AAA (triple A) is one of the best-known insurance companies in the nation today, but when it comes to term life insurance, is it the right one for you?
Before we delve any deeper, let’s first go over just what term life insurance is. This is actually the original form of life insurance, and it generally the least expensive way to ensure that your beneficiaries get a substantial death benefit (the payout) should you die. It gets its name from the fact that the insurance policy is for a predetermined time period, a term that generally falls anywhere from 10 to 30 years. During this term, you pay an annual rate, usually in monthly installments to help keep it more manageable. These rates may or may not fluctuate during or after the pre-set term, so it is important to find this out ahead of time.
How AAA Term Life Insurance Works
Like most of its competitors, AAA offers term life insurance polices for between 10 and 30 years of coverage (specifically, applicants must choose from 10, 15, 20, 25 and 30 years). Coverage ranges from $100,000 to over $10,000,000, and if you are diagnosed with a terminal illness with a life expectancy of less than a year, you may be eligible to receive up to 50 percent of your death benefit while you are still alive. You are also able to continue your coverage even after the initial term period ends (it can be converted it to permanent life insurance before 80 percent of the term is over, or when you reach age 65), although premiums will increase each year after that point.
How Does AAA Stack Up to the Competition?
Be aware that it is impossible to put down in this article what you will owe per month if you go with AAA. Term life insurance policies vary from person to person, and the specifics are hammered out after the insurance provider looks at a wide variety of factors (like age, health conditions, term length, etc.) With that in mind, let’s get a better idea of AAA’s rates by using this realistic scenario:
Let’s say Sarah is a 43-year-old woman who is applying for term life insurance with a $300,000 death benefit. The term she is applying for is 20 years. Sarah is also in good health and does not use tobacco products, so she will not have a difficult time getting approved. Here’s what some of the top insurance companies are likely going to offer him in terms of rates (organized from lowest to highest):
Banner Life: $24.06 per month
American General: $26.28
MetLife: $26.46 per month
Transamerica: $27.04 per month
Protective Life: $29.59 per month
Genworth: $30.63 per month
Prudential: $31.95 per month
AAA: $32.74 per month
ING: $33.86 per month
So as you can see, AAA doesn’t necessarily offer the lowest rates. AAA also has a rating of A- with A.M. Best, which is good, but all the other companies listed here have either an A or A+ rating. AAA nevertheless has a decent reputation, with over 1,000,000 life insurance policies and a history of partnerships with various charities.
Is AAA For Me?
Again, a lot of specifics go into the formation of life insurance policies; so many people will find that there is no “one size fits all” type of solution. So, it is important to note that as good as an insurance company may be, it may not be the best one for you and your needs. As you saw in the rate comparison above, AAA doesn’t always offer the best rates for term life insurance. So, it is highly recommended that you compare quotes across multiple insurance providers to get the best life insurance pricing.