AIG is well known in the US for its highly competitive life insurance products and for being the company that’s “too big to fail”.
In this article, you will learn about AIG’s three top life insurance policies. You will also find professional advice about these products that isn’t commonly available elsewhere.
HISTORY and FINANCIAL STRENGTH of AIG
Founded in 1919, American International Group (AIG) is one of the largest financial companies in the world. True to its name, AIG is based in the US, but has operations in over 80 countries. AIG was recently ranked 49th on the Fortune 500 list and is in the top 100 largest public companies in the world.
Below is a list of ratings by the most recognized independent rating agencies:
- AM Best : A (Third category of 15)
- Fitch Ratings: A+ (Fifth category of 21)
- Moody’s Investors Service: A2 (Sixth category of 21)
- Standard & Poor’s: A+ (Fifth category of 21)
- Comdex Score: 81
Wide Range of Product Offerings
AIG offers level term life, guaranteed issue whole life, and a full suite of universal life products. We will focus on their top three products:
- Secure Lifetime GUL 3
- Guaranteed Issue Whole Life
AIG has a unique level term product offering. The offer term products are customizable. In other words, you can select the term period and are not locked into the standard term durations.
Most carriers offer only 10, 15, 20 and 30 year level term durations. AIG offers the same term periods. However, they also allow you to select a term duration anywhere from 15 through 30 years. So, you could choose a 17 year term or 28 year term as examples.
35 Year Term
Additionally, AIG also offers a 35 year term. Very few carriers offer a term product beyond 30 years. Let’s look at an example of where this product might fit. A 30-year old, just starting a family, might want life insurance to stay in force until age 65. The longer term duration can work well for younger folks.
Unique situations call for creative and flexible solutions. AIG provides “out-of-the-box” solutions with their flexible term products.
- Conversion: You can convert a term policy to a permanent policy through the end of the term period or age 70 (whichever comes first). You can convert to any of AIG’s policies, but only within certain limits.
- Minimum Death Benefit is $50,000
- Issue ages from age 20 to 80
- Terminal Illness Benefit. This allows you to accelerate a portion of the death benefit if diagnosed with a terminal illness with less than 12 months to live. The amount that can be accelerated is the lesser of 50% of the death benefit or $250,000.
- Accidental Death Benefit: This benefit pays you an additional death benefit if death occurs as a result of certain accidents or injuries.
- Child(ren) Rider: This benefit pays a benefit upon the death of an insured child.
- Waiver of Premium: This benefit waives your premium when diagnosed as totally disabled after a 6-month waiting period.
Secure Lifetime GUL 3 (Guaranteed Universal Life)
AIG offers a very competitive guaranteed universal life product. This product is often referred to as “term for life” or “no-lapse universal life”.
If you want a policy to last your entire life, but don’t want the volatility of a variable product dependent on market performance, then GUL can be a good fit. All the components are guaranteed.
The 4 main guarantees with Secure Lifetime GUL 3 are as follows:
(1) The premiums are guaranteed to stay level.
(2) The death benefit is guaranteed to stay the same.
(3) Minimum cash value guaranteed
(4) Guaranteed return of premium (if desired). 50% in year 20 and 100% in year 25.
“A New Class of GUL”
As AIG puts it in their brochure:
“It’s a new class of GUL with a unique combination of features and benefits. And it’s designed to provide you with security and peace of mind – whether you die too soon, live too long or get sick along the way.”
AIG’s GUL is usually one of the most competitively priced on the market. It also has a unique rider – Lifetime Income Solution – not offered by other carriers.
This GUL allows you to select the guaranteed age up to 121. The lower the guaranteed age, the lower the premium.
Secure Lifetime GUL 3 Riders
In addition to the same riders available with Select-a-Term, the riders below are available with the GUL product. The two riders below are available at an extra cost.
Lifetime Income Solution Rider
This rider is considered the “longevity rider” since it protects you against the possibility of outliving your retirement income.
This rider has the following key features:
– Allows withdrawals up to 10% of the death benefit each year.
– Payments are typically tax free (up to the premiums already paid).
– Remaining death benefit – if any – will be paid to your beneficiaries.
Accelerated Access Solution
This living benefit rider protects you against the high cost of chronic illnesses. This rider allows you to access the death benefit. It does not require a qualifying condition to be permanent in nature.
- You can select any amount between 50% and 100% of the policy face amount
- There are three benefit payment options.
- Waiver of premium when owner meets the chronic illness requirement.
- You do not need to show receipts. Benefits are paid regardless of the costs incurred.
- 90 day waiting period.
Guaranteed Issue Whole Life
This product is for people ages 50 to 85 only. If you have a serious health condition and have been told you are uninsurable, then this product could be right for you.
Guaranteed Issue Whole Life is a “final expense” policy that will pay for funeral and other related expenses.
The maximum policy amount is $25,000.
This Guaranteed Issue Whole Life is different than AIG’s other life products. The main features are:
- You won’t be declined coverage.
- No exam or health questions are required.
- Premiums are guaranteed level.
- Living Benefits such as the Accelerated Death Benefit rider
- Graded Death Benefit: The death benefit during the first 2 years is 110% of the premiums paid. In the 3rd year and beyond, the full death benefit is paid.
AIG has one of the most competitive guaranteed issue life insurance products on the market when it comes down to price. We’re big fans of this product as it’s very easy to apply for and helps a significant portion of consumers who need life insurance who otherwise can’t qualify.
Pros and Cons of AIG’s Life Products
- Flexibility and customizable products
- Consistently low rates
- Innovation and cutting edge product design and technology
- Streamlined application process
- Overall, lenient underwriting
- Very strong riders and built-in policy provisions
- Lower financial ratings than many top-tier carriers (still very strong though)
- Extremely large company; sometimes customer service issues
AIG Life Insurance Review Conclusion
When shopping for life insurance, AIG is usually among the lowest cost carriers. They have products that fit almost every need. From term to universal and whole life, they have a broad range of innovative products.
For term, guaranteed universal life and guaranteed issue whole life – they are almost always competitive and a great choice to protect your family.
Sometimes, a blend of more than one product is the best solution. If you’re not sure which product is right for you, please contact us.