Most veterans and active duty military personnel are familiar with the USAA brand, and understandably so. They are a powerhouse insurance company, and poised among the leading life insurance companies in the United States today.
For many, USAA is a great choice for life insurance, but there are a few situations where it might make sense to go with a different, private insurer. Here is our USAA life insurance review, including background information and financials.
As we always say, let this carrier be just one of many companies you review before applying for life insurance. You may get a better value from one company versus another, even if the price is just a bit more.
Our USAA Life Insurance Company Review
USAA stands for the United Services Automobile Association, but they do way more than just automobile related business. The company got its name when it was founded nearly a century ago in 1922.
A small collected group of Army officers were struggling to find insurance on their vehicles, and decided to band together and do it themselves. Each took part in insuring another’s vehicle, and the company was born under the name United States Army Automobile Association, which would be changed two years later. Today, it continues to thrive on the same leadership, foundation of trust, and service.
As the company grew successfully through mail campaigns, it saw more growth opportunities in the 1960’s when it not only adopted telephone sales, but new arms of business including homeowner’s insurance and life insurance. Within the next three decades, more expansion came in the way of adding a brokerage for investing, as well as banking for additional convenience to its members. Membership is now extended to all service men and women, past and present, and their families.
Current Financial Strength & Ratings
According to several independent financial ratings agencies, USAA is in the 99th percentile of its industry and boasts several of the very best ratings offered in the industry. A.M. Best, who is largely revered as the most reputable rating institution, has awarded USAA with an “A++“, their highest rating. In addition, Moody’s has given them an “Aa1” and Standard & Poor’s has attributed them with an “AA+” which is their highest honor as well.
USAA is proud to claim a Fortune 500 spot, with distinguished notoriety as one of the top 100 companies to work for. The company, starting off with just 25 men, has grown to more than $25 billion in total value, or net worth. Surpassing more than 10 million in combined members, they have nearly 43 million active policies across the board and greater than 26,000 employed.
Life Insurance From USAA: What’s Different?
When it comes to life insurance, USAA Life has a couple distinct advantages they can offer through their products which no other company can.
The first, and quite possibly the most distinguishing, is how they treat payouts for those who are actively enrolled in the United States Armed Forces.
Typically, service men and women would not expect a payout when the cause of death was related to active duty. While there are other companies who have the same provision, it’s rare. The “War Clause” usually allows life insurance companies to forego payout, much like those who attempt suicide in the first two years of a policy.
In addition, USAA life insurance is supplemental coverage on top of SGLI (Servicemembers Group Life Insurance) through the VA, and even pays a benefit of $25,000 for those who are severely injured, but not killed in action. These additional benefits can allow active duty soldiers to accumulate more coverage than with any other provider.
Disadvantages of USAA Life Insurance Company
Up to this point, you may be wondering why any person who has access to USAA wouldn’t use them. There are several scenarios a person may need to consider another insurance carrier to get the best life insurance rates. Here are a few:
- Poor impaired risk underwriting. A person with less than average health who applies to USAA probably won’t get top tier rates, and there is almost always a better high risk life insurance provider to use. For example, we encountered an individual who was given extraordinarily high premiums due to a very common health issue with little long term risk. In less than a week, we had him issued with another “A+” rated carrier at Preferred Plus.
- Extended underwriting time periods. If someone needs coverage quickly, either for a business loan or otherwise, USAA is likely not a good choice. While USAA claims 4-6 weeks in underwriting, which is common, many other carriers are significantly faster. Our list of express issue life insurance companies showcases several providers who can have policies paid in just a few days. The exception to this is when an applicant is soon to be deployed, where USAA will expedite the review.
- Price. For people in excellent health, USAA offers pretty competitive rates. However, across the board, there is almost always another life insurance company who is cheaper, even if just by a little. For many long time members, a few extra dollars is no big deal because they stress the loyalty and commitment they have towards USAA, who has one of the highest customer service approval ratings. Those who are extremely keen on maximizing their coverage for less, other companies should be considered, at least.
Other Products from USAA
Perhaps one of the big advantages to USAA is actually the ability to get other types of insurance, all in one place. Those options are:
- Home Owner’s Insurance
- Renters Insurance
- Auto Insurance
- Property Insurance
- Business Insurance
You can even get credit cards from USAA, car loans, and even home loans, if you so choose.
However, something we always recommend is to evaluate the total cost of coverage versus the individual policy costs. Sometimes having a ‘bundle’ of insurance with just one company will actually cost more than if you were to segregate certain items away. Again, it all comes down to convenience.
Overall Opinion on USAA Life
Most current members will do excellent with USAA Life Insurance Company. With top notch customer service, good rates, and competitive products, they are a great choice. For active duty, USAA is likely the best choice.
You could potentially save money if you need just a basic term policy, though it may be nice to keep your insurance all in one place. The price for this kind of convenience, especially if you’re young, is very little.
|Company Name (and Subsidiaries)||USAA Life Insurance Company|
USAA Life Insurance Company of New York
USAA Life General Agency, Inc. (LGA)
|Company Ratings||A.M. Best (A++)|
Moody’s Investors Services (Aa1)
Standard & Poor’s (AA+)
|Headquarters (Address, Phone, Web)||9800 Fredericksberg Rd.|
San Antonio, TX 78288
|Policy Types Available||Term|