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Tisha Collins is a fact-checker with a focus on accounting and finance. She also serves as a Media Analyst at Kinetiq, a media intelligence platform specializing in TV analytics and instantaneous measurement of brand performance in the digital world.
Our Take
USAA offers a unique suite of benefits designed to meet the needs of those who serve in the military. In fact, of the 91 insurance companies we reviewed, it won top billing for best life insurance company for the military. In addition to military-specific perks, policies are backed by USAA’s A++ rating for financial stability and the company has received very few complaints. Notably, you don’t need to be in or affiliated with the military to qualify for USAA life insurance.
In 1922 USAA was founded when 25 Army officers wanted to insure each other’s vehicles. Since that modest start, this organization has grown to provide insurance to millions of members of the military community. The name USAA stands for United Services Automobile Association, and since 2009 USAA has been working with military affiliated groups to connect with veterans, military members, and their families about their financial products and services.
USAA Life Insurance policies provide some valuable military-specific benefits at no additional cost to their members such as coverage during wartime, severe injury benefits, and the option to add coverage at a later date, without proving insurability (meaning, you don’t have to take a medical exam or answer questions about your health). Life insurance policyholders may also be eligible to receive dividends.
specifications AM Best Rating NAIC Score (avg.) Years In Business Policy Types Term, Universal (UL), Whole Accepts Credit Cards Why Trust Us Companies reviewed Features considered Data points analyzedWe identified 45 life insurance companies with strong financial stability and high customer satisfaction ratings and evaluated them based on 70 metrics, collecting over 3,000 data points. This research allowed us to rate and rank the best life insurance companies and provide you with unbiased, comprehensive reviews.
The National Association of Insurance Commissioners (NAIC) tracks the complaints that insurance companies receive and uses the information to develop a complaint index. The NAIC complaint index is a measure of how many complaints a company has received relative to how many complaints it’s expected to receive based on its size.
If a company has a complaint ratio over 1.0, that indicates that the insurance company receives more complaints than expected for a company of its size. If the company receives a ratio below 1.0, then it received fewer complaints than expected.
USAA has a complaint index of 0.22 for 2021 which means it received far fewer complaints than expected. For comparison’s sake, Nationwide (0.263), New York Life (0.279), and State Farm (0.295) are all major insurance companies that also received fewer customer complaints than expected.
USAA shines when it comes to being reliable financially (which is a key trait to look for when purchasing a life insurance policy that can last decades). It received an AM Best score of A++.
Only nine of the 91 insurance companies we reviewed receive this score: USAA is in good company with New York Life, MassMutual, and State Farm.
To understand how USAA stacks up to competitors of similar size, we compared it with two rivals based on six commonly searched policy features.
| USAA | Allianz | American Fidelity Life Insurance | |
|---|---|---|---|
| Types of Coverage | Whole life, term life, universal life | Index universal life | Term life, final expense, whole life |
| Dividends for 2020 | $42 million | Not applicable | Not applicable |
| Online Application | Available | Not Available | Available |
| AM Best Rating | A++ | A+ | A- |
| Price for Term Policies | Excellent | N/A | Very Good |
| NAIC Complaint Index | 0.22 | 0.31 | .002 |
Term Life Insurance is a type of temporary coverage that lasts a limited number of years, such as 30, and is more affordable than permanent life insurance. USAA offers both Level Term V and Essential Term (not available in Arizona, Florida, or New York) policies:
If you are willing to undergo a more lengthy application process to save money on a USAA term policy, Level Term V is the way to go. Though you get to skip the exam with Essential Term, it’s only suitable for very short-term coverage since the cost increases every year and you can’t renew it once you turn 39.
Unlike a term life insurance policy, whole life insurance lasts your whole life as long as you continue to pay the scheduled premiums. Your death benefit is guaranteed throughout the life of the policy and the policy builds a tax-deferred cash value.
USAA also makes Mutual of Omaha’s Guaranteed Whole Life policy available to members, but does not underwrite this coverage itself.
USAA doesn’t offer universal life insurance itself but makes John Hancock’s universal life policies available to its members. A universal life insurance policy offers flexible but permanent coverage with a cash value that can last a lifetime if you pay sufficient premiums. Unlike whole life insurance, you can adjust or skip premium payments if needed without immediately causing the policy to lapse.
Guaranteed insurability riders let you increase the death benefit without having to re-qualify for coverage—meaning you don’t have to answer health questions or take a medical exam. USAA offers two at no additional cost:
You can attach USAA’s Term Life Insurance for Children Rider to your own policy and get up to $25,000 of coverage per child for all your children for $7.99/month. Once your child becomes an adult, they can convert the rider to permanent coverage that can last their entire life.
For an additional cost, USAA offers a waiver of premium rider that lets you skip premium payments if you become disabled.
USAA offers an accelerated death benefit rider for terminal illness at no additional cost. With a terminal illness rider, you can access a portion of your death benefit when diagnosed with a terminal illness to use for whatever you want while you’re still alive.
You can connect with USAA over the phone or via mail. Their main phone hours are Monday to Friday, 7:30 a.m to 8:00 p.m CT.
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To gain insight into life insurance pricing, we gathered quotes across a range of insurers for healthy males and females aged 25, 40, and 55 years old for 30-year $250,000 term policies. Based on this analysis, USAA’s term policies cost slightly more than average. However, that cost may be well worth it if USAA’s value-added features like guaranteed insurability and injury benefits are important to you.
If you’re in the military, a USAA life insurance policy may serve your needs well. Active servicemembers might especially appreciate the no-cost military benefits, such as accelerated issues for servicemembers preparing to deploy, coverage during wartime, and severe injury benefits for injuries sustained in the line of duty.
Even if you’re not in the military, USAA may still appeal. That the company offers guaranteed insurability riders at no additional cost is uncommon and valuable. Most life insurance companies charge extra to allow you to increase the death benefit later, but not USAA.
But if you’re looking for long-term or high coverage no-medical-exam life insurance, you’ll need to look elsewhere. USAA also doesn’t directly offer common coverage types like universal life insurance, variable universal life, and indexed universal life.
We designed a comprehensive rating methodology based on consumer priorities and life insurance company fundamentals to rank more than 90 insurers across five general categories: financial stability, customer satisfaction, product and feature variety, the overall buying experience, and cost.
To do this, we collected over 5,000 data points and scored each company based on 55 metrics. We grouped metrics by category to see how insurers performed in each; we then weighted category scores to determine how companies performed overall.
