AIG Guaranteed Issue Review: Top 7 Must-Know Facts

AIG Guaranteed Issue Review
AIG Guaranteed Issue Review: Top 7 Must-Know Facts

Black and white AIG logo

There comes a time when we start to think about what life looks like after a loved one is no longer with us or personally think what financial situation would my family be in if I am no longer here.

If you have done your research and learned about how much end of life expenses are then you know these costs could start to cause concern that you may leave a burden to your loved ones or a financial mess may be left for you to pay.

The issue when most look into a final expense policy is that they have been diagnosed with a health condition that is either terminal or very high risk for an insurance company to want to insure. This is when a guaranteed issue policy comes into play.

AIG Guaranteed Issue Review

AIG was established in 1919 in Shanghai, China by an American named Cornelius Vander Starr, in 1926 an office was opened in America and eventually expanded into South America.

In 1939 once the world markets were very unpredictable due to World War II the company decided to move the headquarters to New York City, New York.

In 1969 the carrier enter into a public offering on the New York Stock Exchange.

How Safe is AIG?

Since the 2008 financial crisis, the company has rebounded to find itself in a stronger position than where they once were. New systems and a more effective way of business have helped cement AIG as one of the top companies in the financial services world. AIG is also known as American General.

AIG has many financial products but for this article, we will focus on permanent life insurance with no medical questions that are meant to cover the insured’s final expenses.

Company Details

  • Established: 1919
  • Financial Rating: A (excellent)
  • Headquarters: New York City, New York

Green Statue of Liberty

Guaranteed Issue Whole Life Insurance

This product is meant for seniors who have a condition that most carriers would consider uninsurable.

Quick Facts

  • Age Eligibility: 50 – 80
  • Coverage amount: $5,000 – $25,000
  • State Availability: 49 states (excluding NY)
  • Waiting Period: 2-years
  • Medical Exam: No
  • Health Questions: No
  • Builds Cash Value: Yes

Why is Guaranteed Issue Beneficial?

Guaranteed Issue Whole Life (GIWL) is a permanent policy with features locked in to help create peace of mind for the insured and their family. With guaranteed acceptance, price lock, coverage lock, and a cash value that builds this is a very attractive option for seniors planning their end-of-life expenses.

When someone has a health condition that is considered uninsurable it may feel hopeless to find coverage to protect your family from this financial burden. This is when a guaranteed policy comes into play and is so valuable. Within minutes you can apply for and receive coverage to pay for final expenses.

Some other policies that are marketed as final expense insurance for seniors are considered term life plans. Term life insurance is not pertinent and expired either after a set period of time or once the insured reaches a certain age. Be very cautious of using a term plan as your solution for final expenses.

No Medical Exam & No Health Questions: No final expense insurance plan will require a medical exam of any sort. The most wonderful feature about guaranteed issue whole life insurance is that there are NO medical questions either, so you can confidently know that you will be approved.

Price Lock: The price that you receive upon getting the policy will remain the same for your entire life. There will be absolutely no rate-hikes to look out for.

Coverage Lock: The coverage amount that you take out will not fluctuate. The amount initially taken out will remain the same as long as the monthly premiums are paid.

No Expiration: Since this is a permanent policy you can rest assured that the money will be there for your loved ones when it’s needed.

Cash Value: A cash value will accumulate over time. You will be allowed to take a loan out against this amount if you wish.

Affordable Coverage: Another beneficial aspect is that it comes with smaller death benefit options as opposed to a large traditional policy. This makes final expense insurance much more affordable than other coverage options.

30-Days Risk-Free: Almost all life insurance policies have a 30-day money-back guarantee just in case you have buyer’s remorse or find a better plan elsewhere, which is also the case with this AIG policy.

care taker walking outside with elderly woman

7 Must-Know Facts

1. Two-Year Waiting Period

This would be considered to be one of the main drawbacks to guaranteed issue plans in general as they all have at least a 2-year waiting period.

In the world of billion-dollar insurance companies looking to make money, there is always give and take when working with these carriers. The trade-off here is that they are willing to insure those who have a high-risk condition but they place a two-year waiting period on full coverage.

The waiting period begins the day your policy is active. If you were to pass away anytime during this two-year waiting period the carrier will distribute to your beneficiary all the premiums you have paid plus 10%.

