Since 1922, USAA has provided car, life, homeowners, health, and property insurance specifically to active service military and their families. Importantly, the company has a strong reputation for its financial stability and client satisfaction. Even though not everyone is suitable for a USAA policy, experts believe that obtaining a quotation is valuable if you are. If you can get the vehicle, life, and homeowner’s insurance for less money, it might be beneficial to your finances. Here is a summary of USAA’s service offers as well as the advantages and disadvantages of being a member.
List of Contents
USAA (The United Services Automobile Association)
Maximum issue age for 10-year term life: 70
AM Best Financial Strength Rating: A++ (Superior)
Life insurance riders available: Children’s term life, Accidental death, Premium Waiver, Income provider option support
Accepts Credit Cards: No
Company’s Overview
USAA (The United States Automobile Association) is the insurance for the military. Genuinely, it will celebrate its 100th anniversary in 2022. The outstanding feature of this company is that it has AM Best’s highest financial strength grade of A++ (Superior). Importantly, AM Best is a credit rating service that only focuses on the global insurance business.
USAA provides members of the military with a set of benefits which is match their requirements. Moreover, the military-oriented riders offered by USAA are one of the reasons why this company is perfect insurance. Besides, a serious injury rider is included in Level Term V insurance. Additionally, it has a payout maximum of $25,000 for injuries that were sustained while serving in the military. The interesting point is that it has high customer satisfaction as measured by the NAIC’s complaint index.
Finally, these benefits are in addition to those that are special to the military. The most interesting point is that to qualify for USAA life insurance, it is not necessary to be a member of the military or have any other connection to the armed forces.
Policies Available
1. Term Life Insurance
It is a kind of temporary life insurance that lasts for a certain number of years, such as 30. Importantly, it is cheaper than permanent life insurance. USAA provides two Level Terms as follows. However, one thing you should remember is that it is not available in Arizona, Florida, and New York.
- Level Term V
This policy provides coverage ranging from $100,000 to $1,000,000 for durations of 10 to 30 years with a flat premium. This means a premium will remain constant for the life of the selected coverage term. Moreover, it can offer to anyone between the ages of 18 and 70 who needs a medical examination.
- Essential Term
To be eligible for this coverage, you must be between the ages of 21 and 35. The death benefit is fixed at $100,000. Moreover, the coverage will terminate on your 39th birthday if you want to renew it yearly. In the case that you do not want to renew it, the policy expires. However, your premium will go up each year, in contrast to the case with the level term policy. Significantly, a medical checkup is not necessary to purchase this coverage.
Nevertheless, Level Term V is the best option for those who are interested in purchasing a term insurance policy from USAA. Moreover, they should be a person who is ready to spend more time on the application procedure in order to save money. On the other hand, the Essential Term allows you to bypass the test. However, the premiums go up every year, and you cannot renew the policy once you reach 39. As a result, this kind of coverage is truly only appropriate for extremely temporary protection at the most.
2. Whole Life Insurance
Whole life insurance is different from term life insurance. It remains in effect for the policyholder’s whole lifetime provided. However, you must pay the required premiums on time. Moreover, the amount of your death benefit is guaranteed during the duration of the policy. Additionally, the cash value of the policy grows in a manner that is eligible for taxes.
- Simplified Whole Life
This alternative eliminates the need for you to pay premiums for the rest of your life. You have the choice of paying off the insurance over the course of 20 years or at the age of 65 if you get it from USAA.
3. Universal Life Insurance
Although USAA does not provide its own kind of universal life insurance, the company does make it possible for the members to purchase plans issued by John Hancock. If you pay enough in premiums, your universal life insurance policy will provide you with adaptable permanent coverage. Moreover, it will provide a cash value that may be maintained for your whole life. In contrast to whole life insurance, this type of insurance allows you more flexibility in terms of modifying or skipping premium payments without instantly causing the policy to become invalid.
Available Riders
1. Guaranteed Insurability Riders
Guaranteed insurability riders enable you to boost the death benefit without requalifying for coverage. This means you do not need to answer health questions or undergo a medical test. USAA provides two complementary services as follows.
2. Term Life Event Option Rider
This term provides you with a one-time opportunity to raise your death benefit when a life event occurs; for example, getting married, raising a family, or purchasing a house. However, to have this option added to your policy, you must be 35 or younger. Importantly, it expires after 10 years or when you become 45 years old.
3. Life Event Option Rider
This rider, like the one mentioned above, is included free of charge with USAA’s Simplified Whole Life policy. However, you may enhance the death benefit up to 6 times for a total coverage increase of up to $1 million. Additionally, the rider expires when you reach the age of 45 years old.
