When searching for the right life insurance company, a strong reputation and financial stability are top priorities. This USAA Life Insurance Company Review will dissect their offerings, strengths, and potential downsides to see if they rank among the best life insurance companies for you. USAA stands out for its commitment to serving military members, veterans, and their families. But even if you don't have a military affiliation, USAA might still be a contender. We'll explore their term life, whole life, and no-exam policy options, analyze their financial strength, and compare them to other top providers in the market.
USAA Life Insurance Company Review
USAA provides a distinct set of benefits tailored to the needs of those who serve in the military. In fact, out of the 91 insurance companies we analyzed, it was named the best life insurance company for the military. In addition to military-specific benefits, plans are supported by USAA's A++ financial stability rating, and the firm has had minimal complaints. Notably, you do not have to be a member or linked with the military to qualify for USAA life insurance.
Pros and Cons
Pros
- A++ financial stability rating,
- little consumer complaints.
- Guaranteed insurability is provided for no additional cost.
- Injury benefits
- Any time conversion rider is available:
Con:
- No-medical-exam policies are absent.
- There are few policy types available.
USAA Life Insurance Company Overview
USAA was created in 1922 by 25 Army officers who sought to insure each other's vehicles. Since its humble beginnings, this organization has expanded to provide insurance to millions of military personnel. The acronym USAA stands for United Services Automobile Association, and since 2009, USAA has collaborated with military-affiliated organizations to educate veterans, military members, and their families about their financial products and services.
USAA Life Insurance policies offer valuable military-specific benefits to their members at no additional cost, such as coverage during wartime, severe injury benefits, and the ability to add coverage at a later date without proving insurability. Life insurance policyholders may also be eligible for dividends.
| AM Best Rating | NAIC Score (avg.) | Years In Business | Policy Types | Accepts Credit Cards |
|---|---|---|---|---|
| A++ | N/A | 100 Years | Whole, Term, Universal (UL) | No |
Pros & Cons Explain
Pros Explained
A++ financial stability rating: AM Best awards USAA its highest grade, indicating that the company has a superior ability to meet its ongoing insurance responsibilities (in other words, it is likely to pay insurance claims). We analyzed 91 insurance firms, and less than 10% achieved AM Best's top-tier rating.
There are very few consumer complaints: The National Association of Insurance Commissioners (NAIC) tracks insurance complaints and creates a "complaint index" to show how many complaints a company receives in relation to its market share. USAA's NAIC complaint index over three years is 0.177, indicating that it received much fewer complaints than predicted.
Guaranteed insurability is offered at no additional cost: If you buy a Level Term V or Simplified Whole Life policy from USAA, you can apply for additional coverage without having to prove insurability after specific life milestones, such as marriage, home ownership, or having a child. Most insurance companies charge an additional price for a guaranteed insurability rider, however USAA provides the Life Event Option rider for both types of coverage at no cost.
Injury benefits: Active service personnel can enjoy essential advantages at no additional expense, including as wartime coverage and severe injury benefits that provide the policyholder with $25,000 if they experience certain injuries while on duty.
Any time conversion rider is available: You will be able to convert a term insurance to a permanent policy at any time before the conclusion of the term period. This is an especially useful benefit if you can't afford a permanent coverage right now but want to "lock in" your good health so you can qualify for one later on.
Cons Explained
There are no medical examination alternatives available: One of USAA's term products, Essential Term, does not require a medical exam for life insurance coverage. This may be a good feature, except that the premiums rise each year, policies expire at the age of 39, and coverage is restricted to $100,000. Other providers provide no-med-exam term life insurance for up to 40 years, with coverage amounts exceeding $1 million.
There are a few policy types available: USAA offers term and complete life insurance. It does offer a universal life insurance policy through John Hancock, but it does not directly sell universal life insurance, variable universal life insurance, or indexed universal life insurance.
Complaint Index
The National Association of Insurance Commissioners (NAIC) monitors and records the number of grievances filed against insurance firms. This data is used to create a complaint index, which compares the actual number of complaints received to the expected number for a company of its size. A ratio above 1.0 suggests more complaints than average, while below 1.0 indicates fewer. In 2021, USAA had a notably low index of 0.22, showing significantly fewer complaints than anticipated, outperforming peers like Nationwide (0.263), New York Life (0.279), and State Farm (0.295).