As mentioned there is give and take when working with these companies, this is a prime example of that. Your beneficiary does not lose money and earns 10% but when insuring a high-risk condition this is a way of the insurer hedging their risk.

In the case of an Accidental Death during this waiting period, the full face amount will be paid. Most carriers have a detailed description of what qualifies as an accidental death. Ask your agent to learn more about what qualifies as an accidental death.

2. Premium Payments Stop at or Before Age 90

Depending on the age you received initial coverage and the amount of coverage you applied for, there will be a time when you no longer have to make premium payments.

The plan will still be in effect but no more monthly payments will be required. This is a newer feature that is offered as an advantage to the insured.

Below is a chart that illustrates how this works:

Male

Maximum Payment Age

Issue AgeDeath Benefit Under $15,000Death Benefit Over $15,000
Pay Until The Age Of:Pay Until The Age Of:
508283
558482
608684
658583
708786
758786
808989

Female

Maximum Payment Age

Issue AgeDeath Benefit Under $15,000Death Benefit Over $15,000
Pay Until The Age Of:Pay Until The Age Of:
508283
558482
608684
658583
708786
758786
808989

3. Two Included Riders

A rider is an additional benefit added to the plan that extends coverage in certain areas. There are 2 riders that are included with every GIWL plan from American General, both of which are uncommon for guaranteed issue.

Chronic Illness Accelerated Death Benefit

This pays a one-time lump-sum of up to 25% of the face amount of the policy. This money can be used to pay for anything the proposed insured deems necessary. The remaining death benefit will be paid to the beneficiary once the policyholder has passed.

Chronic illness is defined as not being able to do 2 out of the 6 activities of daily living. These activities include eating, bathing, getting dressed, toileting, showering, transferring.

*Chronic Illness Rider limited to the total premiums paid for the policy up to 50% of the coverage amount.

Terminal Illness Accelerated Death Benefit

This feature pays 50% of the policy face amount in the year the benefit is accelerated. The remaining policy amount with this benefit will be paid to the beneficiary after the insured’s death.

This additional benefit is important for many reasons but if you do receive a terminal diagnosis and would like to have a chunk of money to pay for important bills, this would be an option.

If death is due to suicide, premiums are returned to the beneficiary.

You will be hard-pressed to find a no medical question product in the market today that offers these living benefits!

4. No Paper Application

Over the phone, in about 15 minutes you can have your application completed and your policy issued within a few business days.

You will be able to complete the application through an e-sign process that requires you to have access to your email or you can complete a simple voice signature over the phone.

This is an extremely simple process and aligns with what we do here at Willamette Life. We have access to many carriers and can shop and compare the best policy for you whether it is AIG or another highly rated insurance company.

Once we have found the product that is a perfect match for your health and budget we can then qualify you simply over the telephone. Our agents will help walk you through the entire process.

No medical exam, paper application, or leaving the comfort of your own home!

5. Insured must be able to sign their name

It is critical for the insured to comply with the rules and guidelines set in order to get coverage. A family member is allowed to buy, pay for, and facilitate the policy for the insured but one major factor to be in compliance is that the insured needs to be able to sign their name.

writing a check

For example, if the insured is in a coma or is not in their right mind to understand what they are doing, the policy is not in compliance and cannot be issued. If the policy is not signed by the insured (forged signature), coverage might be awarded but once the insured passes away the carrier has the right to investigate specific claims to confirm compliance.

Always stay in compliance with the rules and guidelines of the insurance companies. If you don’t your family and loved ones may not receive the payout that was intended for them.

6. The Insured Needs to be the Owner of the Policy

When we work with clients this is a question that often comes up. It is key to understand and follow the rules that are required to obtain a policy.

  • Insured must be the owner of the policy
  • The payor can be different than the insured
  • Social Security number is required

With these rules, a child or spouse can buy a policy for someone but the policy owner needs to be the person who will be covered by the policy.

You can pay for the monthly premiums without being the policy owner.

7. Payment Options

This specific product is very flexible when it comes to payment options. While many other insurance companies that provide final expense plans for seniors require an automatic bank draft, AIG’s GIWL does not.

The following methods are accepted forms of payment:

  • Bank Draft
  • Credit Card
  • Social Security Debit Card

The payment date can be scheduled to match the policy’s effective date on the bank draft option only.