4. Child Rider
There is a $7.99 per month choice for USAA’s Term Life Insurance for Children Rider. It gives you up to $25,000 of coverage per child. Nevertheless, the rider may be converted to permanent coverage once your child reaches the age of adulthood.
5. ADB: Terminal Illness Rider
In the situation of a terminal illness, USAA provides a free rapid death benefit rider. When you are diagnosed with a terminal disease, you may utilize a part of your death benefit while you are still alive to do anything you want.
Pros & Cons
Pros
✔ Excellent AM score of A++
✔ Benefits for severe injuries
✔ Guaranteed insurability offered at no extra cost
✔ Term conversion included
Cons
✘ Lacking no-medical-exam policies
✘ Few insurance types offered
Pros Clarified
Excellent AM score of A++
The A++ rating that AM Best has given to USAA is its highest grade. Thus, it indicates that the company has an excellent capacity to satisfy its insurance responsibilities. Importantly, fewer of the companies were given the top-tier rating by AM Best.
Benefits for severe injuries
Active military personnel may get valuable benefits like coverage during warfare and serious injury benefits. If the policyholder experiences specific injuries while in the line of duty, USAA offers the policyholder $25,000. Importantly, these benefits are provided at no extra cost to the policyholder.
Guaranteed insurability offered at no extra cost
If you choose a Level Term V policy, or a Simplified Whole Life policy from USAA, you may apply for extra coverage. The examples are marriage, the purchase of a house, or the birth of a child. It can apply without having to prove your insurability. While most insurance companies charge an additional price for a guaranteed insurability rider, USAA provides it for free.
Term conversion included
You could change a term policy to a permanent policy until the level term ends. This is helpful if you cannot afford permanent coverage, but want to lock in your excellent health for later.
Cons Clarified
Lacking no-medical-exam policies
The USAA premium grows annually. Moreover, its coverage is restricted to $100,000. Importantly, other companies provide no-medical-examination term life insurance for up to 40 years with coverage limits exceeding $1 million. However, USAA policies expire at age 39.
Few insurance types offered
USAA provides both term and permanent life insurance. However, it does not offer universal life insurance, variable universal life, or indexed universal life plans directly.
Complaint Index
If a company’s complaint ratio is more than 1, it implies that it gets more complaints than would be predicted for a company of its size. On the other hand, if the ratio is less than 1, the company gets fewer complaints than predicted. Significantly, USAA’s three-year average complaint index of 0.177, so the company got much less complaints than predicted.
Customer Service
You could communicate with USAA by phone or mail. Their principal phone hours are Monday through Friday, 7:30 a.m. to 8:00 p.m. Central Time (CT). Their phone numbers are 210-531-USAA (8722) and 800-531-USAA (8722). The mailing address is 9800 Fredericksburg Rd., San Antonio, TX 78288.
Is USAA Life Insurance A Worth Insurance to Get?
A USAA life insurance coverage may meet your requirements if you are a member of the military. Active service members may particularly value the no-cost military advantages. Examples are rapid issuance for those preparing for deployment, coverage during warfare, and serious injury compensation for injuries incurred in the line of duty.
Even if you are not in the military, USAA may still interest you. It is unique and important that the company gives guaranteed insurability riders at no extra expense. Most life insurance companies charge additional fees to raise the death benefit in the future, while USAA does not.
However, you will need to find other insurances if you are interested in long-term or high-coverage no-medical-exam life insurance. USAA does not provide standard coverage types such as universal life insurance, variable universal life insurance, or indexed universal life insurance.
Conclusion
In conclusion, the essential thing you should remember is that before considering companies, you have to choose the type of life insurance you need first. Moreover, you should determine which life insurance riders you want to add to the policy. Besides, you also have to calculate the amount of life insurance you need and the length of time you want it to last. Every life insurance company has its own advantages. Therefore, you should deeply explore the companies’ details.
FAQs
USAA insurance is a financial services company that primarily serves military members and their families. USAA offers a wide range of insurance products, including auto, home, life, and health insurance. They also provide banking services, investment planning, and retirement planning services.
To become a USAA member, you must be an active, retired, or honorably separated military member or a family member of a USAA member. You can apply for membership online by providing proof of your military service or your relationship to a current USAA member.
The claims process with USAA is typically very straightforward. Customers can file a claim online or by phone, and USAA has a team of claims adjusters who will review the claim and determine the appropriate payout. In most cases, customers receive their payouts within a few days of filing their claim.
Yes, USAA offers travel insurance that includes coverage for international travel. This coverage can include emergency medical expenses, trip cancellation or interruption, and baggage protection.
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Source: Investopedia, Forbes