Usaa Life Insurance: Is It Worth The Hype?

USAA provides insurance and financial services to U.S. military members, veterans, and their families. Its life insurance products are available to the general public. USAA offers term life insurance and three different permanent life insurance policies. The company has an A++ rating from AM Best, indicating superior financial stability. Its life insurance rates are higher than most competitors, and it has limited options for no-exam coverage. USAA's level term life insurance is highly rated, especially for military members, as it includes benefits such as expedited coverage approval during deployment and a $25,000 payment for certain severe injuries.

USAA life insurance pros and cons

USAA is a well-known insurance provider for members of the U.S. military, veterans, and their families. However, USAA life insurance is available to everyone, regardless of military service. Here are some pros and cons of USAA life insurance:

Pros

• Additional benefits for military members and their families: These include expedited coverage approval during deployment, coverage during wartime, a $25,000 severe injury benefit, and guaranteed coverage after leaving the military.
• Coverage for children: USAA's permanent life insurance policies include $25,000 in coverage for each child for less than $8 per month. Children can convert this coverage to a permanent policy when they get older.
• High coverage amounts: USAA's simplified whole life and level term plans offer death benefits up to $10 million.
• Financial stability: USAA has an A++ rating from AM Best, indicating superior financial stability and the ability to pay out claims.
• Low consumer complaints: USAA has a low NAIC complaint index score, indicating that it receives fewer complaints than other insurance companies of a similar size.

Cons

• Limited policy options: USAA offers term life insurance and three types of permanent life insurance, but with limited variations and add-on benefits.
• Limited no-exam coverage options: USAA has limited life insurance products that don't require a medical exam, making it challenging for individuals with pre-existing health conditions to obtain coverage.
• Minimum coverage amount: USAA policies start at a minimum coverage of $50,000, which may be higher than what some individuals need or can afford.
• Limited availability: USAA life insurance is only available in certain states and is restricted to military members and their families.

USAA life insurance plans

USAA offers five different life insurance plans: two term life plans and three permanent life plans.

Term Life Insurance Plans

USAA's term life insurance is available in two different policies: level term and essential term. The level term policy is a typical term life insurance policy, with terms ranging from 10 to 30 years and death benefits between $100,000 and $10 million. To qualify, you must be between the ages of 18 and 70. Health questions and a life insurance medical exam are also required.

USAA's essential term policy doesn’t have set terms. Instead, the life insurance coverage lasts from the time you purchase the policy until you reach age 39. Death benefits are fixed at $100,000. You must be between 21 and 35 years old to qualify for this coverage. The application includes health questions, but you don’t need to get a medical exam. Unfortunately, the essential term policy doesn’t include added benefits for military personnel.

Permanent Life Insurance Plans

USAA's permanent life insurance policies include simplified whole life, universal life, and guaranteed whole life.

Its simplified whole life insurance provides coverage ranging between $25,000 and $10 million. You can purchase a policy for anyone between the ages of 15 days and 85 years old, with coverage terminating at age 121. The policy requires you to answer health questions and get a medical exam, which differs from most other simplified life insurance policies that typically don’t require a medical exam.

USAA’s universal life insurance is underwritten by John Hancock Life Insurance Company. It offers a minimum coverage amount of $50,000. To obtain a policy, you must be between 20 and 90 years old, answer health questions and get a medical exam. Coverage may extend past age 121, but this will depend on underwriting. This policy isn’t available in New York.

USAA’s guaranteed whole life insurance is underwritten by United of Omaha Life Insurance Company. It’s available to applicants between the ages of 45 and 85 (or 50 and 75 in New York), and coverage lasts until age 120. Death benefits start at $2,000 (or $5,000 in Washington) and go up to $25,000. Because it’s a guaranteed issue policy, you don’t need to answer health questions or take a medical exam. This policy isn’t available in Montana.

USAA life insurance pricing

The cost of USAA life insurance depends on a variety of factors, such as age, health, location, and coverage options. The company provides a few ways to get a quote for its life insurance policies on its website.

USAA's level term life insurance for a 35-year-old low-risk male with $100,000 in coverage for a 10-year term starts at around $12 per month. The rates for this type of insurance are fixed, so there is no need to worry about increasing costs over the life of the policy. On the other hand, essential term life insurance starts at around $5 per month for a 21-year-old female, but the rates increase with each annual renewal.

USAA's website does not list prices for its permanent policies, but it does provide a basic comparison of the three options. According to the website, the universal life plan is the most affordable, while the guaranteed whole life plan is the most expensive.

A 20-year, $250,000 term life insurance policy from USAA costs around $15 per month, or $175 annually, for a female in good health. A 20-year, $500,000 term life policy for the same buyer costs $24 per month, or $290 annually.

USAA's term life insurance rates are higher than those of most other competitors. For example, a 20-year, $500,000 term life insurance policy for a 30-year-old female in excellent health costs $175 per year with USAA, compared to $150 with Legal & General America and $140 with Corebridge Financial.

USAA life insurance financial stability

The USAA Life Insurance Company has an A++ rating from AM Best, indicating superior financial stability and a strong likelihood of being around to pay out future claims. This is the highest possible rating and only seven of the 45 life insurance companies evaluated by Investopedia earned an A++.

The USAA Life Insurance Company's parent company, the United Services Automobile Association, also has an A++ rating from AM Best.

The National Association of Insurance Commissioners (NAIC) tracks the number of complaints state regulators receive about insurance companies. The NAIC's complaint index indicates that USAA has received fewer complaints than expected for a company of its size. Over three years, USAA's complaint index was 0.283, much better than expected, and only 10 of the evaluated companies had a lower index.

USAA has been in business since 1922, indicating longevity and financial stability.

USAA life insurance eligibility

USAA life insurance is available to everyone, including those with no connection to the military. However, USAA is primarily focused on serving military families, and its insurance products are designed with this group in mind. The company was founded in 1922 by a group of Army officers who wanted to insure their vehicles, and it has since expanded to offer a wide range of insurance and financial products.

USAA offers term life insurance and three types of permanent life insurance: simplified whole life, universal life, and guaranteed whole life. The simplified whole life policy is available to those aged 15 days to 85 years, while the universal life policy is available to those aged 20 to 90. The guaranteed whole life policy is available to those aged 45 to 85 (or 50 to 75 in New York).

USAA's term life insurance is available in two policies: level term and essential term. The level term policy is a typical term life insurance policy with terms ranging from 10 to 30 years and death benefits between $100,000 and $10 million. The essential term policy is for those aged 21 to 35 and offers a fixed death benefit of $100,000 until the policyholder turns 39.

USAA's life insurance products are available in all 50 states, although certain policies are not available in some states. For example, the Essential Term insurance coverage is only available in Texas, and the Universal Life Accumulator policy is not available in New York.

Frequently asked questions