Competition USAA Life Insurance
| Insurance Company | Our Coverage Options | 2020 Dividends | Online Application | Our AM Best Rating | Pricing for Term Policies | NAIC Complaint Index |
|---|---|---|---|---|---|---|
| USAA | We offer Whole Life, Term Life, and Universal Life insurance. | We distributed $42 million in dividends. | Available for your convenience. | We are proud of our A++ rating. | Our term policies are rated as excellent. | Our complaint index is 0.22. |
| Allianz | Our coverage includes Index Universal Life insurance. | Dividends were not applicable. | Currently, we do not offer an online application. | Our financial strength is rated A+. | Not applicable for term policies. | Our complaint index stands at 0.31. |
| American Fidelity Life Insurance | We provide Term Life, Final Expense, and Whole Life insurance. | Dividends were not applicable. | Available for ease of application. | Our rating is A-. | The pricing for our term policies is very good. | Our complaint index is notably low at 0.002. |
Third-Party Financial Reliability Ratings
USAA stands out for its financial dependability, a crucial consideration for life insurance that spans many years. It boasts an A++ rating from AM Best, a distinction shared with only nine out of 91 reviewed insurers, including reputable names like New York Life, MassMutual, and State Farm.
Term Life Insurance
Term Life Insurance offers temporary protection for a set period, such as 30 years, and is more cost-effective than permanent options. USAA's offerings include:
- Level Term V: Available for ages 18 to 70, this policy provides $100,000 to $1 million in coverage with unchanged premiums over 10 to 30 years, subject to a medical exam.
- Essential Term: For those 21 to 35, this policy offers a $100,000 benefit until age 39, with the option for annual renewal and increasing rates each year, no medical exam required.
Whole Life Insurance:
This permanent insurance remains active for your lifetime with consistent premium payments, ensuring a guaranteed death benefit and accumulating tax-deferred cash value. USAA also allows for a 20-year payment plan or completion by age 65.
Universal Life Insurance
While USAA doesn't directly offer universal life insurance, it provides access to John Hancock's policies. These offer lasting coverage with adjustable premiums and a cash value, offering flexibility without the risk of immediate policy lapse.
Enhanced Insurance Benefits
Securing Future Insurability
USAA provides two no-cost guaranteed insurability riders that allow policyholders to augment their death benefit without additional health screenings or examinations:
- Term Life Event Option Rider: Available with Level Term V policies, this rider offers a one-time increase in death benefit following significant life milestones such as marriage, parenthood, or home purchase, for those 35 or under. The option expires after a decade or at age 45, whichever is sooner.
- Life Event Option Rider: This rider accompanies USAA’s Simplified Whole Life policy, permitting up to six increases in death benefit, capping at $1 million, and remains valid until the age of 45.
Child Protection Add-On:
The Term Life Insurance for Children Rider can be appended to your policy, providing $25,000 coverage for each child at a monthly cost of $7.99. This rider can transition into permanent coverage as your child reaches adulthood.
Premium Waiver During Disability
USAA's waiver of premium rider is an optional benefit that exempts you from premium payments in the event of a disability.
Early Benefit Access for Terminal Illness
The terminal illness rider, offered at no extra charge, allows early access to a portion of your death benefit if diagnosed with a terminal illness, giving you financial freedom when needed most.
Customer Interaction Channels
Reach out to USAA via phone or mail, with phone support available weekdays from 7:30 a.m. to 8:00 p.m. CT.
- Phone: 210-531-USAA (8722) or 800-531-USAA (8722)
- Mail: 9800 Fredericksburg Rd., San Antonio, TX 78288
Cost Considerations
Comparative studies indicate that USAA's term policies are marginally above the average cost. Nonetheless, the added benefits like guaranteed insurability and injury benefits may justify the investment.
Assessing USAA for Your Insurance Needs:
USAA life insurance is particularly beneficial for military personnel, offering unique advantages such as deployment-ready accelerated issues, wartime coverage, and injury benefits. Non-military individuals may also find value in USAA's offerings, especially with the rare inclusion of no-extra-cost guaranteed insurability riders. However, those seeking extensive coverage without medical exams or specific policy types like universal life insurance may need to explore other insurers.