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AIG Direct Life Insurance Review

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AIG Direct life insurance review

Reader note: Insurance and Estates offers life insurance products from the same top life insurance companies (among many others), so we are a competitor to AIG Direct. With that said, we have done our best to present as thorough and unbiased a reveiw of AIG Direct as possible.

Table of Contents:


What is AIG Direct?

AIG Direct is a subsidiary of American International Group (“AIG”).  Like the name suggests, AIG Direct lets consumers purchase life insurance directly from AIG (hence the name)—bypassing the independent insurance agents who have traditionally marketed policies for AIG (and other insurers).

Basically, when you buy life insurance from AIG Direct, you are purchasing an AIG life insurance policy from the source.

When AIG Direct initially opened up shop back in the 1990s, it functioned mostly as a call center under its old name Matrix Direct. In fact, AIG had such a bad reputation due to the 2008 financial crisis, it kept the name Matrix Direct for years, slowly transitioning to AIG Direct around 2013-2014.

Nowadays, AIG Direct has a substantial online presence and plays a greater role in AIG’s life insurance marketing.  The heart of the operation remains the AIG in-house insurance agents who communicate with consumers on behalf of the company and steer prospective policyholders through the application process.

AIG itself is a one-hundred-year old insurance giant with nearly 90 million insureds worldwide.  Though now based in the United States, AIG was originally founded by an American living in Shanghai and today operates in 80 countries throughout the world.

Along with selling insurance, the company sponsors everything from golf in the U.S. to rugby in New Zealand—and museums and art institutions worldwide.

What Types of Insurance Does AIG Direct Sell?

AIG is a huge insurance company, and it sells a lot more than just life insurance.

Home, auto, and yacht coverage; personal and commercial liability insurance; health insurance, coverage for high-value personal property, and a range of investment options are all on AIG’s menu (and a lot more than that, too).

But you can’t get most of it through AIG Direct.

AIG Direct just sells life insurance.

Still, it has some variety to offer.  As with just about any online broker, you can get term coverage.

But AIG Direct can also sell the permanent policies you can’t get from most online agencies.

AIG Term Life

AIG’s term policies come in two basic flavors:  Select-a-Term and QoL (“Qualify of Life”) Flex Term.

Select-a-Term lets you choose from among 18 available term lengths—anywhere from ten to as long as 35 years, making AIG one of only a handful of companies offering 35 year term life insurance.

QoL Flex-Term features a living benefits rider that allows acceleration of policy proceeds if the insured is diagnosed with a chronic, critical, or terminal illness.

Both term offerings have level premiums and are available for new insureds between 20 and 80 years old, though term lengths are limited for older applicants.  Coverage amounts start as low as $50,000 and go up to as high as $10 million.

AIG term policies are renewable annually until the insured’s 95th birthday.  Of course, premiums get much more expensive after a policy’s initial term concludes, but the option to extend coverage is there if you need it.

Convertible

Both policies are convertible term life insurance, which allows the owner to convert to permanent coverage until an insured reaches age 70.  A conversion option gives the policyholder a contractual right to convert a term policy into permanent coverage by a specified date (with a corresponding increase in premiums and/or decreased death benefits).  If exercised, an AIG term policy can be converted to either whole life or universal life.

Return of Premium

For new insureds under age 55 who purchase a Select-A-Term policy with a death benefit of at least $100,000 and an initial term of at least 20 years, AIG offers an optional return-of-premium rider.

If a policy that includes the rider reaches the end of its initial term, the policyholder receives a refund equal to the total premiums paid into the policy throughout its duration.  The money can be taken in cash or applied toward another policy.

Whole Life

Although not among the best whole life insurance companies, AIG does provide the basics you can expect with this type of coverage – guaranteed-for-life coverage, fixed premiums, and cash-value accumulation.

Guaranteed Acceptance

For applicants from ages 50 to 85, AIG offers a guaranteed-acceptance whole life policy.  Coverage levels only go up to $25,000, but the underwriting doesn’t require any medical screening.

