Life Insurance With AAA Review: The Pro’s and Con’s Of Their Group Term Coverage

Are you a AAA insurance member?  Maybe you just searched Google for life insurance AAA and just came across our site?  Then again, have you received various offers from AAA through the mail?  One common on is titled Exclusive Members Only Group Term Life Insurance.  Typically it comes with a paper application and some information about the program.  Many folks are solicited monthly.

Let it be known…We have no affiliation with AAA, we are actually a licensed and independent life insurance agency/brokerage.  This is our AAA insurance review to the aforementioned product.  Our credibility?  Being independent gives us a unique view on numerous different carriers in the life insurance business.  Having no obligations to any one company allows to us objectively compare one life insurance company to the wealth of the top carriers in the industry.

AAA, also known as the American Automobile Association was founded in 1902 so they are not a newcomer to the insurance business.  AAA is noted primarily for its roadside assistance program.  With a good reputation in place, AAA entered the life insurance business.  Today, they have in excess of 1,000,000 life insurance policyholders.  In 2016, A.M. Best, a very respected ratings company issued a A- to AAA for its financial condition.  No worries there.  Financially sound.

AAA Group Term Life Basics

AAA offers a good number of different life insurance products.  Annuities are even included in their portfolio.  As you look at what this AAA coverage is all about, do you have a concrete reason why you need this particular life product? What are you considering this particular offering?  Do you need temporary or permanent coverage…term life insurance or whole life protection? 

If you are looking at protection for a mortgage, term life insurance is usually a winner, but there are plenty of times when whole life insurance or guaranteed universal life insurance is the better choice.

Now, some folks just put mailer solicitations like the this product in the “circular filer” and are done with it.  Some folks may have been thinking about life insurance and kept it around to check out.  I suspect that is why you are looking to the internet and on our site today.  Maybe your not quite sure about the AAA insurance product itself and you just want the scoop.  Is it a good product and/or is the price fair?

While the best option will be to discuss the matter personally when you are ready, we’ll get you started here today.  As a seasoned independent life insurance agent/broker, I am qualified to compare the AAA Group Term Life Product with the top life insurance carriers in the industry.  I will highlight all the pluses and minuses so you can make your own decision whether is is a winner or loser.

AAA Life Insurance Consideration

If you are in the market for life insurance is term life insurance the best product for you?  Term life is popular but is not the product of choice for a great number of people for many reasons.

I would however, encourage you to read on to get the skinny on the AAA product.  It is possible you find that the product really does not suit your needs.  Compare its cost to the top life insurance companies.  You can also acquire an instant term life insurance quote here by simply using the quoting calculator/widget to the right.  Dozens of carriers are in this quoting engine.  Use it for comparison with AAA.  The quick quote tool will give you all the top carriers and their rates in a minute of your time.

In any of our AAA insurance reviews we will include a summary of benefits so you know what you are and are not getting.  In this specific review we are exclusively referring to the AAA Exclusive Members Only Group Term Life Insurance coverage.

So without further ado…

The Pros of AAA Group Term Life

  • First of all, it is easy to apply for.  We all like that don’t we!!  AAA includes an application and even a postage paid envelope to return if interested
  • No Medical Exam is required, Simplified Issue
  • There are only 3 Health Questions you must pass
  • Approvals can be delivered quickly
  • If you have a surviving spouse that is a AAA member, upon your passing, they will receive a lifetime standard AAA membership

The Cons of AAA Group Term Life

  • Premiums increase every 5 years.  Top life insurance companies lock term life insurance rates for 10 to even 30 years.  This is major!!
  • The AAA “Exclusive Members Only Group Term Life Insurance” expires at age 80.  That is when people need the coverage the most.  Many folks are on borrowed time at this point and can no longer qualify for affordable life insurance.  Top life insurers offer coverage with guaranteed level premiums to ages 90, 100 and even 121!!
  • Death Benefit is low for term insurance.  The AAA Exclusive Members Only Group Term Life Insurance only offers a $50,000, $100,000, $200,000 and $300,000.  These are the only 4  “face amounts/death benefit amounts) in the coverage.  Leading life insurance carriers can and will dial in specifically how much life insurance you really need.  Many people are under insured with policies of these amounts.
  • The premiums or cost of ownership is more expensive than a fully underwritten life insurance policy from the top life insurance carriers.  Remember, premiums do increase every 5 years on the AAA product which results in massive overpaying for term life insurance.  A 40 year old male in excellent health could have $100,000 of 10 year level term insurance from a top life insurer with NO rate increases for $9/mo while AAA would charge $18/mo for the first 5 years.  Over the years, this translates into thousands of dollars and being overcharged for life insurance coverage.

AAA Exclusive Members Only Group Life Insurance Summary of Benefits:

Guarantees in the Coverage:

  • Guaranteed Renewable

With the stipulation that you pay the appropriate premium and the master group policy stays in force, you cannot be cancelled once you are insured.   You cannot be singled out and cancelled regardless of your future health.  Your rates cannot be altered due to your health either.  This coverage can be kept till age 80 when it expires.

  • Guaranteed Level Benefits

The death benefit you choose at application time will never decrease regardless of your health or age till it expires at age 80

  • Guaranteed Spousal Eligibility

Your spouse is able to apply even if they are not a AAA member as long as they are between age 18-74.  This includes a broad definition of spouse as registered domestic partner, civil union, domestic partnership etc.  As long as state law recognizes the relationship as such.

  • Guaranteed Payout For a Covered Claim

Your beneficiary(s) will get the death benefit selected during application.  There is no waiting period or partial payments of the death benefit.

