American General Life Insurance is now known as AIG. They are a big company in the life insurance industry. In this review, we’ll help you understand what they have to offer so you can decide if they are the best company for you.
We’ll review their history in life insurance, financial ratings, and AIG’s current life insurance policies. You’ll also find out how to compare them to other life insurance companies.
- Brief History of American General Life Insurance
- American General Financial Ratings
- Life Insurance Policies Offered by American General (AIG)
- Qualifying for American General Life Insurance: Underwriting Guidelines
- Comparing American General to Other Life Insurance Companies
Brief History of American General Life Insurance
American General Life Insurance was established in 1826. In 2001, AIG acquired American General.
AIG was founded in Shanghai, China in 1919 and moved to New York City in 1939 due to the Japanese invasion of China during World War II.
In 1923, the founder’s wife, Nelle Vander Starr, was installed as the leader of the company and became one of the first woman executives in the insurance industry and corporate life. Then in 1969, AIG became a publicly-traded stock company.
After the acquisition of American General, AIG moved all of its life products underneath the American General name. Only in the last few years, has AIG rebranded American General into AIG Life.
Is American General a Reliable Life Insurance Company?
A common question that’s raised with our clients is regarding the bailout of American General Life Insurance in 2008, and if American General is a reliable company.
In short, American General and all their policyholders are in great hands. American General Life Insurance Company is a separate entity with a different set of financials than AIG. Industry laws require a set amount of reserves to pay claims and they can’t be commingled with any other entities.
If AIG went down, American General would still be fine.
American General Financial Ratings
We have ranked AIG among our top ten life insurance companies and it is one of the most financially stable insurance companies in the United States.
Here are the ratings for American General:
- A.M. Best: “A” (Excellent)
- Affordability Index: 9.7
- Ease of Applying: 9.7
- Customer Service: 9.6
- COMDEX: 82
A.M. Best is the industry benchmark for financial strength in the life insurance industry. The other three metrics are based on a number of factors including our industry knowledge of American General compared with other companies. The COMDEX ranking is a composite score that considers A.M. Best and other top ratings agencies.
Life Insurance Policies Offered by American General (AIG)
American General, or AIG, currently offers a variety of life insurance options including term life insurance, universal life insurance, variable universal life insurance, index universal life insurance, and whole life insurance.
Term Life Insurance
Term life insurance is temporary insurance designed to protect you and your family. You purchase the coverage amount for a period of time, usually 10, 20, or 30 years. Because it is temporary, term policies tend to be the most affordable life product.
American General’s Select-a-Term product is a unique term product. Rather than selecting a 10, 20, or 30-year term, Select-A-Term allows you to be very specific based on your needs.
Terms start at 10 years, jump to 15, and then you can choose yearly increments all the way to 30 years. You could buy a 19 or 27-year term, for example.
They even offer a 35-year term for people under age 45.
Many people use term life insurance to protect mortgage debt or education expenses for children. Once those expenses are gone, the term policy is no longer needed. If you knew your mortgage would be paid off in 18 years, along with all college expenses, why extend a life policy to a 20 year or 30-year term?
Other features of their Select-a-Term policy:
- Convertible into one of AIG’s permanent policies until you turn 70.
- Broad coverage options from $100,000 and up.
- Once purchased, premiums will not increase throughout the policy term.
- You can keep it after the term ends. Renew it one-year increments until you are 95.
- Riders available: accidental death benefit, child rider, terminal illness rider, and waiver of premium.
QoL Flex Term
For an even more customized term policy, you can look into AIG’s QoL Flex Term Policy.
It is also offered at 10 years, and any single year from 15 to 30, as well as a 35-year term.
This policy has more riders and living benefit options. Accelerated benefits include chronic illness, critical illness, and terminal illness. This means you can borrow cash from the death benefit of the policy to help with expenses if you get ill.
Guaranteed Universal Life Insurance
Guaranteed universal life insurance is a type of permanent insurance. There is no expiration date like there is in a term policy.
AIG’s Secure Lifetime GUL 3 policy is an extremely flexible policy that allows customers 5 ways to access cash while they are still alive.
