is processed.
Lifetime Universal Life insurance
This is a universal life insurance policy, so it’s possible to adjust your death benefit and monthly premiums whenever you want during the policy based on your financial situation. It also has a cash value component you can use towards your premiums.
The coverage can range from $100,000 to over $5 million. Anyone between 15 days and 80 years old can apply through an agent, though they’ll have to answer health-related questions and may have to go through a health screening. AAA members may qualify for auto and home discounts.
Available riders
Accelerated death benefit. This guarantees up to 50 percent of the insured’s death benefit (up to $250,000) if the insured is diagnosed with a terminal illness. This is included with the plan.
Accidental death. This rider provides extra death benefits if the policyholder dies due to an accident. The payout amount will vary.
Child term. Parents can add this to cover any current or future children for an extra premium. It will provide a small death benefit in case of the death of a child.
Disability waiver of premium. If you become permanently or temporarily disabled, then this will waive your premiums so your policy won’t expire.
Guaranteed increase option. This lets the policyholder increase the coverage amount without having to go through a medical exam.
Return of premium. Add this and you can get your money back if the policy expires and you’re still alive.
Travel accident. This pays extra benefits in case the policyholder dies or is seriously injured in an accident while traveling.
Yearly renewable term life. This is an additional death benefit you can add to the policy, but the premium increases each year as insurance risk grows with age.
Temporary coverage
AAA offers one to six weeks of coverage while waiting for Lifetime Universal approval.
Accumulator Universal life insurance
Similar to the above policy, except you can customize your monthly premiums and death benefit based on your budget and goals. Once again, it’s possible to adjust your death benefit and monthly premiums based on your financial situation. There’s also a cash value component you can use to pay your premiums or supplement retirement funds.
The coverage ranges from $100,000 to over $5 million. Anyone between 15 days and 80 years old can apply through an agent. They’ll have to answer health-related questions and may have to go through a health screening. AAA members may qualify for auto and home discounts.
Available riders
Accelerated death benefit. This guarantees up to 50 percent of the insured’s death benefit (up to $250,000) if the insured is diagnosed with a terminal illness. This is included with the plan.
Accidental death. This rider provides extra death benefits if the policyholder dies due to an accident. The payout amount will vary.
Child term. Parents can add this to cover any current or future children for an extra premium. It will provide a small death benefit in case of the death of a child.
Disability waiver of premium. If you become permanently or temporarily disabled, then this will waive your premiums so your policy won’t expire.
Guaranteed increase option. This lets the policyholder increase the coverage amount without having to go through a medical exam.
Return of premium. Add this and you can get your money back if the policy expires and you’re still alive.
Travel accident. This pays extra benefits in case the policyholder dies or is seriously injured in an accident while traveling.
Yearly renewable term life. This is an additional death benefit you can add to the policy, but the premium increases each year as insurance risk grows with age.
Temporary coverage
AAA offers one to six weeks of coverage before Accumulator Universal approval.
AAA’s website has all the information you could want for all your life insurance needs. You’ll find PDF brochures with coverage ranges, issue ages, and rider information clearly laid out.
The customer service phone line is similarly helpful with polite, professional representatives in our experience. All our questions were answered swiftly, with no waiting or transferring between multiple departments.
There is no live online chat available on the website, but you can email or call customer service.
State availability
AAA Life is available in every state, including Alaska and Hawaii, except for New York.
Application length
You can apply for most AAA policies within minutes.
Turnaround time
You’ll have to wait one to six weeks for most policies, but it depends on whether a medical exam is required or not, as well as other factors.
Policy delivery
AAA Life will deliver the policy electronically and via mail.
Change method
Address changes can be done online or over the phone or by mail. All other changes, including beneficiary changes, name change requests, and policy cancellations, need to be made in writing or by mailing in PDF forms that are available on AAA’s website.
Payment methods
There are multiple ways to pay your AAA life insurance bills.
Autopay: Set up automatic payments either online or by phone.
Phone: Use a credit card or check to pay over the phone.
Credit cards accepted: American Express, Discover, MasterCard, Visa.
There’s a grace period of at least 31 days from the bill’s due date, though it varies by policy.
Digital tools
There’s not much in the way of digital tools from AAA beyond the coverage calculator and online quote tool.
Claims documentation
To file a benefits claim, the beneficiary must email, fax, or snail mail the following information to AAA :
Name, phone, address
Policy number
Certified death certificate
Obituary (if available)
Coroner’s and police report (if applicable)
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