Bank of America Life Insurance Review

Bank of America started out as the Bank of Italy in 1904 in San Francisco. It offered banking services to immigrants and non-wealthy folks who otherwise had difficulty obtaining any banking services.

This was a time when banking existed almost exclusively for the wealthy. After a series of mergers, it became Bank of America in 1930. Antitrust legislation forced it to separate from Transamerica (an insurance company) in the 1950’s.

What Does a Bank of America Have to do with Life Insurance?

In 2013 Bank of America stopped offering accidental death and dismemberment policies to its customers.

They cited wanting to increase focus on serving customers through their specialty, banking.

Prior to that, Bank of America contracted with a 3rd party direct marketing company, Affinion.

Affinion acted as the customer service branch between Bank of America and Monumental Life Insurance Company (now owned by Transamerica) to sell and assist with accidental death and dismemberment policies.

An accidental death and dismemberment (AD&D) policy is different from life insurance.

Although it’s frequently lumped into the same category.

Traditional life insurance will pay out regardless of the cause of death.

Accidental death and dismemberment policies only pay if the death is caused by an accident. Something like a car wreck or a bridge collapsing.

Why Your Bank Keeps Sending You Offers for Life Insurance

Bank of America is not alone in offering life insurance to its consumers or at least selling customer information to marketing companies.

If you have ever received a letter or a phone call offering life insurance, it’s almost a guarantee it isn’t through your bank.

Companies, like previously mentioned Affinion, offer customer appreciation packages to large financial institutions.

They take care of all the customer service, the marketing costs, and the policies on behalf of the bank. All they need is the customer information.

The marketing companies sometimes buy the customer information outright. Other times they may split some of the money they make with the bank instead of buying the information.

The direct marketing agency contracts through one or several life insurance companies to get group rates on accidental death and dismemberment insurance.

What is Accidental Death and Dismemberment Life Insurance?

Dying by an accident is statistically unlikely. Extremely unlikely. Most people pass away from illnesses, which AD&D does not cover.

Most policies will also pay part of the benefit if you lose your sight, hearing, or two limbs. This is the dismemberment portion. It is also extremely unlikely.

Because of how infrequently people file AD&D claims, the insurance companies can afford to offer exceptionally cheap policies. A quarter million dollar benefit may only set you back $10 for the month.By itself, accidental death and dismemberment isn’t particularly helpful. It’s more important to get the other bases covered first, life and disability.

Life insurance will pay out to your family regardless of your cause of death. Whether it’s an accident or illness.

A long-term disability policy will cover a disability, whether it is the loss of a limb or if you cannot work because your chemo treatment is making your too ill.

Accidental death and dismemberment is an extra buffer on top of those two pillars.

If you are looking for accidental death and dismemberment, have your life insurance agent shop the market for you. Many companies with excellent financial ratings offer accidental death and dismemberment life insurance policies, including:

CompanyA.M. Best RatingCustomer Reviews
PrudentialA+4.3 / 5
Mutual of OmahaA+4.0 / 5
AIGA4.1 / 5
TransamericaA3.9 / 5

If you are looking for an accidental death and dismemberment policy, give us a call today to speak with an expert and identify which life insurance policy is best for you and your family.

The Upside to AD&D Plans Through Your Bank

Before you allow your scam alarm to blast on full volume, this practice is not entirely disadvantageous to the consumer. It is also legal.

If you are already on the market for an accidental death and dismemberment policy, it can provide great rates. Because the direct marketing company can buy in bulk from the insurance company the life insurance underwriting process is minimal, and the rates are typically low.

What to Watch Out for with Bank of America

Customer Service

The main concern in a scenario like this is the customer care. When you go directly through an insurance agent, you have a point of contact. If you have questions, they will answer them. If you need to change, cancel, or make a claim, you still have that same person at your service.

When you go through your bank, your bank will give you a contact number for the marketing company. Now, not all marketing companies are the same, but in essence, their job is to make sales instead of building a relationship based on trust. When you call back to the call center, the likelihood of speaking to the same person is small, like any call center.

Getting Your Life Insurance Claim Paid Out

Then there is the additional barrier of having the marketing company as your point of contact instead of the insurance company. At least with the insurance company, you know they want to keep your business so they’ll help you.

With marketing companies, it’s tricky to figure out how they get paid in the whole business. If it’s a one-time sign-up thing, that doesn’t bode well for helpful customer service. If they get paid a part of your premiums over the course of a few years, that also doesn’t bode well if you have to make a claim.

It’s enough to make even the most indiscriminately trusting person a little nervous.

What to Do to Analyze a Life Insurance Policy from Your Bank

The best thing to do if you want to consider a policy through your bank is to request a “specimen contract.” Sometimes people will also call this a “sample contract.” The specimen contract will be a copy of the policy without any of your personal info on it.

If you are comfortable reading the legalese and insurance jargon, compare that to a sample policy from your insurance agent. If that just seems like too much new vocabulary, bring the specimen contract to your insurance agent. They can look through it for you and help explain the policy provisions.

As for Bank of America life insurance? For the time being, Bank of America is no longer working with the affiliates through which they offered this life insurance. This is probably for the best of consumers, as the customer reviews were full of horror stories.

If you have questions on an old policy you still have with them, give us a call. We’re happy to take a look at it for you.  Or if you are considering an accidental death and dismemberment policy or other life insurance products, we would love to speak with you and help identify the best life insurance policy for you and your families needs.

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About Jeff Root

is the owner of rootfin.com. He's an independent life insurance agent who has helped 1,000's of consumers purchase life insurance online and over the phone.

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