Is AIG Insurance Good?

This product is a great option for those who need guaranteed issue life insurance. However, this is not the case with most people as many can qualify for coverage that is less expensive with no waiting period. 

At Willamette Life, we have access to many carriers who are willing to insure all different types of health conditions.

Why this matters:

For example, if you have COPD one company may say that they will not cover that health condition, and another carrier will not even ask about that condition. There is no one size fits all carrier, it truly depends on your personal medical history.

The first thing we do is attempt to get our clients day one coverage. If you have health conditions that will raise red flags to the carrier, then we will work through all carriers and find the best match for you. If every company we work with will not insure you then yes we would turn to a company that offers a great product with no medical questions.

But always attempt for day one coverage and the only way you will know if you can gain immediate coverage or not is by talking with an independent agency that specializes in this niche.

For guaranteed issue coverage we believe that AIG is the best carrier on the market because of the living benefits offered coupled with a low price point. This is your best option if you cannot qualify for day one coverage.

ipad and computer with a cup of coffee

Quotes and Comparisons

Below are monthly pricing for 3 carriers that offer a similar guaranteed product with no medical questions and a two-year waiting period.

These two other companies do NOT offer the riders that AIG does.

Male

$10,000 of Coverage

Issue AgeAIGJohn HancockGreat Western
50$52NA$59
55$57$73$64
60$63$82$75
65$84$105$92
70$98$135$119
75$138$175$158
80$246$232$227
85NANANA

Female

$10,000 of Coverage

Issue AgeAIGJohn HancockGreat Western
50$36NA$49
55$43$50$56
60$50$59$66
65$62$74$80
70$74$95$102
75$107$129$138
80$175$180$190
85NANANA

There are several other guaranteed issue whole life insurance reviews that can be found in our blogs including John Hancock and Great Western.

What is the Best Guaranteed Issue Life Insurance?

The truth is, American General has one of the best guaranteed issue whole life insurance products on the market. This plan from AIG has benefits that other, similar plans, do not.

What sets this AIG life insurance plan apart from the competition is the low price and the riders that are built-in. 

Other insurance companies that offer GIWL plans that rival AIG’s rates are Gerber Life Insurance and Mutual of Omaha.

Gerber and AIG can both be found through an independent agent while Mutual of Omaha’s guaranteed issue life insurance can only be purchased through the company itself.

This brings me to my next point.

How Does Someone Purchase a Policy?

Life insurance can be bought in three ways.

Directly from insurance companies. Typically these policies have guaranteed acceptance with the same price you could get from an independent agent.

From a captive insurance agency. This would be from an agency that sells products from one insurance carrier only. So if there is a plan that is better for you, this agent will not be able to sell it to you and probably doesn’t even know about it!

From an independent agency. This type of agency is able to represent multiple insurance companies. This benefits the consumer because these agents are able to shop around for you to find you the best policy to meet your needs.

AIG Direct vs. Willamette Life

AIG Direct provides this plan at the same exact cost as an independent agency, like Willamette Life. The difference is that by going with AIG Direct you will not have access to other plan options.

With AIG Direct you will not have an independent agent guiding you through the process and searching for a policy that fits your specific needs.

Willamette Life is independent which means our job is to look at 5, 10, or even 15 companies to find you the best rate that you can be approved for.

The biggest thing to note here is that you could be able to qualify for a plan that has immediate coverage and is NOT guaranteed acceptance, meaning lower price and more benefits.

It is our recommendation to always go with an independent agency, like Willamette Life, who will be able to search through many products to match your specific health and coverage needs.

 

Person thinking

Final Thoughts

a. If an agent or company has steered you towards this plan make sure to talk with an independent agent that specializes in final expense insurance. There is a good chance that you will be able to find day-1 coverage that comes with more benefits and a cheaper price point from another carrier.

b. If you have spoken with an independent agent and are unable to be approved for other plan options then this product is the best guaranteed issue life insurance on the market. We believe this because of the included living benefits and the low price point.

c. After reading this AIG Guaranteed Issue Review, the conclusion is to attempt to find immediate coverage but if you cannot, this product is your absolute best option.

Speak with an independent agent at Willamette Life, call us at 844-576-0019.

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