USAA Life Insurance Review (2024) (2024)

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We at the MarketWatch Guides team rated USAA life insurance among the highest of the life insurance companies we reviewed. It’s earned a spot as one of the best life insurance companies because of its benefits targeted to military members and their family members, top-tier financial stability, a low incidence of consumer complaints and policyholder-friendly additional coverage options.

While it does not offer a full spectrum of policies, the company’s term, whole and universal life offerings are designed to meet a variety of situations, contributing to a solid overall score.

*AM Best rating accurate as of July 2023.

Life insurance is essentially a mutual agreement. On one side, you have the policyholder, who commits to making regular premium payments. On the other, there’s the insurance company that promises to pay a death benefit to the selected beneficiaries if the insured person passes away. The premium paid and its associated benefit hinges on factors including your age, gender, overall health and lifestyle choices.

Some whole life insurance policies offer more than just a death benefit. They have a cash value component, almost like a savings account that earns interest. Policyholders can borrow against it if they ever need to.

Term Life Insurance

Term life insurance offers coverage for a predetermined period, commonly spanning 10 to 30 years. When the insured individual dies within the designated period, the insurance company is obligated to distribute a specified sum to the beneficiaries stipulated in the policy. Upon the term’s expiration, the policy becomes null and void.

USAA offers two types of term life insurance policies: level term and essential term.

Level Term:

• Medical exam required
• Must answer health and lifestyle questions
• Available for individuals aged 18 to 70
• Pricing starts at $12 a month, fixed until term end
• Coverage length ranges from 10 to 30 years
• Coverage amount varies from $100,000 to $10 million
• Includes military features

Essential Term:

• No medical exam required
• Requires answers to health and lifestyle questions
• Suitable for those ages 21 to 35
• Pricing begins at $5 a month with an increase upon each annual renewal.
• Coverage lasts from purchase date up to age 39
• Fixed coverage amount of $100,000 until policy expiration at age 39
• Does not include military features

Whole Life Insurance

Whole life insurance is a type of permanent insurance designed to offer lifelong coverage, contingent upon timely premium payments. Additionally, these policies possess a cash value element, distinct from term insurance, allowing policyholders to borrow against a portion of premiums paid.

USAA offers both simplified and underwritten whole life insurance policies with coverage amounts between $20,000 and $10 million. Policies under each methodology come with flexible payment options.

• 20 Pay: You pay for 20 years and then it’s paid in full.
• Pay until age 65: You have no additional payments after the age of 65.
• Pay for life: You’ll alway pay a premium that cannot be increased or canceled as long as the premiums are paid on time.

USAA also offers universal life policies through John Hanco*ck Life Insurance.

A universal life insurance policy offers flexible, permanent coverage with the ability to accumulate cash value. You can adjust your premium payments and potentially skip some premium payments without immediately causing the policy to lapse. This policy offers a guaranteed interest rate of 1%.

For those with pre-existing conditions, guaranteed-acceptance policies are available for individuals ages 45 to 85 (50 to 75 in New York) in all states except Montana, up to $25,000.

Just like universal life, USAA partners with another insurance company, Mutual of Omaha, on its guaranteed-issue policies. Guaranteed-issue life insurance doesn’t require a medical exam or health questions, and it’s even available for those who have been previously declined. Guaranteed-issue life insurance is a common solution for burial insurance which is also called final expense life insurance.

Be sure to consult with a financial advisor or life insurance agent to ensure you compare options to get the most competitive insurance quotes to fit your specific needs.

USAA Life Insurance Riders

Riders allow policyholders to add on and customize their policies to their specific needs. Some riders are added to policies at no cost, while others may require an added premium.

Guaranteed insurability riders allow policyholders to increase their death benefit without re-qualifying for coverage. You don’t have to answer health questions or take a medical exam. USAA offers three free riders:

• Term life event option: Available for level term policies, the rider allows policyholders a one-time option to increase your death benefit after some life event, such as getting married, starting a family or buying a home. The rider expires after 10 years or when you turn 45, whichever happens first.
• Life event option: Similar to the term life event option, this rider is available to holders of a simplified whole life policy. Policyholders get to increase their death benefit by up to six times for a maximum total coverage increase of $1 million. The rider expires when a policyholder turns 45.
• Accelerated death benefit terminal illness rider: With this rider, you can access a portion of your death benefit while you’re still alive when diagnosed with a terminal illness.

The company offers a couple of paid-for riders, too:

• Child rider: Available for term life insurance policies, this rider allows for up to $25,000 of coverage per child for $7.99 a month. Once a child becomes an adult, you can convert the rider to permanent coverage.
• Waiver of premium rider: Policyholders can pay for the ability to skip premium payments if the insured person becomes disabled. The insured person must be between the ages of 15 and 55.

