Last Updated: June 2020
In this review, we will help you determine if USAA is one of the best life insurance companies you can choose by covering products offered, pros & cons, and what other consumers have to say about the company.
- About USAA Life Insurance
- USAA Life Insurance Ratings
- Review of Life Insurance Products Offered By USAA
- What Makes USAA Unique?
- Application Process for USAA Life Insurance is Simple
- Pros & Cons of USAA Life Insurance
- Compare USAA to Other Life Insurance Companies
Life Insurance is Boring. Let’s Get To The Root Of It! Here are the key takeaways…
USAA is most widely known for offering great insurance rates to military families. USAA holds an “A++” (superior) rating with A.M. Best. USAA offers full life insurance coverage to individuals in the military. USAA is a great choice for life insurance, but it’s always best to compare multiple carriers.
About USAA Life Insurance
USAA is a widely known and reputable life insurance company. More specifically, USAA is primarily known, loved, and respected by veterans or active-duty military personnel.
USAA spends a substantial amount of marketing dollars into airing commercials during primetime hours, demonstrating that they offer great insurance products for military families. USAA auto insurance might be more well-known, but don’t be misguided. USAA is still one of the best life insurance companies in the country as well.
They offer several types of life insurance policies to military families and are one of the longer-standing insurance companies currently operating in the United States.
USAA History and Background
USAA is currently based in San Antonio Texas and is considered a Fortune 500 Company. USAA was founded way back in 1922 by a small group of 25 army officers to help provide self-insurance to military personnel who at the time, were deemed to be higher risk individuals.
Since the original founding, USAA has expanded into other services such as banking, auto insurance, home insurance, and financial services products geared towards retirement planning. USAA was initially named the United States Army Automobile Association until later changing its name to the United Services Automobile Association.
Currently, USAA has more than 12 million policies in force and remains one of the top 10 largest insurance provides in the United States.
USAA Life Insurance Ratings
Financial strength ratings can be a great indicator of how liquid an insurance company is and how much the insurance company can fulfill promises to its loyal policyholders. USAA is one of the highest-rated companies available to consumers in this category.
Here are the ratings for USAA Life Insurance:
- A.M. Best: “A++” (superior) rating
- Affordability Index: 9.7
- Ease of Applying: 8.2
- Customer Service: 9.9
- COMDEX Ranking: 99
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 USAA compared with other companies. The COMDEX ranking is a composite score that considers A.M. Best and other top ratings agencies.
Learn more about our process for reviewing life insurance companies here.
These are about as good as it can get for a life insurance company and part of the reason, they find themselves at the top of their game and resting on the Fortune 500 List.
However, the consumer’s opinion is perhaps one of the most critical considerations to keep in mind.
USAA BBB Ratings and Complaints
Currently, USAA is not accredited with the BBB, and no J.D. Power and Associates rankings are available. However, the BBB is providing us some insight into the company. Based on 442 reviews of USAA, they are currently ranked low with a B- rating. This isn’t necessarily a deal-breaker but should be factored into your decision.
In the last three years, USAA has closed more than 1,280 consumer complaints is about average for life insurance companies relative in size to USAA. The complaints seem to focus mostly on billing issues or customer service-related problems.
As far as claims being paid diligently, USAA remains reliable.
Review of Life Insurance Products Offered By USAA
The life insurance products offered by a life insurance provider is likely the second most crucial aspect to consider before ultimately making your decision.
Currently, with USAA, you have the following types of life insurance available to you:
- Whole Life Insurance
- Term Life Insurance
USAA’s Term Life Insurance
USAA term life insurance has several features:
- 10, 15, 20, 25, & 30-year terms available.
- People under 35 can get an additional $100,000 in coverage when they marry, purchase a home, or have a child.
- Option to convert to a permanent life insurance polciy.
- Child protection rider available.
USAA’s Permanent Life Insurance Options
For permanent life insurance, USAA offers a whole life insurance policy and a universal life insurance policy.
Their whole life policy accumulates cash value as you pay your premiums. It also offers you the option to pay premiums for only 20 years, until age 65, or through the lifetime of the policy.
The Universal Life policy is a more flexible permanent product. You have the option to increase or decrease your coverage amount and premiums. You can even skip payments when you need to. However, there are limitations and restrictions on this.
You can also borrow cash from these policies to help cover emergencies.
Riders and Additional Options
USAA does offer a few additions with their life insurance coverage.
For example, USAA will supplement your life insurance coverage in addition to your SGLI Group Life insurance and pay’s 25,000 additional lump sum payment to individuals who are severely hurt but not killed in action.
If you are looking for term or whole life insurance, compare USAA alongside other top life insurance carriers like FEGLI Life Insurance before purchasing a policy.
What Makes USAA Unique?
Only one massively significant factor makes USAA extremely unique. They offer full life insurance coverage to individuals who are currently active duty in the military.
Other life insurance companies simply don’t do this. In fact, other life insurance companies have what’s known at the “War Clause” that would void the contract if you happened to lose your life in action.
Who Should Consider USAA For Coverage?
If you are active-duty military or even retired military, you should definitely get a life insurance quote from USAA.
However, no matter how good a company may seem at first glance and even if you are active-duty military, we always strongly urge you to compare rates with a half dozen life insurance companies. This can help eliminate the chance of being declined for coverage or overpaying for your coverage.
Application Process for USAA Life Insurance is Simple
The application process is straightforward with USAA.
You can begin by visiting the USAA website.
It will begin asking you the normal demographic questions and even throws in some questions about your current military status. After doing so, you can continue to stream through the process and selecting your estimated coverage needed and the duration you are looking to purchase.
After that, you will need to speak to a USAA life insurance agent. From here, it would be your typical qualification call, and the agent can set up your medical exam and underwriting.
USAA has Strict Underwriting
Unfortunately, this is likely the most significant downfall of working with a company like USAA.
They have relatively stringent underwriting guidelines and don’t make for the best option for individuals with health conditions. However, you always need to remain shopping for life insurance even if you have faced a decline.
Switch up your approach and work with an independent agent who has access to more high-risk life insurance companies to help secure coverage for you and your family. Lastly, if it remains a struggle, don’t ignore options such as accidental death or guaranteed issue life insurance
These require no health backgrounds, and some coverage is always better than no coverage.
Pros & Cons of USAA Life Insurance
It’s important to know both the benefits and drawbacks of every life insurance company you consider.
Here are the top 3 pros for choosing USAA.
- Best Option for Military Families
- Competitive Rates on Coverage
- Easy Process to Obtain Quotes and Begin the Application
Here are the biggest downfalls to consider before purchasing life insurance with USAA.
- Stringent Underwriting Guidelines
- Captive Insurance Agency
- Medical Exams are required
Compare USAA to Other Life Insurance Companies
Choosing the right life insurance company can save you $1000’s over the lifetime of a policy. So it’s always important to compare multiple carriers before making a decision. This is the most sure-fire way to get the lowest rates and have the best chance at approvals.
USAA life insurance is a great option, but be sure to compare them to our 10 best life insurance companies or find reviews on over 50 companies and agencies here, before making your decision. You can also fill out our quote tool to compare rates quickly.
Here are some other niche life insurance companies to consider along with USAA.
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