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American General Accidental Death Insurance Review
AG's ADD or AIG's Accidental Death Direct Insurance
This article was written to help those who are either considering purchasing an American General Accidental Death Insurance/ AIG Accidental Death Direct Insurance or have purchased one, and have a few questions about whether or not it’s the right insurance for them. You may also find our article on Accidental Death Insurance of interest.
If this describes you, then keep reading.
In reviewing American General Life Insurance Company, and specifically, American General's Accidental Death policy, it is important to start out with the positive features of American General, because, let’s face it, American General Life Insurance Company (AG) is one of the top ten life insurance companies in the United States with a company history that dates all the way back to 1850 and currently serves over 13 million customers. Collectively, as a company, American General Life Insurance has paid out over $38 billion dollars in claims and benefits, which means that if and when you need American General Life Insurance to pay on a claim, you can count on them to be there.
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American General’s accidental death insurance or AIG's Accidental Death Direct insurance is one of the most inclusive accidental death policies on the market today. The inclusion of what are called “living benefits” which allow the policy to pay out a portion, if not all, of the death benefit in the event of a "qualifying" catastrophic injury, is truly a fantastic feature that sets American General’s Accidental Death policy apart from many of its competitors.
AG’s accidental death policy is also one that never expires, and because they offer a wide range of policy limits, American General is sure to have a policy that will meet nearly anyone’s budget.
That being said, this insurance is exactly what it’s called: an accidental death policy. For this reason, and this reason alone, it may not be what you’re looking for.
In reviewing American General's accidental death policy, there is nothing particularly bad about the policy other than the fact that it’s only an accidental death policy, it is not no medical exam life insurance. Which American General is very up front about.
For a consumer considering purchasing an accidental death policy, it is key to understand that these policies will not pay out if the death of the insured is caused by a “non-accidental” cause, such as:
- Heart disease
It usually pays out in the event that the insured's death is caused by an accident, such as:
- Motor vehicle accident
- Slip and fall
- Natural disaster/act of God
- Victim of crime
Now there are a number of exclusions that you will find in the policy as well, but none of them are particularly out of the ordinary as you will discover when you compare American General’s Accidental Death Policy with other accidental death policies on the market today. The main exclusions typically entail drug and alcohol use, jumping out of planes, and intentional acts, such as suicide.
The Ugly: You Have to Know What You’re Buying!
Unlike many of the other accidental death policies out there, that have a ton of exceptions, American General’s accidental death policy actually does cover a lot of causes of death.
Because of this, some people may become confused and think American General’s Accidental Death Policy actually covers “Natural Causes” of death, when in fact, it doesn’t.
This is the part of the American General Accidental Death insurance review that a consumer needs to really focus on. The reason being, this confusion is not something that is unique to American General’s Accidental Death insurance. In fact, American General employee’s actually take great care and pride in explaining exactly what their Accidental Death policy does in fact cover.
The problem lies in that most people really don’t read their insurance policy once they receive it, and as a result, they don’t really know what they are paying for!
At TermLife2Go, we really do love American General’s Accidental Death Policy. We love it because:
- It's a guarantee issued policy--- meaning that as long as you’re between the ages of 18 and 80 you'll qualify for it.
- Approval does not require a medical exam or any health questions.
- You’ll generally be approved over the phone within 24 hours.
- It can be an affordable alternative to a more expensive traditional term or whole life insurance policies.
- It includes the ability to add children to the policy at a very affordable rate.
- It contains what are called “Living Benefits” which will pay out a portion, if not all, of the overall death benefit in the event of a “qualifying” catastrophic injury---the dismemberment portion of the accidental death policy, which covers loss of limb and paralysis.
- The policy does not terminate at age 80 like many other Accidental Death policies do.
- And it’s a great way to add additional supplemental coverage to an existing life insurance policy that is already in place.
(Conditions and terms may change, this article was written on 2/1/2014, please see your American General Accidental Death Policy to confirm your specific benefits)
We just don’t write many of these policies simply because most people don’t want to have their insurance limited to just an accidental cause. After all, “statistically” speaking the people who are at the greatest risk of dying due to an accident are generally those under the age of 40 and as a result, will typically qualify for traditional term or whole life insurance policies that would cover both natural and accidental causes of death at a great rate!
So Who Do We Offer Accidental Policies To?
First and foremost, because of the “living benefits” portion of American General’s Accidental death policy, it’s difficult not to recommend using one of these policies as a way to supplement a traditional term or whole life product. After all, accidents and catastrophic injuries, such as paralysis, do happen, which is why, everyone should at least consider adding an accidental death policy to their insurance portfolio.
When would it make sense?
When reviewing American General's Accidental Death policy, there are cases where this policy would make sense.
There are some conditions that will prevent one from qualifying for traditional term of whole life insurance coverage. In these situations, when there is still a large financial need for insurance such as:
- Taking care of young children.
- Paying off an existing mortgage.
- Replacement of lost income.
- Etc, etc..
An Accidental Death Policy may be the only solution. However in these situations, all other options should be exhausted first!
An accidental death policy “Bridge” is a term we use to refer to when an accidental death policy can be used as a short term “fix”. These are cases where a traditional term or whole life insurance policy may not be an option right away due to cost or some other disqualifying factor that is currently in play. These situations are typically just temporary set backs, and once some time has lapsed, these clients will generally become eligible for traditional term or whole life coverage just like anyone else.
Here are a few examples where this may be the case:
Someone who just recently quit smoking. If this client waits a few months, the rate that they would pay for insurance could potentially decrease by 60% or more. In these situations, it may make sense to place an accidental death policy in force and then just apply for life insurance 6 months to a year from now.
Someone who is currently going through a bankruptcy. Many insurance companies will want to see that a current bankruptcy has been discharged prior to offering coverage (Chapter 11 and 13 bankruptcies that may take years to clear simply require payments to be current and up to date). Again, an accidental death policy could be a good fit here until the client is eligible for more comprehensive coverage.
Cancer Survivors. Depending on the type of cancer that was cured, insurance companies may require a waiting period anywhere from 5-15 years. In these cases, an accidental death policy could be a good fit while a cancer survivor client waits to become eligible for a traditional term or whole life insurance policy.
DUI or Driving Record Issues. While getting insured after a DUI isn’t that difficult, the rate that one may have to pay immediately following a DUI could make an accidental death policy a much more attractive (and affordable) option until clients with DUI's or excessive speeding tickets can qualify for a much lower rates in the future.
Drug and Alcohol Issues. Many insurance companies will require that one is clean and sober for a period of time prior to offering complete coverage. In these cases, it’s important to understand which insurance carrier may be willing to provide coverage and possibly use an accidental death policy during the application process.
Now these of course are just a few examples of when accidental death insurance could be a good fit. In truth though, everyone’s situation is unique, and whether or not an accidental death policy will be a good fit for you, will ultimately be something that you need to decide for yourself.
Unfortunately, unless one dies from an accident, an accidental death insurance policy simply isn't going to be very useful. Therefore if you've found yourself in a situation where you simply cannot qualify for a traditional term or whole life insurance policy, or you simply wish to purchase a smaller 5 to 20 thousand dollar life insurance policy to coverage ones final expenses such as a burial, you may be more interested in buying what is called final expense or burial insurance.
We've taken the liberty to outline who we feel are currently the top 10 best final expense or burial insurance companies in the market today, so that we can further assist you in finding the right coverage for you and your family.