Essentially, if you’re in the eligible age bracket and can pay the premiums, you can get coverage.

Like most guaranteed-issue life insurance policies, AIG’s has a two-year waiting period before full coverage kicks in.  If death occurs during the two-year window, the payout is equal to the total premiums paid to date, plus 10%.

Universal Life

AIG Life Insurance Company does offer Universal Life Insurance. However, AIG Direct does not train its agents in the different nuances of UL products.

Instead, what you will get is an agent trained in selling term life insurance and accidental death insurance, with very little, if any, knowledge of Universal Life.

(Please note, at I&E, we have agents well versed in the nuances of universal life and we do offer the various AIG Life Insurance products).

Now, when it comes to universal life, AIG offers a genuinely impressive list of alternatives.  There are eight different policies sold by AIG that fall under the universal life heading, each intended to fill a different niche.

While they mostly all use the same flexible universal life structure, the policies vary in cash-value growth standard, available riders, and in the relative emphases placed on the death benefit versus cash-value accumulation.

Indexed Universal Life

AIG has received particularly high marks for its two indexed universal life offerings, which tie growth rates to an equity index.

And the Quality of Life (“QoL”) series includes three different policies designed with a focus on living benefits.

AIG also offers a few guaranteed universal life options, including a survivorship life insurance policy that pays out upon the death of the second of two insureds and is intended as a tool for efficiently transferring wealth to the next generation.

How Does AIG Direct’s Life Insurance Application Process Work?

One of the most important things to know about AIG Direct is that you’re not really purchasing life insurance online—at least not in the same way as most virtual brokers. The website has a lot of useful information, and AIG is pretty open about describing the life insurance products it offers.

But AIG Direct won’t let you find coverage without talking to a human being like some online agencies.  The point of AIG Direct’s site is to get potential purchasers in touch with AIG Direct’s in-house agents.

If you want a quote, you must talk with an agent.

The website has a “Get a Quote” tool that invites you to input some basic info (e.g., DOB, gender, tobacco use, height/weight, ZIP code, etc.).  But you don’t get to just provide the info and see a rate quote.

In fact, it doesn’t even ask you what kind of coverage you’re interested in.

The form does, however, require contact information. And, when you click “Get Your Free Quote,” you’re providing your consent for AIG’s in-house agents to contact you.

The “Get a Quote” tool’s disclaimer also includes this gem: “I understand that consent is not required to make a purchase.”  Say what now?

Realistically, it doesn’t make much difference if you skip the website and just start out calling AIG Direct.  The process ends up working essentially the same.

So, what is the process?

To begin, you’ll have a “life insurance interview” with an AIG representative.  During the call, you’ll need to provide the standard basic information, along with more detail about your financial status, lifestyle, personal health and prescription history, and family medical history.

Needs Analysis

AIG estimates that the initial interview takes about 10 minutes. Your AIG Direct agent is doing a “needs analysis,” which is sells jargon for discovering your hot button on why you want life insurance.

If, after providing your information and hearing the agent’s recommendations and initial premium quotes, you’re interested in buying an AIG policy, you’ll need to complete the formal application.

The application goes into greater detail and—along with the medical exam—is what AIG’s underwriters use to determine the precise premiums charged for a policy.

Remember, with one exception, AIG offers fully underwritten policies, rather than no exam life insurance.

AIG Direct is intended to streamline the application process as much as possible, but you’ll still need to undergo a medical exam.  The exams are similar to the physicals student-athletes take before participating in high school sports. They only take a half-hour or so, but you do need to provide urine and/or blood samples.

Once AIG has everything it needs, its underwriters review the application and exam results.  After a couple weeks, applicants receive a coverage decision and (if accepted) a formal offer of insurance with the precise premiums.

At that point, you make the final decision as to whether you want to purchase the offered policy.  If so, you’ll start making premium payments (which you can do online), and AIG Direct will officially issue the policy.

What are AIG Direct’s Strengths?

