AAA Term Life Insurance Review

By Jim Tobin

triple a life insurance

Carrier Highlights

1. Simplified Issue "No Exam" product Available.

2. Well Known Brand Due To Association With AAA Automobile Club

3. Not easily shopped against others due to proprietary quoting tools.

A.M. Best

Fitch

Moody's

S&P

"A"

N/A

N/A

N/A

LIHD Star Rating 

AAA Life Insurance Company Review

The American Automobile Association (AAA or triple A) was founded in 1902. However, its life insurance division, spawned as a complementary product to the auto insurance  it already marketed was introduced in 1969.

Between term insurance, universal life policies and small whole life policies designed for funeral expenses, AAA  has a million policyholders in the United States.

So, while still primarily known for its roadside assistance and  travel services, its life insurance products are worth a look,

This AAA life insurance review will concentrate primarily  on AAA term life insurance. If you'd like to see more about universal life or AAA whole life just follow the links.   

The objective of this review is to see if AAA term life insurance rates among the best term carriers available. Please note that opinions shared here are exclusively those of Jim Tobin and The Life Insurance Help Desk.

AAA Life Insurance Ratings

The financial strength of AAA  life insurance company is rated A (excellent) by A.M. Best. The other major ratings agencies have not rated AAA life insurance. 

In addition to financial stability, AAA is also rated A+ by the Better Business Bureau (BBB). While there are certainly complaints, like with all big companies, AAA has been quick to respond to any public complaints. The NAIC or National Association of Insurance Commissioners  lists the complain ratio as .15, well below the 1% average.

AAA Term Life Insurance

AAA offers traditional term life insurance policy as well an  Express Term product. The Express Term product is a simplified issue policy. This is to say that there is  no medical exam required to obtain this policy.

Express Term  policies have coverage limits or caps at $500,000.  These policies are more expensive than fully underwritten policies but in addition to not having to take an exam, you will likely receive an underwriting answer in  only a few minutes.

The simplified issue policy can be applied for on the computer while a fully underwritten policy requires an agent.

Lastly, there is a AAA Members Only Group Term Life Insurance product. This is the weakest of the AAA term life insurance offerings. The product is marketed to AAA members and is simplified issue "banded premium" term.

The "catch" with this product is that it goes up in price every 5 years and expires at age 80.  When compared to other term products on the market it is expensive.

 Additionally it it is only sold in coverage amounts of 50K,100k, 250k and 300K. The Life Insurance Help Desk strongly advises to stay away from this product. 

AAA Term life insurance review

What is AAA Direct Term Life?

Term direct is the marketing label used for AAA  Express Term. The reason this term is used is that the product can be purchased directly from Triple A  life insurance  via your computer. 

While this appears a convenient option, it puts convenience before making an informed decision. The use of an independent agent has no cost associated with it.

The truth is that the rates are the same with or without an agent and the company simply makes a larger profit. The downside of this for the consumer is that with an independent agent you will be able to shop 50+ A rated carriers. 

Being that different carriers have differing appetites for certain health risks, it is important to have an agent who has access to all the major carriers. The value of a good agent is knowing which carriers are likely to view your situation in the best possible light.

As an example, if you are being treated for anxiety or high blood pressure, you would rather send your application to a carrier that is more tolerant of those conditions than one known for catering to DUI or bad driving histories. histo 

AAA Life Term Insurance Quotes and Details

AAA term life insurance are not readily available in a published form. However quote estimates can be obtained at aaalife.com.  However, the estimates are of limited value due to the wide ranges. 

As an example, I put my own information into the AAA  term life insurance quote tool   (19 yr.,300K, Term Express product) and got a monthly range estimate between 68/mo. and 347/mo. 

The traditional term product comes in terms of 10,15,20,25 1nd 30 years. The available coverage amounts are a minimum of $100,000 and a maximum of $5,000,000. The application is taken by an AAA agent and underwriting can be reasonably expected to take several weeks.

The Express product  comes in terms of 10,15,20 and 30 years The available  coverage amounts range from $25000 to $500000

AAA Term Life Insurance Riders

There are several policy riders available for AAA term life insurance. However, it's worth noting they cannot always be used together.  

Return of Premium Rider

Traditional AAA life term life insurance can be purchased with a return of premium rider. If you choose this rider, the monthly cost of the  policy will be higher, but if you live until the policy expires, your premiums are returned to you. Additionally, should you  cancel the policy mid-  term, you'd receive a portion of premiums back.  

