AAA Universal Life Insurance Review

AAA offers two types of universal life insurance policies, LifeTime Universal Life and Accumulator Universal life. Both of these are permanent life insurance policies, meaning they last the rest of your life. If you’re a AAA member you may be able to get a discount, but you don’t have to be a member to apply. 

AAA LifeTime Universal Life

This is basically a Guaranteed Universal life (or GUL) policy. It offers level premiums for the life of the policy and it accumulates a little bit of cash value, but not a lot. It was designed to provide an inheritance for your heirs when you die, not accumulate cash value. Learn more how guaranteed universal life insurance works

Coverage amounts start at $100,000 and go up to $5 million.

To apply for a LifeTime Universal Life policy, you must meet with an insurance agent. The policy is fully underwritten, so that means you’ll also be having a medical exam. On the other hand, if you’re in terrific health and don’t smoke, you may get a good rate. 

An accelerated death benefit is included in the policy at no charge. If you are diagnosed with a terminal illness and are given less than a year to live, you can receive up to a 50% of the death benefit.

Optional riders include:

• Child term. Learn more about life insurance for children
• Disability of waiver premium
• Accidental death. Learn more about accidental death life insurance

As far as rates go, the AAA website gives an example quote of $75.91 a month. This would be for a 35-year old female in excellent health, non-smoker. The policy amount is $100,000. 

>>MORE: The Best 5 Insurance Companies for Guaranteed Universal Life Insurance (or GUL)

AAA Accumulator Universal Life Insurance

This is an indexed universal life insurance product, the Accumulator is designed to build cash value. It’s designed to supplement your retirement income and the cash value grows at a faster rate than it does with LifeTime Universal. It also gives you flexibility in how you pay your premiums. The minimum interest rate is 3%, which means this is the least you can earn. Learn more to understand why indexed universal life insurance policy is a great option for retirement savings.

This policy is also underwritten and you will have to answer health questions and possibly get a medical exam. AAA says the decision period is one to six weeks. To buy the Accumulator Universal life, you must meet with an agent. You won’t be able to get a quote, but AAA says that their 35-year old super preferred female (non-smoking) can get $100,000 worth of coverage for only $75.77 a month. 

There some flexibility in how you pay the premiums. You can pay a smaller amount (as long as the policy is funded), use the cash value to pay the premiums, or pay a larger amount so that you can accumulate more growth. 

There are some riders you can add:

• Child term 
• Waiver of monthly deductions if you become disabled
• Accidental death
• Guaranteed purchase option (you can increase the death benefit at a later date)
• Additional insured
• Terminal illness

You can access the cash value through withdrawals or you can take loans against it. 

If you have this policy and you die, your spouse will receive free AAA membership for the rest of their lives. 

An interesting caveat is that AAA life insurance is not actually owned by AAA. 

>>MORE: The Best 6 Insurance Companies for Indexed Universal Life Insurance (or IUL)

Last Thoughts

If you’re in the market for universal life insurance coverage and don’t mind answering some medical questions, AAA universal life insurance may work for you. It’s especially attractive if you’re looking for high amounts of coverage, or if you’re already a member of AAA. But be sure to shop around in case you can find a better rate. 

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