Life insurance premiums are competitively set across the industry. Although each insurer employs its unique approach to determine policy pricing, several considerations are universally acknowledged. Typically, the amount you pay will hinge on these factors:

• Age
• Health and medical history
• Occupation
• Gender
• Lifestyle
• Policy type
• Coverage amount

Here are sample 30-year term life insurance rates* for a 40-year-old, healthy male who is tobacco-free:

• $100,000 in coverage: $21.65 per month
• $250,000 in coverage: $33.32 per month
• $500,000 in coverage: $55.49 per month

*Sample quotes were provided by Quote-bot, a nationally licensed life insurance brokerage. Rates are accurate as of July 2023.

You can get additional life insurance quotes from USAA without entering your personal contact information, such as an email or phone number.

J.D. Power’s 2022 U.S. Individual Life Insurance Study is a widely used benchmark for customer service satisfaction in the insurance industry. While USAA was not rated in this study in 2022, the company scores well in another consumer satisfaction indicator.

The National Association of Insurance Commissioners (NAIC) tracks the volume of complaints insurance companies receive relative to their size and market share. USAA’s NAIC complaint index is lower than average, which means that there are fewer than the expected number of complaints against USAA’s individual life insurance products.

USAA has mixed reviews on consumer tracking sites such as Trustpilot.

“Every time I’ve had to deal with USAA, it’s been a pleasure. They’ve taken my insurance issues, done their due diligence, and gotten everything sorted out with a minimum of stress. They’ve put a calming note on the experiences that necessitated calling them.” —Sam Brown via Trustpilot

“Today I had questions referencing my policy. Spoke with Monica from Indiana and all questions answered with professionalism and explained to my understanding. She was also very personable and most friendly. Best customer experience I’ve had in a long time.” Lora Wolfert via Trustpilot

“Been a member for 37 years. After a string of very poor customer service I am pricing around replacement policies. That’s hard for me to say. As a military retiree USAA has always been almost automatic — cost-effective and they took care of their members. Sorry to see how much that’s changed. If you’re looking for insurance don’t assume USAA is still the best. That’s not necessarily the case. Another great company, even institution, loses its way. Shame.” —Kevin Kennard via Trustpilot

“Customer for over 35 years. Routinely call and on hold for 10 to 20 minutes. Friends have left USAA for poor service and cost. We are also looking at other insurers.” —Ronald via Trustpilot

A USAA life insurance policy may serve your needs well if you’re an active-duty military member. Active members of the military will appreciate the no-cost military perks, such as coverage during wartime and severe injury benefits for injuries sustained in the line of duty.

The company’s insurance coverage also compares favorably for those with no military connection. Many insurers do not offer guaranteed insurability riders at no additional cost.

However, the USAA life insurance company falls short when it comes to long-term, high-dollar-amount, no-medical exam, variable universal life or indexed universal life coverage.

When shopping for life insurance, we recommend gathering quotes from at least three insurers to help ensure that you’re getting a competitive price for the coverage you’re seeking.

Methodology: Our System for Ranking Life Insurance Companies

Our team researches and ranks life insurance companies using an in-depth scoring system that considers the factors most important to consumers like you. Our analysis includes a comprehensive review of each provider we feature based on available coverage, customizability, availability, customer service and company reputation. Here are the factors we take into consideration when rating life insurance providers:

• Brand trust (40%): Life insurance payouts can exceed $100,000 or more, which makes choosing a reputable and trustworthy insurance provider important. To assess brand trust, we use J.D. Power and Associates customer satisfaction surveys, AM Best credit rating scores and the National Association of Insurance Commissioners (NAIC) complaint index. The higher a company scores in each area, the more points it receives.
• Coverage (33%): The more policy options a life insurance company offers, the more opportunities you have to obtain the right coverage for your specific needs. For this reason, we give companies the most points for offering multiple types of life insurance, including various term, permanent and no-exam options.
• Availability and ease of use (19%): Since life insurance coverage options can be complex, we consider the ways a customer can reach a company — and how easy communication is. For this category, we research how many communication channels a company offers for general customer support, claims processing and the application process. Companies earn the most points for offering various ways to interact with an agent, both in-person and online.
• Riders (8%): Companies offering various life insurance riders or endorsem*nts allow policyholders to better customize their coverage. In this category, we determine how many riders a company offers and award the most points to providers with more than 10 options.

We use our rating system to compare and contrast each company against key factors to help us determine the best life insurance companies in the industry. To learn more, read ourfull life insurance methodologyfor reviewing and scoring providers.AM Best Disclaimer