- 50% Return of Premium in year 20
- 100% Return of Premium in year 25
- AAS Chronic Illness Rider
- Lifestyle Income Solution rider
- Guaranteed cash value accumulation
It also has an Optional Accelerated Access Solution (CI Rider) without permanency requirement and Lifestyle Income Solution. Rider details below.
The cash value in this policy is tied to a money market account. It is a much more conservative investment vehicle, but there is a guaranteed rate of return.
Here are some features:
- Conservative Investment Strategy
- Available for ages 18 to 80.
- The minimum coverage that can be purchased is $100,000.
- Once purchased premiums are fixed and won’t increase. However, you can overpay premiums to build the cash value quicker.
- You can adjust your coverage. Over the life of the policy, you can increase or decrease coverage with underwriting approval.
Guaranteed Issue Whole Life Insurance
AIG’s guaranteed issue policy is for high risk applicants with health issues.
Pre-existing conditions can make it difficult to buy life insurance. If you have high-risk health issues such as diabetes or heart disease, this product is for you. Even former substance abusers can be covered under this plan.
Here are the features of their guaranteed issue policy:
- 2 Year Graded Death Benefit: this means that the full death benefit is not available in the first two years of the policy. Instead, if the person passes away in the first two years, 110% of the premiums paid to that point are returned.
- Coverage Amounts: $5,000 to $25,000
- Age Availability: 50-85
- Chronic Illness Rider: This optional add-on provides a benefit if the policyholder is diagnosed with a chronic illness. 50% of premiums paid will be returned.
- Terminal Illness Rider: This add-on provides 50% of death benefit if the insured is diagnosed with a terminal condition.
This policy is one of the best-guaranteed issue life insurance products on the market because of its low rates. Gerber guaranteed life insurance is another great guaranteed issue policy.
Indexed Universal Life Insurance
The Max Accumulator+ is an indexed universal life policy designed for those with pre-existing medical conditions.
The minimum coverage amount on this Universal Life product is $50,000 and can be purchased between the ages 18-80. This is a “no-exam” policy and you can buy up to $500,000 if you are under 50 years of age.
Other Life Insurance Products from American General
AIG offers several other types of life insurance that we do not cover here. They are less popular but worth mentioning.
They have a variable life insurance policy that has an investment component to it. This type of policy is not recommended for most individuals and requires expertise in financial investing.
They also offer an accidental death insurance policy. Accidental death insurance is similar to guaranteed whole life insurance. It is designed for people with serious medical conditions who do not want to be subject to a medical exam. It is more restrictive in coverage than a whole life policy. The death benefit is triggered only if death occurs from accidental injuries.
This is great stop-gap coverage for those with health insurance. Many times, they will purchase this policy while waiting to be approved for a broader policy.
Qualifying for American General Life Insurance: Underwriting Guidelines
For some people, AIG will be a great fit. For others, your rates will be higher with AIG than other companies. This all depends on their underwriting.
Here are some underwriting tips for their Select-a-Term and Secure LifeTime GUL 3 policies:
- People with anxiety or depression are still eligible for Preferred rates.
- Cigar smokers are still eligible for a non-smoker rating with a negative nicotine urine test, even if you smoke 1 cigar per week.
- They have an expanded standard program that will automatically move a table 2 rating to a standard rating on approved universal life insurance products.
- AIG now uses GenRe for CAD issues and Swiss for all other impairments. This is a big change for AIG.
- No Treadmill Testing
- Foreign National Underwriting – Term (A Countries Only) and permanent products available.
- They offer Healthy Credit Programs to get clients into Preferred categories.
Comparing American General to Other Life Insurance Companies
We understand that it can be intimidating to shop for life insurance. The best advice we can give you is to compare multiple companies before making a purchase.
AIG has great rates for term, guaranteed universal, and guaranteed issue life insurance. However, we still recommend you use our quote tool, or research rates for yourself to compare policies. It could save you hundreds, or even thousands of dollars over the lifetime of the policy.
To review quotes from American General Life Insurance and the other top carriers, use our free online quoting tool, or contact us today. If you’re interested in reviewing other life insurance companies for yourself, see the companies below.