AAA Life Insurance Review 2020

Shopping for life insurance during the pandemic? Be aware that insurers may have changed their products and policy applications. For the latest information on how to cope with financial stress during this emergency, see NerdWallet’s financial guide to COVID-19.

AAA Life Insurance Co. was founded in 1969 by AAA, the group of motor clubs best known for providing emergency roadside assistance and travel services. The company offers term, whole and universal life insurance. You don’t have to be an AAA member to buy life insurance from the company, but there are some discounts for members.

AAA Life Insurance

AAA earned 3.5 stars out of 5 for overall performance. NerdWallet’s ratings are determined by our editorial team. The scoring formula takes into account complaint data from the National Association of Insurance Commissioners and financial strength ratings from A.M. Best.

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Term life insurance: AAA’s traditional term life insurance requires a medical exam to qualify and offers coverage from $100,000 to more than $5 million. For life insurance with no medical exam, AAA offers “ExpressTerm,” which only requires answering health questions. Its coverage options range from $25,000 to $500,000. ExpressTerm policies can be purchased online.

Both traditional and ExpressTerm offer 10-, 15-, 20- and 30-year coverage periods, with traditional term tucking in an additional 25-year option. AAA members save 10% on premium payments and may be able to get discounts on their home or auto insurance by bundling with traditional term life.

Whole life insurance: AAA offers guaranteed issue life insurance with coverage up to $25,000. Applicants ages 45 to 85 can qualify automatically, but if the insured dies during the first two years, AAA will not pay out the full policy amount, unless the death is accidental. AAA members and their spouses are eligible for a $60 annual discount on guaranteed issue whole life.

AAA also offers traditional whole life insurance with coverage up to $75,000. You may need a medical exam to qualify. AAA membership will get you 10% off the base rate.

Universal life insurance: Coverage amounts range from $100,000 to more than $5 million. AAA offers two flavors of universal life insurance: LifeTime and Accumulator. Both are permanent policies that last your entire life and build cash value. The Accumulator product is geared toward people who may want to use the cash value later to supplement retirement or cover other expenses, such as their children’s college education, while the LifeTime product features more guarantees, like fixed premiums.

» MORE: Compare life insurance quotes

AAA customer complaints

AAA Life Insurance drew close to the expected number of complaints to state regulators for a company of its size, according to three years’ worth of data from the National Association of Insurance Commissioners.

More about AAA Life Insurance

AAA Life also sells accident insurance and annuities. Its accident coverage policy is available only to AAA members, and your benefit level is dependent on how long you’ve been a member. If you purchase it, you’ll be covered for injuries and death caused by accidents. So if you fall off your roof and have to go to the hospital, accident insurance will help cover those costs. It doesn’t cover accidents caused by extreme sports, acts of war or self-inflicted injuries like suicide or drunken driving.

AAA offers three annuity options, with two having $3,000 minimum deposits and one requiring $10,000 upfront. If you’re considering an annuity, you should talk to a fee-only financial advisor to find the right option for your retirement needs.

Methodology: Life insurance ratings

NerdWallet’s life insurance ratings are based on weighted averages of complaint index scores from the National Association of Insurance Commissioners for individual life insurance, and financial strength ratings from A.M. Best, which indicate a company’s ability to pay future claims. To calculate each insurer’s rating, we adjusted the NAIC and A.M. Best scores to a curved 5-point scale.

These ratings are a guide, but we encourage you to shop around and compare several insurance quotes to find the best rate for you. NerdWallet does not receive compensation for any reviews.

Methodology: Insurer complaints

NerdWallet examined complaints received by state insurance regulators and reported to the National Association of Insurance Commissioners in 2016-2018. To assess how insurers compare to one another, the NAIC calculates a complaint index each year for each subsidiary, measuring its share of total complaints relative to its size, or share of total premiums in the industry. To evaluate a company’s complaint history, NerdWallet calculated a similar index for each insurer, weighted by market shares of each subsidiary, over the three-year period. Ratios are determined separately for auto, home (including renters and condo) and life insurance.