Strong, Secure Company:

When you purchase life insurance from AIG Direct, you know that it has a strong backing.  Though AIG dealt with a rough patch in 2008—when it posted a groundbreaking quarterly loss of over $60 billion dollars—the Federal Reserve cavalry came through with a $180 billion bailout, which AIG generously paid back a few years later.

AIG currently holds an A (“Excellent”) rating from A.M. Best and boasts an A+ rating from the Better Business Bureau.  If you’re going to shop for insurance from only one company, you could do a lot worse than AIG.

Wide Coverage Ranges:

Other than the guaranteed-issue whole life policy that’s limited to $25,000, AIG offers notably higher coverage limits for both its term and permanent policies compared to most insurers.

In either case, you can get coverage starting at $50,000 and going up to as high as $10 million.

AIG also serves a wide age range of new insureds.  Most policies are available for applicants anywhere from age 20 to 80.

And, if you’re in the market for term life, AIG offers helpful term-length flexibility—with terms available from 10 to 35 years (depending on the applicant’s age).

Plenty of Options:

If you shop for life insurance with most online brokers, your only option is term insurance.

And, even if you know term coverage is what you want, you don’t have many, if any, available riders to choose from.

It’s vanilla-flavored or nothing because the high-volume online broker model is built around selling bunches of policies with as little investment of agent time as possible.

On the other hand, AIG Direct gets you access to AIG’s impressive line of life insurance products.  There are two varieties of term coverage, guaranteed-issue whole life, and eight different universal life policies available.

If you want term coverage, you can choose a term policy anywhere from 10 to 35 years.  And AIG also offers multiple optional riders.

The children’s rider adds temporary term coverage for the insured’s children.  A waiver of premium rider lets you skip premium payments if you become disabled.

The accidental death rider provides supplemental coverage if death occurs due to a qualifying accident.

What are AIG Direct’s Weaknesses?

No Opportunity to Compare Rates: 

AIG Direct can show you policies issued by AIG and provide rate quotes from AIG.  As life insurance carriers go, AIG has a pretty decent variety.  But it’s ultimately just one company.

An independent broker who works with a large network of different life insurance companies can offer policies from multiple carriers.

This lets you compare and contrast policies’ pros and cons and see how the carriers’ stack up against one another.

If you only ever see the rates offered by AIG, you won’t know if another carrier could write a similar policy with lower premiums.

Different insurance companies can differ significantly in how strongly they weigh different underwriting criteria.

So, finding the company that evaluates you as the lowest risk can result in big savings over the life of a policy.

Questionable Customer Service:

Customer service is the only consistently negative item you run into when surveying reviews of AIG Direct.

As a big global corporation, AIG has to rely heavily on bureaucracy and standardization.

For consumers, that can make it difficult to get the right person’s attention when you need assistance.

Of course, you can make most policy changes and find answers to most questions online these days, but if you’d prefer to just make a quick phone call to take care of an issue, AIG Direct might not be the way to go.

Accidental Death

Another drawback of AIG Direct is that once they get your information they will work hard to sell you something, even if it is only accidental death insurance.

So, if you were originally contacted by one agent and now a new agent is ringing your phone, be on the alert that they might be calling only to sell you an AD&D policy.

Why Not Just Use an Independent Agent?

Even if you’re sure you want a policy from AIG Life Insurance Company, you don’t really gain much of anything by working with AIG Direct.

There are many independent agents—including online brokers—who market AIG policies.

The application process, underwriting requirements, and rates for an AIG policy will be the same if you apply through AIG Direct or through an independent agent.

But with an independent agent, you also get to see how AIG’s products compare to other carriers.

And an experienced independent agent can help in communicating with the insurance company and provide advice on which carriers’ policies are best-suited to your situation.

Competition is Good

A little competition usually works to the benefit of you, the consumer.

So, put yourself in the driver’s seat and give the team at I&E a call today. We will help you find the best company and policy for you, based on your needs and goals.

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