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American General (AG) is one of the nation’s largest insurance companies and is the second-largest issuer of life insurance in America. There are many reasons to consider this company if you are in the market for a life insurance policy.
But the number 1 reason to consider American General is that the company known for providing some of the lowest term life rates in the industry – even for people who have pre-existing health conditions. The company ranks as #3 nationwide offering the lowest term life rates compared to its competitors.
Overview and Company Profile
Who is American General?
AG’s roots can be traced back to Houston Texas where a small insurance agency owner named Gus Wortham, started the company with some help from his father and a few prominent business associates. Wortham took advantage of a ruling by the Texas Commission Appeals that allowed insurance agencies to sell multiple lines of insurance.
In 1926, American Common Insurance Provider was launched making it the only business in the Nation to underwrite fire, life, automobile and casualty insurance.
1945: After several strategic acquisitions, the company changed its name to American General.
In 2001, the company was acquired by American International Group (AIG). Today, American General is the life insurance division of AIG with more than 90 million customers.
American General Financial Ratings
Should I be Worried That AIG Owns American General?
In 2008 during the financial crisis, AIG received a lot of negative press about receiving a Government “bailout” to remain in business. Although American General is owned by AIG, the company operates separately from AIG and has never failed to pay a valid life insurance claim.
AIG along with several other prominent companies such as Bank of America, Goldman Sachs, Merrill Lynch and dozens of banks were rescued by the U.S. Government with billions of dollars of loans. To its credit, AIG paid their government loans back a year early and today remains a very financially stable organization.
AIG Financial Ratings
Standard & Poor’s – A+ (Strong)
Moody’s – A2 (Good)
A.M. Best – A (Excellent)
Fitch – A+ (Strong)
Life Insurance Products Offered By American General
AG sells many types of insurance products including, term life, universal life, indexed universal life and even fixed annuities.
Term Life Insurance is the least expensive type of insurance and is the easiest product to understand. Coverage is in effect for a fixed term or period of time. Terms are available from 5 years to 35 years. The death benefit is level and so is the price you pay for the entire term of the policy.
Please note: Term life insurance is offered in the state of New York under the United States Life brand.
American General Announces New Lower Select-a-Term Rates
New year, new lower term rates for 2021! AG continues to have some of the lowest rates and usually ranks #2 or #3 in the life insurance term wars.
Select-a-Term offers a unique mix of life insurance flexibility:
•Guaranteed level term coverage, including 10-year and 15, 20, 25, 30 years and now a 35-year term, with renewable coverage until age 95 for older clients
•Select-a-Term remains convertible to the earlier of age 70 or the end of the level term period
•Extended conversion privilege to permanent insurance of AG and US Life products for the first 8 years for 10-year term, or the first 10 years for term duration’s of 15 years and greater.
For those who no longer need their policy, AG offers offer 2 Return of Premium (ROP) options in Year 20 and 25. Expect 100% return of premium in Year 25.
Universal Life (UL)
UL is a type of permanent insurance that offers flexible options. These policies are interest-sensitive and give the owner the option to adjust the death benefit and the premium payments, to match the owner’s needs.
Premium payments are applied to a guaranteed interest-bearing account or cash value account. The account grows tax-deferred and can be accessed anytime by the owner. The cash value belongs to the policy owner, who may withdraw or borrow against it as provided by the terms of the policy.
AG has several guaranteed UL products known as the Secure Lifetime GUL, Secure Survivor GUL, Elite UL.
Indexed Universal Life (IUL)
Indexed Universal Life is perfect for the person who would like the possibility of higher returns. IUL works very much like universal life with the exception that the cash value account is linked to the performance of an underlying stock market index.
The cash value account can grow with the stock market within contractual limits called “Caps.” The policyholder will never receive the full growth of the stock market but it is a cost-effective life insurance plan with upside potential and downside protection.
If there is a market downturn, the funds in the account will not lose value. Not losing value is the “trade off” for limited stock market gains. AG offers 2 types of IUL products: Value + IUL and AG Extend IUL which is issued only if a term life policy is converted.
No Medical Exam Select-a-Term Policies
American General now offers no medical exam term life policies. For people who are looking for lower insurance amounts and don’t want the hassle of taking a medical exam, these policies could make buying life insurance much easier.
Coverage options are available from $50,000 to $99,000 for people who are between the ages of 20 to 59. Term policies are available for 10, 15, 30 and 35 years. There is no medical exam and no medical reports required from a physician. Once approved, most policies are issued within one week. However, you must be in good health to qualify.
Should You Buy An American General Life Insurance Policy?
Just like any financial product, not one company is the right fit for everyone. AG excels in having some of the lowest term life rates in the United States. Only Banner life and William Penn have lower rates in most competitive scenarios.
We often recommend AG for many clients with health problems. There are certain situations where American General is NOT the best company for people who are:
- Overweight
- Non-U.S. citizens
- Have a DUI or DWI on their driving record
- Family history of cancer or heart disease
- Mental health disorders such as anxiety and depression
American General is very competitive too. Beating most of their competitors such as TransAmerica, Principal and Lincoln Life with rates that are 10% lower. The company also offers great rates for smokers who are in good health.
If you are shopping for a life insurance policy from American General and want to compare prices please call to speak with an expert. We work with more than 30 life insurers and are not beholden to only one company. We can provide a free, consultative, approach to life insurance. Call us at: 914-633-1717