 Two frequently overlooked benefits when purchasing life insurance coverage to consider…

Living Benefits

The AAA Exclusive Members Only Group Term Life Insurance allows you to obtain partial benefits while you are still alive.  This is made possible by the Accelerated Death Benefit built in the master policy that covers the insured if they are ever diagnosed with a terminal illness and have 12 months or less to live.  You can obtain up to half of the death benefit to help out with your expenses.

Conversion Privilege

Anytime before you turn 65, you may desire to convert your AAA Exclusive Members Only Group Term Life Insurance into a whole life insurance policy from AAA.  As long as you convert prior to age 65, this is also guaranteed regardless of your health.  Never buy a policy that does not contain this option!  Big mistake.

Why You Should Seriously Consider an Independent Life Insurance Agency vs. AAA

  • Work with a independent life insurance agent/broker as they do not have a loyalty to a particular insurance company.  AAA is one insurance company best know for automobile insurance.
  • Independent life insurance agencies do not market homeowners and auto insurance to their policyholders.  Life Insurance is their business.
  • You save money.  They shop the life insurance market to get you at the lowest cost for your personal life insurance needs.  This is a done with the finest life insurers in the industry.
  • Reputable independents are hassle free, no pressure consultants.  They want your experience with them to be positive.  No arm twisting.
  • Fast Online Application for the quickest approval available.
  • Friendly, painless and helpful services.  Help with determining the type of life insurance you need before buying coverage.  Independent life insurance agents offer free advice and tips to help you achieve the best possible price.
  • If they are like this office, they handle even the toughest, hard to insure cases that AAA will not touch.  Many companies, agents or agencies will tell you can’t qualify.  If you have a health condition and need life insurance, our team is unsurpassed at securing affordable rates even in high risk life insurance cases.
  • Life Insurance is not a one size fits all product.  There are many factors to look at before a proper product and insurer should be selected.
  • A good independent agent will save you lots of time and hassles.  They shop the market for the coverage you need to find you the best offer.  Quotes from all the top insurance carriers personalized for you based on your risk profile.

Conclusion

AAA has a fine reputation and over 1,000,000 members under its prodigious umbrella.  It has a limited number of complaints from from disgruntled policy owners which says a great deal of positive about the company as a whole.

Customer service seems to be good.  However, it does not mean this product is better or appropriate for most people.

It is hard to evaluate the satisfaction AAA members may or may not have with the Exclusive Members Only Group Term Life Insurance.

Evaluate why you have considered life insurance with AAA.  What are your alternatives to this products?  Ask yourself a few questions before you consider applying for or buying any life insurance.

With the high cost off this AAA group term life… for what is really a 5 year term policy automatically renewing at a higher cost each time…you should be looking elsewhere for coverage in the humble opinion of this writer.

Why?  The average life insurance consumer drops it as soon as the rate jumps up.  As people age, the risk of the unthinkable rises.  That is when life insurance is most important isn’t it?

If term life insurance is really of interest to you, I would recommend you read about guaranteed level term life insurance before going any further in the decision process. This eliminates out of control premium increases bringing affordability for the long run.

Most people need longer coverage term than 5 years.  Do you want your premiums to keep rising regardless of your health?  If your health changes during the coverage term, you will be stuck in a policy going bonkers in cost over the years.

Policies with limited health questions like this are generally for people with significant health conditions.  They have their place, but are not priced as affordably as fully underwritten coverage or life insurance with several health questions and no medical exam.  As a result, the coverage is higher risk to AAA in this case, so the program naturally becomes more expensive to offer life insurance consumers..  Do you want to pay the extra to have the name AAA on your policy?

There are similar industry offerings marketed by the likes of Globe Life and AARP as well.  We hear the complaints from plenty of disappointed people who found out the hard way when their rates got very expensive.  It wasn’t  the “deal” they expected.

There is a reason top notch life insurance agents/brokers do not market products like these ladies and gentlemen.  People drop them when the premium jumps up 5, 10, 15 years down the road.  An experienced life insurance agent/broker recognizes the likelihood of an angry client with a policy like the AAA Exclusive Group Only Term Life insurance plan.

The key point to remember here today is…make sure you have the right kind of policy for your needs from the get go.  Your age and health matter all the more as you age.  Affordability now and in the future is important, right?  You don’t buy life insurance just to drop it, you buy it to protect the financial needs of the people you love and and/or other financial obligations.

So, once you know you need life insurance, ask yourself these questions:

  • What type of life insurance do I need?
  • How long of coverage if term insurance?
  • How much coverage is needed?
  • Which company is going to give me the best deal-personally (based on my health)
  • What is the financial rating (AM Best) of that carrier?

From the practicality point, cost and limits the coverage offers, I cannot give a good recommendation to such a product regardless of the service quality of the AAA Life Insurance company.  Service is important, but a good agent/broker should be providing that support anyway.  That is where service starts and often ends.  That is a part of their job. 

With the AAA life insurance products, we are talking about potentially thousands of dollars in excessive premiums paid on even on a small term life policy.  These types of policies are big money makers for the insurance company.  This is not a problem with AAA life insurance, but a problem with the type of policy.

My 2 cents, for what it is worth…find a good independent life insurance agent that is open minded and thinks out of the box.  You’ll come out way ahead and have top notch service from him or her and likely better life insurance rates. This serves you in spades for years to come.

As an agent myself, I still receive life insurance offers from a few different companies and even my credit union.  I’m amused to look at them, but know the limitations and weakness of the coverage.  They land in the circular file soon after.  I suggest you do the same and talk to a professional instead.

Hope this article from our AAA Life Insurance reviews helps you reach a good decision.

Feel free to let us know what you think below.  Call us if you would like to discuss your personal situation.  We’re here to help.

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