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Originally Published: Sep 22, 2020 Last Updated: Sep 24, 2020 15 min read
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AIG Direct Life Insurance: Pros and Cons

COVID-19 Note: As a result of the pandemic, not all life insurance companies are accepting new policy applications. Some companies are also limiting the types of policies available for sale at this moment. Make sure you shop around to find the best policy for your needs.

As an AIG Direct customer, you’ll be able to take advantage of a large number of life insurance policies plus flexible terms that you won’t find with a lot of other insurance companies. But as one of the largest life insurance companies in the world, AIG has some issues with customer service.

What makes AIG Direct stand out is the variety of its insurance products and the flexibility you’ll have to adapt and craft a policy that fits both your coverage needs and your budget. You can select term lengths and different riders to customize your policy.

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With AIG you’ll find competitive premiums, with advertised rates for a $250,000 term life policy starting at $14 a month. While you can purchase insurance through an authorized agent, by going through AIG Direct you can apply online or by phone directly with the insurer, which could save you up to 55% on your premiums.

While you’ll have a variety of policies to choose from and flexibility to adapt it to your needs, where AIG needs to improve is in customer service. In the 2019 J.D. Power Overall Customer Satisfaction Ranking, AIG ranked 24th out of the 24 companies surveyed, obtaining a rating of “the rest” (think two stars out of five).

AIG Direct Life Insurance Key Facts

Term Life Insurance
Quality of Life Insurance
Whole Life
Guaranteed Issue Whole Life Insurance
Universal Life Insurance
Living benefits
Flexible premiums
Flexible policy terms
Policies that require no medical exam
Return of premium/cash back policies available

AIG Direct Company Information

AIG, AIG Direct’s parent company, traces its roots back to 1919 when it opened its first office in Shanghai, China, under the name American Asiatic Underwriters. Its first U.S. office was established in New York City in 1926 under the name American International Underwriters.

In 1939, AIG moved its headquarters from Shanghai to New York City. After the end of World War II, the company continued its expansion across Europe and Asia, opening offices in Germany and Japan to provide insurance products to the U.S. military.

AIG Direct was established in 1995 in order to broaden the company’s reach and take advantage of online resources to help customers obtain quality life insurance products through a streamlined process.

Today, AIG has expanded to provide personal and business insurance products in over 80 countries and jurisdictions around the world. In the United States, life insurance products are primarily underwritten by one of two divisions - American General Life Insurance Company or United States Life Insurance Company.

AIG Direct Life Insurance Policies

AIG Direct offers term, whole, and universal life insurance policies, with the biggest number of available options being its universal life policies. These policies allow you to not only accumulate cash value throughout the life of the policy but also offer you the flexibility of being able to adjust both the premiums and the death benefits as your needs change throughout your life.

The whole life policies allow you to lock in the premium and the benefit of your policy throughout its term and will provide coverage for as long as you live. The policy could also accumulate cash value, which you can borrow against at a low rate if you need cash at some point in the future. AIG Direct also offers a guaranteed issue whole life insurance policy specifically designed for people aged 50 to 85 that requires no medical exam and offers guaranteed acceptance, with a $25,000 death benefit.

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AIG Direct’s term life policies allow you to choose both the amount of coverage and the length or term of the policy, from 10 up to a maximum of 30 years. Premiums are fixed for the term of the policy and offer an affordable insurance option. Some term life policies can also be converted to a whole life policy if you wish to continue coverage.

Once you’ve decided on the policy that best suits your needs, you can easily apply for and get an instant quote online. An AIG Direct agent can provide assistance if necessary, but once you’ve been accepted you can expect the policy to be underwritten in a few weeks. Your policy will be sent to you via email.

AIG Direct Term Life Insurance

One of the best features of AIG Direct is its term life policies, which offer flexibility not only in the amount of coverage you can get but also in the actual term of the policy, all at an affordable cost.

While standard term life policies usually come in 10, 15, 20, and 30-year terms, with AIG Direct you can actually choose from 18 different term options, which allows you to craft a policy to suit your personal needs. You can not only choose the term of your policy but also the amount of coverage you want, from $100,000 up to $10 million, making this term life policy fully customizable.

Another feature that stands out about AIG’s term life policies is its Quality of Life (also known as Accelerated Death Benefits) riders that you can attach to it. These riders allow you to receive a portion of the life insurance benefits due to a qualifying critical, chronic, or terminal condition, which can help take care of any medical costs you may incur.

AIG Direct Whole Life Insurance

AIG Direct’s Guaranteed Issue Whole Life policy is geared towards seniors between the ages of 50 and 80, and provides up to $25,000 in benefits to help take care of debts or funeral expenses. AIG's policy has fixed premiums that won’t change over time, no required medical exam, and guaranteed acceptance regardless of your medical condition.

Another plus with this policy is that Living Benefits are included at no extra cost. This includes benefits for:

  • Chronic illness - returns all paid premiums and is triggered when the insured can’t perform at least two of the six daily “activities of life” or is diagnosed with severe cognitive impairment like dementia or Alzheimer’s disease. Activities of life are defined as bathing, continence, dressing, eating, toileting, and transferring.
  • Terminal illness - provides 50% of the applicable death benefit at the time of acceleration. Terminal illnesses are illnesses or conditions that a physician certifies that can reasonably expect to result in death within 24 months of the certification.

