American United Life Insurance Company Review

AUL is one of our picks for the top whole life insurance companies. In the following American United Life review we will focus on the company’s history, strong ratings, life insurance policies, and the policy riders offered so that you can make an informed decision on who the best life insurance company is — based on your unique need, goals and objectives.

About American United Life Insurance Company

American United is a OneAmerica Company. OneAmerica is an over 145-year-old company and is one of the fastest growing mutual insurance companies in the U.S.

What is a mutual insurance company?

Mutual insurance companies are owned by policyholders, rather than shareholders, as is the case with publicly traded companies. Rather, mutual insurance companies and policyholders share in the ownership rights of the company, as well as take part in the company’s profits through dividends.

Mutual companies are privately held and operate for the sole benefit of policyholders, rather than for the benefit of stockholders.

American United Life pays an annual cash dividend to policyholders. The amount of dividend to be paid to participating policyholders is determined by the board of directors.

The first step to find the best life insurance is to get familiar with all the players in the industry. At Insurance and Estates, we have compiled different life insurance reviews, including our picks for the best dividend paying whole life insurance companies.

AUL Financial Ratings & Strength

American United Life Insurance maintains excellent financial ratings from independent rating agencies, demonstrating its strong financial foundation, solid risk management practices, and ability to meet policyholder obligations.

AUL’s current financial ratings:

• A.M. Best rating: A+ (Superior) – 2nd highest of 15 possible ratings, reaffirmed August 2023
• Standard and Poor’s rating: AA- (Very Strong) – 4th highest of 22 possible ratings, reaffirmed August 2023
• BBB rating: A+

These impressive ratings place AUL among the top 8% of U.S. life insurers for financial strength. A.M. Best rating of A+ signifies that OneAmerica and AUL have a strong financial foundation and creditworthiness. The company is properly diversified and funded to provide long-term security and peace of mind to policyholders.

Recent Financial Performance

OneAmerica Financial, AUL’s parent company, reported a 30% year-over-year growth in core adjusted revenue in 2023, with double-digit growth in Individual Life and Financial Services sales. Customer retention was an impressive 94%, highlighting strong client satisfaction and trust.

The company paid out nearly $7 billion in benefits to clients in 2023, demonstrating its commitment to fulfilling its promises to policyholders.

AUL Products Overview

OneAmerica provides long term care solutions through The State Life Insurance Company. Annuities and life insurance are offered through American United Life Insurance Company.

Annuity Products

• Fixed Annuities

Life Insurance

• Term Life Insurance
• Whole Life Insurance
• Universal Life Insurance
• Variable Universal Life Insurance
• Long Term Care Life Insurance

AUL Life Insurance Policies

American United Life offers excellent whole life insurance, the company offers both term life and universal life. Although there are benefits to both types of coverage, in our opinion there is a clear winner in the battle between term life vs cash value whole life insurance.

AUL Term Life Insurance

Term life insurance allows you to leverage a relatively small monthly premium for a large guaranteed death benefit with a lower initial cost than permanent life insurance.

Key Features:

• Available for ages 18-90
• Term lengths: 10, 15, 20, and 30 years
• Renewable to age 90
• Straightforward, affordable protection

AUL’s term life insurance includes a conversion option that allows the insured to convert all or a portion of the policy to permanent coverage without a new medical exam. The advantage of conversion term life insurance is you can get at least some type of protection in place and when your income improves you can convert the term to a superior whole life or universal life policy.

AUL Universal Life Insurance

Universal life insurance is a permanent life insurance type that offers the following benefits:

Cash Value: Growing cash value that can be withdrawn or borrowed against.

Flexible Premiums: Premiums can be increased or decreased depending on your financial health.

Adjustable Death Benefit: You can raise or lower your death benefit and change the selection on how your death benefit payment will be paid to your beneficiary.

Variable Universal Life (VUL):

AUL now offers Variable Universal Life insurance with these additional features:

• Permanent coverage with flexible premiums
• Investment options for cash value growth
• Adjustable coverage levels based on changing needs
• Customizable investment strategies for personalized financial planning

AUL Whole Life Insurance

With 3 different whole life insurance policies to choose from, including additional enhancements and riders, AUL is sure to have a policy for everyone, including 10 Pay Whole Life, Whole Life to age 121 and Whole Life to age 100.

