AIG Life Insurance Review

American Insurance Group, better known as AIG, is a leading global insurance organization.

AIG Companies provides a wide range of property casualty, life insurance, retirement products, and other financial services to customers in more than 80 countries and jurisdictions. If you’re looking for an insurance product, there’s a good chance AIG companies will be able to help.

AIG Life Insurance 

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The company has more than 49,000 employees who work across the globe. This international approach has been part of AIG’s business since 1919 when American businessman Cornelius Vander Starr founded the firm in Shanghai. In 2019, a century later, the insurance giant excels in offering flexible and affordable life insurance to customers worldwide.

In 2019, AIG’s revenues exceeded $49.75 billion.

Here’s another number that can help put AIG’s size into perspective: Over the last five years, more than $40 billion in claims and benefits have been paid out by AIG’s American General Life Companies.

The History of AIG

AIG got its start in Shanghai, China, in 1919 as a general insurance agency called American Asiatic Underwriters.

Within two years, the firm’s American founder, Cornelius Vander Starr, added a life insurance division, and the business grew steadily. The company added branches in Southeast Asia throughout the 1920s.

In 1926, the company opened its first American office which did business as American International Underwriters Corp. From there, the company extended into Latin America.

In 1939, with World War II threatening the stability of markets throughout the world, the company’s headquarters moved from China to New York City.

The company’s expansion resumed after the war as the recovering economies of Japan and Western Europe offered new opportunities. In 1967, the firm combined its global operations into one firm, and the AIG name was born. Two years later, in 1969, the company went public.

Since then, AIG has added additional product lines, including transportation, energy, and entertainment holdings in order to serve the needs of various specialized industries.

The company emerged from the financial crisis of 2008-12 as a more efficient, streamlined organization, having re-paid government loans by selling some of its peripheral holdings.

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Products Offered by AIG Direct

AIG Direct offers a wide range of products and services to both the individual and business markets. For individuals, AIG Direct’s offerings include:

• Accident and Health Insurance – Accidental death and dismemberment insurance can help offset the financial burden that is faced when a loved one passes away suddenly and unexpectedly in a disaster. This type of coverage will typically pay out an additional sum of money if the insured’s death is due to an automobile incident as opposed to sickness or other natural causes.
• Term Life Insurance – Term policies will cover an individual for a set amount of time, such as 10 years, 15 years, 20 years, or even 30 years. In most cases, term life insurance is very affordable coverage – especially if the insured is young and in relatively good health when applying for coverage. This is because term life provides only pure death benefit protection, without any type of cash value build up. Term life insurance can be a great way to obtain a high amount of coverage for a low premium cost.
• Whole Life Insurance – Whole life is a form of permanent protection. This type of coverage provides a death benefit, along with a cash value component. As its name implies, whole policies are designed to cover an insured for the “whole” of his or her life. This means that, as long as the premium is paid, the coverage will remain in force. The monetary value that is associated with a whole life policy is permitted to increase on a tax-deferred foundation – meaning that there is no tax due on the gain until the time of withdrawal. This can essentially allow the money to accumulate and compound at an increasing rate over the course of time. The whole policyholder is authorized to withdraw or borrow cash from the money value component for anything that he or she sees as okay. It is important to note, though, that any unpaid balance at the insured’s death will go against the amount of the death benefit that is given to the beneficiary.
• Universal Life Insurance – Universal life insurance allows policyholders both death benefit and cash value – however, these policies are much more flexible than whole life in that policyholders can choose when to pay their premiums, as well as how much to pay. (This can, however, affect the amount of the death benefit and value within the policy).

AIG’s Ratings

AIG holds high ratings from the insurance company rating agencies.

These include the following:

Ratings as of 5/4/18 Standard & Poor’s 21 ratings are a measure of claims-paying ability and range from AAA (Exceptionally Strong) to R (Regulatory Action).  A.M. Best’s 15 ratings are a measure of claims-paying ability and range from A++ (Superior) to F (in Liquidation).

Ratings can be objective indicators of a company’s financial strength and can provide a relative measure to help investors select the best insurer for their needs. Ratings are subject to change at any time and are not a guarantee of the future financial strength and/or claims-paying ability of the company.

Note on variable annuities: Ratings do not reflect and are not indicative of the variable portfolios’ performance. Only the variable annuity’s fixed account rates, protection features, and income payments are backed by the claims-paying ability of the issuer.

Better Business Bureau

While the rating agencies, above, look at a company’s internal financial health, the Better Business Bureau and other similar sources can give you an idea about how a company works with its customers.

The BBB has rated AIG A-, basing its rating on AIG’s commitment to resolving customer disputes. The BBB states that its ratings do not reflect an analysis of a company’s product quality, just its interaction with its clients.

Considering AIG Direct

AIG Direct offers a nice array of insurance products, and AIG has good ratings from the insurer ratings agencies. That means it should be a reliable partner for your long-term insurance needs.

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But, as with any insurer, it’s important to consider your specific insurance needs and to find out whether AIG has a history of meeting the needs of clients whose applications may look similar to yours.

While all insurance companies’ underwriters seek to identify the risk an applicant poses, each company has a different approach and, over time, these variances can turn into trends that we can monitor.

You may like AIG more if…

• You have recently lost weight
• You have been diagnosed with diabetes
• You like applying for insurance online

You may not like AIG as much if…

• Previous generations in your family died of heart disease or cancer
• You have high cholesterol
• Need a quick decision on your policy

For example, some companies look more favorably on people who are overweight or people who have type 2 diabetes.

In the case of AIG, we have noticed applicants who have some adverse health conditions find it harder to get approval. So, if your health history includes struggles with high cholesterol, for example, you may be frustrated with AIG’s response.

AIG also tends to emphasize an applicant’s family health history more than some of the other industry leaders.

If previous generations of your family struggled with heart disease or diabetes, AIG may be more likely to place your application into a higher-risk category, which means higher premiums if you get approved for coverage.

Since it can take weeks to go through the underwriting process, this can be frustrating, especially if you’ve taken the time to get a medical exam. If AIG tends to fall short in your specific area of need, you should keep looking.

On the flip side, if AIG does well in the areas where you need a little help, it’s well worth your time to apply.

If you’ve recently lost weight, for example, AIG may be more likely to classify you in a more favorable health category. The same goes for diabetes.

Lastly, AIG Life Insurance 

To get the best coverage for your needs – regardless of your health condition – it is always best to make some comparisons.

Any time you are making a major purchase, you want to ensure that you’re getting the very best deal. You probably wouldn’t buy a car, or even an appliance, sight unseen.

Yet with life insurance, it’s harder to make comparisons because it’s a less tangible product. Once you’ve bought it, it’s easy to forget that your policy is in place.

But just like any other product, you’ll be depending on your purchase to do its job: to protect the people you love for decades, or perhaps for the rest of your life if you’re in the market for permanent life insurance coverage.

If AIG isn’t right, then we can direct you to other companies, like Banner. 

It’s worth it to take your time and make sure you’re finding the right coverage, for the right amount of time, at the right price.