AIG Direct Life Insurance Application Process

Request a quote either online or by phone by providing some basic information
Speak to an AIG Direct agent. You’ll need to provide information about your medical history and other factors that could affect your final quote
Complete a full application
Take a medical exam (if required by the policy), which you can set up at a time that is convenient for you
Underwriting will begin - this is the process where the insurer will determine your insurance risk and could take a few weeks to complete

Factors That Affect Your Life Insurance Premiums

While it would be nice to be able to get an idea of exactly how much you’ll be paying in premiums before applying for a life insurance policy, it’s impossible because of all the different factors that go into assessing your insurance risk. AIG Direct lists the following as factors that can affect your premiums, although there could be others. You can always ask your insurance agent for more details.

The type, length, and amount of your insurance policy will affect the premium you’re offered. Term life insurance, because it covers a specific period of time and may or may not be paid out, will be the simplest type of policy and have the most economical premiums. Whole life insurance, which has a guaranteed payout, will usually have higher premiums.

Your age will be a very important factor. Naturally, the younger you are, the lower the premium will be, as the insurance company gambles on not having to pay off the policy until many years in the future.

Your health is also a big component that influences your premium. The healthier you are the lower your premiums. If you do have medical conditions, be it physical or mental, you can find life insurance policies - but your premiums will be higher as you represent a higher risk.

Smoking or using tobacco products can also affect your premiums, as it is known that smoking can cause serious health issues such as cancer and lung disease. Some insurance companies will even have separate premium tables for smokers. Expect to pay higher premiums if you’re a smoker.

Believe it or not, your driving record can affect your insurance premium. One or two parking tickets may not make a difference, but several speeding tickets or collisions can raise not only red flags but also your premiums. If you have recent DUI convictions you may not qualify for a life insurance policy at all.

Have any upcoming travel plans? Depending on where you go, you may actually want to wait until you get back from your trip to apply for a life insurance policy, especially if you’re traveling to high risk areas, countries with travel bans, or areas still being strongly affected by COVID-19. You may be charged higher premiums, or your approval might be delayed for a period of time after you get back from your trip.

Your family’s medical history plays a big part too, especially if there is a history of conditions like heart disease and cancer. The healthier your family, the lower your premiums.

Finally, your hobbies can increase your insurance premiums. High risk activities like skydiving, BASE jumping, scuba diving, and flying airplanes, among others, represent a higher risk and, therefore, a higher premium. In some cases, these activities could be exclusions to your policy, meaning that benefits wouldn’t be paid if you were to pass away while engaged in one of these hobbies. If you do practice a high risk sport or activity, make sure you know if it’s excluded or not.

As with any area in life, honesty is the best policy. Always be truthful about your medical conditions, family history, or any other factor that could influence your premium. Failing to provide the correct information or intentionally providing wrong information could result in not getting approved for the policy, increased premiums, or the cancellation of the policy and loss of premiums already paid.

AIG Direct Life Insurance FAQs

What kind of life insurance policies does AIG Direct offer?

AIG Direct offers term life, whole life and universal life insurance policies. If you are unsure of what type of policy best suits your needs, you can speak with a life insurance agent who can help you determine what the best option is.

Do I need to have a medical exam done to apply for a life insurance policy?

In most cases, yes. It is the only way an insurance company can adequately assess your risk. However, some policies, known as guaranteed issue life insurance policies, do not require a medical exam and guarantee acceptance regardless of your health, and are typically issued to those between the ages of 50 and 80.

What is the difference between term and permanent life insurance?

Term life insurance is bought for a specific length of time, or term. Once that term expires, you are no longer covered unless you decide to take out a new policy. Permanent life insurance will provide coverage for as long as you pay your premiums and comes in two types - whole and universal life insurance. Permanent life insurance policies will accumulate cash value which you can use to pay medical bills or other expenses as you grow older.

How much life insurance do I need?

How much life insurance you need will vary. While some agents will recommend multiplying your annual salary 7-10 times, you should also evaluate how much debt you have (things like mortgages, student loans, car loans, etc) and the life events you want to secure for your family (college tuition, weddings, retirement for a spouse, etc.). Be sure to include expected funeral costs, then estimate how much money it will take to cover all these expenses.

Do I need life insurance?

If you have a family that depends on your income to cover any type of expenses (mortgage, college, etc.), getting a life insurance policy should be an important part of your financial planning. A life insurance policy ensures your loved ones will have the resources necessary to cover living expenses in case of an untimely passing. If you are single with no dependents, a life insurance policy may not be necessary.

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AIG Direct Life Insurance: Summary and Key Takeaways

  • Offers a large number of insurance policies, including term, whole, and universal life insurance policies
  • Term life policies that allow you to choose from up to 18 different lengths
  • Guaranteed issue whole life insurance policies that require no medical exams
  • Savings on AIG life insurance policy premiums when you apply through AIG Direct
  • Quotes can easily be obtained online in a matter of minutes
  • Could improve its customer service