While initially costly, this rider can be used as a "forced savings". Note that this  rider is only available at age of 65  or younger for applicants purchasing policies with at least $100,000 in coverage for a term of 15 or more years. Additionally, no other riders are available whit return of premium policies.

Disability Waiver of Premiums

This provision would allow you to stop paying premiums (without losing your policy) if you were to become disabled.

Accidental Death

If you die in an accident covered by the policy, this provides an additional payment of up to $150,000 to your beneficiary.

Guaranteed Purchase Option

If you need it, this gives you the ability to increase your coverage at some time in the future, without having to prove your insurability.

Travel Accident

If you die or are seriously injured in a covered travel accident while driving or riding as a passenger, this provides an additional benefit to your beneficiary.

AAA Term Life  Conversion Options

Life insurance "conversion" refers to the ability of the policy holder to convert term insurance to permanent insurance with no evidence of insurability.

In short, you don't have to prove your healthy or for that matter, be healthy. Convertibility can be a great tool if your health declines considerably and new term insurance would be either unattainable or unaffordable. 

Unfortunately, the specific rules around AAA term life insurance convertibility  are not publicly transparent as they are with most major carriers. The lack of clarity around conversion rules is a factor in our negative view of life insurance options offered by AAA.

AAA Term Life Insurance exclusions

The only exclusions  that do not arise from underwriting are related to suicide within a two year period from the policy being put in force. 

That said, it is rare, but possible, to have an exclusion arise out of underwriting.  These exclusions usually center around dangerous activities.

We are not currently aware of any non suicide exclusion policy at AAA.

AAA Life Insurance Customer Service

Independent consumer review websites have  received mostly favorable comments on  AAA and  only six complaints from the National Association of Insurance Commissioners were received in  in 2019.

AAA Life Insurance Payment Options

AAA life insurance wi can be paid for by either telephone , online or traditional  "snail mail". Revolving automatic payments can be set up through AAA e-services. Payment can be from a checking account or a credit card Accepted cards are Visa, MasterCard, American Express, and Discover. Money orders are not accepted as payment.

Grace periods vary from product to product but are never less than 31 days.

AAA Life Insurance Payout on Death Claims

AAA claims that most payouts take place within a few weeks. The limited number of complaints to the NAIC would seem to substantiate that claim. There do seem to be complaints about payouts on consumer affairs sites, but these complaints are generally not centered around term policies.

  Because it's stressful enough when someone you cared about passes, AAA passes along the following tips

  1. Locate the life insurance policy. 
  2. Contact the insurance company. 
  3. Choose how you would like to receive the payment. 
  4. Await payment.

AAA Membership 

Membership in AAA is not a requirement to purchase either traditional tern or Term Express. The express policy will waive a $60 policy fee if you are a member.

The simplified issue group term policy does require membership. However, as discussed earlier, this is not a product worthy of your consideration. There are far too many better options that are transparent and much better priced. Stay away!

That said when I had an old Saab convertible I loved, my AAA  membership was worth it's weight in gold. 

AAA Life Insurance Review- The Verdict 

While I am a happy customer of AAA auto membership (and have used it!), I can not recommend their life insurance policies.  It's not that the policies are horrible (with the exception of the AAA members direct express group insurance), it's just that they are not transparent and easily compared with market leaders. 

It is usually telling when a carrier chooses not  be readily compared with the competition. Moreover, you are almost always better off when you can comparison shop with several options available to you.  For these reasons, we recommend using an experienced independent agency like the Life Insurance Help Desk.     

Next Steps

If You are or soon will be in the market for life insurance, we encourage you to use our quote tools and we will get right back to you. Should you have any questions, please feel free to give us a call at (203) 454-1100.  

The time to get covered is now!

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AAQA Term Life
James Tobin, CFP
 

Jim Tobin is the owner of Life Insurance Help Desk, a Fairfield County, CT. life insurance agency. You can find him on LinkedIn and Facebook. Over the past 10 years, Jim has used his CFP-financial planning designation to help individuals with their life insurance needs. In addition to working with life insurance clients, Jim teaches ESL classes in his spare time. He resides with his beautiful wife Nicole and the 3 cats that rule their lives..