Whole Life Product Options:

• Legacy Whole Life
• Legacy 121 Whole Life
• Liberty Select

Whole life insurance provides specific guarantees including:

• Guaranteed death benefit
• Guaranteed cash value growth
• Guaranteed level premiums

Additional cash value growth is available through dividends. Although not guaranteed, American United Life has paid dividends to participating policyholders for many years.

Dividends are valuable and can be used to:

• Purchase paid up additions
• Pay Premiums
• Earn interest with the company
• Cash Out

Long Term Care Life Insurance

Issued by State Life Insurance Company, the policy is a LTC+LIFE Hybrid. You can read about by clicking on State Life review over on our life insurance reviews page.

Long term care is one of the leading causes of financial distress and will destroy the best laid wealth building and legacy creating plans if you do not factor in how you are going to deal with the potential need for long term care. For Americans over age 65, there is around a 50% chance that they will need some form of long term care. As people are living longer, that rate will most likely climb.

And long term care is not cheap. You are probably looking at paying around $100,000 a year for a nursing home and $50,000 a year for assisted living. And according to a 2016 Genworth report, in home care runs around $3,800 a month. And these numbers go up every year with inflation. In 10 years time, at 5% inflation, you are looking at almost double the costs.

So what can you do? The first step would be to get informed. We can help you with the life insurance long term care planning side. Simply reach out to us by phone or email to get started.

Benefits of AUL Whole Life Insurance

Additional Benefits of Whole Life Insurance

Tax free life insurance policy loans

You can take out a tax free life insurance loan by using your cash value as collateral. There is no limit as to what you can do with your policy loan, but we would recommend using it to buy additional income producing assets.

Like its fellow mutual companies New York Life and MassMutual, AUL practices a non-direct recognition approach to life insurance policy loans. Even if there is an outstanding policy loan, AUL continues to pay the same dividend on the cash value. This allows your cash value to continue to accumulate interest and dividends, while simultaneously allowing you to use your policy loan somewhere else. In essence, your money is being put to work two places at once.

How many financial products allow your money to work for you in two places at once? It is this unique feature that makes life insurance an asset that should be part of any diversified portfolio.

Tax deferred cash value growth

The Internal Revenue Code Section 7702 is all about cash value life insurance. One of the incentives offered by the code is that your cash value grows tax deferred. And as mentioned above, policy loans are income tax free. Therefore, if you use policy loans to access your cash value you may never have to pay taxes on your gains.

One word of caution, beware of over funding your policy and creating a modified endowment contract (MEC). If your policy becomes a MEC, many of the provisions of the IRC will not apply to your policy.

Tax free death benefit

The life insurance proceeds from your death benefit go to your beneficiary income tax free. A death benefit is taxed if your estate exceeds the federal estate tax exemption limit. If you have a large estate, careful asset protection using an irrevocable trust may be necessary.

Policy Riders & Options

American United Life Insurance Riders

Living Needs Benefit (Accelerated Death Benefit) Rider: At no additional cost, this living benefit pays out a portion of the death benefit if the insured is diagnosed as terminally ill with a life expectancy of 12 months or less.

Accelerator Paid Up Additions Rider: Paid up additions allow the purchase of paid up additional life insurance through additional premium payments or dividends.

Contact Information

Conclusion

American United Life Insurance Company, as part of OneAmerica Financial, stands out for its robust financial strength, diverse life insurance offerings, and strong customer retention. AUL’s top-tier ratings from A.M. Best (A+) and Standard & Poor’s (AA-) place it among the top 8% of U.S. life insurers for financial stability, providing policyholders with confidence in the company’s long-term security.

As a mutual insurance company, AUL operates for the benefit of its policyholders rather than shareholders, allowing for potential dividends and a focus on long-term value. The company’s non-direct recognition approach to policy loans is particularly advantageous, enabling policyholders to use their cash value while still earning dividends on the full amount.

AUL offers a comprehensive range of life insurance products, from term life for affordable temporary coverage to various permanent solutions including whole life, universal life, and variable universal life. This diverse product lineup, combined with flexible features like conversion privileges and customizable riders, allows individuals to find solutions tailored to their specific financial goals and protection needs.

The company’s impressive 94% customer retention rate and strong growth in recent years reflect client satisfaction and trust in AUL’s products and services. With nearly $7 billion paid in benefits to clients in 2023, AUL has demonstrated its commitment to fulfilling promises to policyholders.

If you have more questions or would you like to see an illustration of American United Life or any of the other top cash value life insurance companies we represent, please give us a call today for a free life insurance consultation with an advanced markets professional.