How do you choose a life insurance company out of the sea of possible options? Should you choose a boutique specialty company, or should you choose a large firm company like AIG?
AIG serves 100 countries and over 90 million customers, AIG is one of the world’s largest insurance companies, but is AIG right for you? Let’s explore, shall we?
AIG Life Insurance Company Overview
American General Life is owned by parent company, American International Group (AIG.com), and is headquartered in New York City.
What are AIG’s Financial Ratings?
When choosing a life insurance company, it is important to check their financial ratings. The financial strength and claims-paying ability of the company is what your policy is based on.
The question you must ask is this: How sure can you be that the company will be in business decades in the future when it is time to pay a death claim?
On the metrics of strength, history and industry reputation, AIG scores high marks and is a solid choice.
The firm of A.M. Best, renowned for their reports on the financial stability of insurance carriers, consistently ranks AIG highly (“A” – Excellent) among their competing carriers. In fact, A.M. Best is the oldest and most widely recognized of all ratings firms, and because of their exclusive insurance industry focus, their ratings are held in high esteem.
The insurance division of AIG has over $200 billion in assets, and they consistently maintain a long-term positive rating for financial stability. AIG is also held in high esteem by other rating companies, including Standard and Poor’s, Fitch’s, Moody’s and Comdex.
The longevity and consistency of these ratings says it all. AIG is a stable company, and they can be trusted to be reliable and competent in fulfilling your promise to protect your family.
AIG Company History
As a company, AIG originated nearly 100 years ago, in 1919 in Shanghai, China, as a general insurance company -American International Underwriters. Just years later, American International Underwriters launched its first United States office in New York.
The company acquired American General Corporation in 2001. Today, the company is best known as AIG or American International Group.
They own both the American General Life Insurance Company as well as The United States Life Insurance Company.
AIG and the Financial Crisis of 2008
AIG was a prominent name in the 2008 financial crisis. The government and taxpayers had to bail the company out at a price tag of $182 billion. In exchange, the government took an equity stake in the company.
This company emerged from the financial crisis, repaid the U.S. government all the loaned money plus interest, and then the company restructured. In 2012, the U.S. Treasury sold off its last shares.
In the last few years, AIG has made great strides in rebuilding their tarnished company image. They have re-structured their assets and moved far away from the investments that caused the meltdown.
As of the most recent reporting period, 92.7% of AIG’s current assets are in cash or investment grade bonds. This stable investment portfolio means strong financial ratings today and serves as proof of lessons learned from 2008 – 2009.
AIG Life Insurance Products Offered
When you buy life insurance, the proceeds to your beneficiaries are tax-free and can be used for a variety of needs by beneficiaries of the policy. Therefore, it is important to choose a carrier that offers a wide selection of coverage options.
AIG provides this, including term, whole, and several types of universal policies, including index universal and variable universal life insurance products.
The company offers term life as well as permanent life insurance protection. Term options ranging from 10-30 years are available, and AIG will not increase your premium during that term. Permanent life insurance options include a cash value that grows over time. These policies are tax-deferred; tax is only due on capital gains upon withdrawal of funds. They also include a death benefit protection plan.
AIG provides guaranteed issue whole life insurance for people aged 50-85 with pre-existing medical conditions. It’s a fairly standard industry policy with a $25,000 max coverage plan and a two-year graded death benefit.
That being said, AIG actually has very generous underwriting rules for high-risk medical issues, so it is a great choice for people who are deemed high risk for life insurance. Many customers choose AIG even though they suffer from heart issues, diabetes and sleep apnea.
AIG is also fairly liberal on lifestyle choices that sometimes affect a person’s ability to get insurance coverage, such as medical marijuana use.
Why Should you Choose AIG for Term Life Insurance?
For all their policies, American General Life Insurance Company offers very competitive rates. They consistently rank in the top three for best rates for 20 to 30-year term life policies (for both males and females). Their table rankings for high risk individuals are excellent as well; they typically beat most of their competition on these rates.
AIG uses a unique scoring system called Life Lab Scoring combined with standard industry underwriting to come up with their preferred rates.
The scoring uses standard blood and urine lab work and other tests to generate a score. People in between two rate classes typically fare well with AIG’s scoring system and see their rates improve.
Regarding term life policies, AIG offers 10 year and up to 30 year plans, a great choice for consumers who need coverage for a specific period of time. They also have convertible term life that allows conversion of all or part of a term life policy to permanent coverage.
This is extremely advantageous for people who hold a term life policy and are then diagnosed with an illness. In many situations like this, you may not be able to get coverage elsewhere, but with AIG you are guaranteed a policy conversion as long as it is within their guidelines. Then you can keep that policy for the rest of your life.
Permanent or Lifetime Life Insurance Policies at American General
Universal life insurance policies centered around survivorship are also available for consumers aged 50-75, and they are payable not on the policyholder’s death, but on the surviving spouse’s death.
The goals of these policies are not to provide for the spouse, but instead these are great options for leaving money to a beneficiary, such as a child, grandchild, or a charity.
Some policy options allow you to take out a loan against the cash value of your policy, even while your cash value continues to rise; therefore, you earn interest on the cash value even with an outstanding loan in place.
Additionally, AIG offers numerous variable universal life insurance plans that allow the policyholder to invest the accumulation value of the policy in other ways, such as in the stock market which is similar to how a mutual fund works. The downside is that there are no caps, so you could experience unlimited losses or gains with this option.
AIG also offers several types of life insurance riders including: accelerated death benefit, conversion option under age 70, accidental death, disability income, and child term riders.
Three years ago, AIG launched a program called AG Asset Protector that helps customers choose the best-suited permanent life insurance policy. Their motto is “life insurance you don’t have to die to use.”
Policyholders are allowed to use the death benefit while they’re still living, accessing the benefit during a chronic illness or other critical life need. The policies are “accelerated access”, meaning that you can receive a portion of your death benefit paid as a monthly income stream to help during times of chronic illness.
This program holds immeasurable value to policyholders with families, especially if the policyholder provides the majority of the household income. This program can provide you with a sense of security knowing the enormous expenses of chronic health care will not fall entirely on your loved ones in a time of crisis.
Customers can even use it as a supplement to their retirement income.
AIG Customer Service
AIG consistently has an A+ rating with the Better Business Bureau (BBB). For a company their size, they have an impressively small amount of consumer complaints.
The company mantra is to quickly, thoroughly, and dependably resolve consumer complaints. Most complaints they do have center around advertising, and they do not include problems with policies or services.
The BBB scale runs from A+ and F, but what does this scale mean? What exactly dictates how a company is scored based on this grading scale? Here are the BBB criteria.
- Trust: Establish and maintain a positive track record in the marketplace.
- Honesty: Adhere to established standards of advertising and selling. Honestly represent products and services, including clear and adequate disclosures of all material terms.
- Transparency: Openly identify the nature, location, and ownership of the business, and clearly disclose all policies, guarantees and procedures that bear on a customer’s decision to buy.
- Honor Promises: Abide by all written agreements and verbal representations.
- Responsiveness: Address marketplace disputes quickly, professionally, and in good faith.
- Safeguard Privacy: Protect any data collected against mishandling and fraud, collect personal information only as needed, and respect the preferences of customers regarding the use of their information.
- Integrity: Approach all business dealings, marketplace transactions and commitments with integrity.
In summary, there is no clear downside to choosing AIG as your life insurance provider. They are an established, publicly traded, and trusted global company.
People across the globe and throughout the United States rely on them for their life insurance needs.