Best Life Insurance Companies

AAA life insurance review and ratings 2023

AAA ranks sixth in Insure.com’s Best Life Insurance Companies rankings. The insurer scores high for policy renewal and costs less than the industry average.

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Our take

AAA Insurance has lower than average rates and almost all its customers say they would renew their policies with the insurer. It ranks sixth overall in the Insure.com Best Life Insurance Companies rankings with a 2.9 star rating out of a possible 5 stars.

AAA is owned by some of the larger groups in the AAA organization, which is best known for its emergency roadside assistance.

When surveyed by Insure.com, 80% of policyholders said they were happy with its customer service and 73% said AAA is trustworthy. 

Below is Insure.com’s review of the company. It’s based on third-party metrics and an in-depth survey of insurance customers. Find the full methodology here, including an explanation of our survey scores.

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AAA Ratings
Overall Rating: 2.9
Ease of service: 4.2
NAIC: 1.39
Customer Satisfaction: 4.0
AM Best Rating: A

Pros and Cons

Pros:
  • Most AAA customers would renew their life insurance policy
  • AAA costs less than the industry average
Cons:
  • The insurer ranked in the middle of the pack for ease of service and policy offerings

How AAA scores on customer satisfaction

Eight out of 10 AAA customers surveyed gave the company high marks for customer satisfaction. The company did better than many companies in this category, but a few scored higher. State Farm led this category among the companies we ranked.

Insurance company Percent of customers that are satisfied
AAA 80%
State Farm 91%
New York Life 82%

How much does AAA cost?

Term life insurance offers coverage for 10-40 years and tends to be the cheapest type of life insurance coverage. Insure.com used premiums collected by CompuLife to evaluate AAA’s term life offerings. 

AAA’s term life insurance rates are on par with most other insurers evaluated in the Insure.com survey. Most insurers provided coverage for under $500 a year for 35-year-old non-smokers purchasing $500,000 in coverage for a 20-year term, and AAA falls in that category with an average annual premium of $473. While it’s not the cheapest insurer, it’s also not the most expensive.

The industry average annual premium is $481. Compared to the annual average premiums of life insurers surveyed by Insure.com, AAA rates are about 2% lower.

Insurance company Average annual premiums
AAA $473
Northwestern Mutual $501
New York Life $465

How AAA scores on ease of service

For ease of service – a metric that looks at how easy it is for customers to access services –  83% of AAA customers gave it a high mark, which put it solidly in the middle of the companies we ranked. State Farm led this category.

Insurance company Percent of respondents that are satisfied
AAA 83%
State Farm 91%
Prudential 75%

How AAA scores on policy offerings

Consumers typically want a company to offer a broad range of policies so that they can find the one that fits their needs. In the survey, 78% of AAA customers said they were satisfied or highly satisfied with AAA’s policy offerings. State Farm came out on top in this category.

Insurance company Percent of respondents satisfied with the company’s policy offerings
AAA 78%
State Farm 89%
AIG 77%

How trustworthy is AAA?

Policyholders should be able to trust their insurer — a life insurance policy protects their family’s financial health, after all. Almost three-quarters of AAA’s customers rank it high in this category. State Farm is the most trusted of the surveyed companies. In many cases, 70% to 80% of an insurers’ customers said they trusted their insurer.

Insurance company Percent of survey respondents who find the company trustworthy
AAA 73%
Northwestern Mutual 79%
State Farm 86%

Do AAA customers plan to renew?

Loyal customers tend to stick with their insurer year after year. 

In all, 98% of AAA customers say they would renew their policy. That’s a high ranking, but it’s worth noting that many other companies scored 100% in this category.

Insurance company Percent of survey respondents who find the company best for renewing a policy
AAA 98%
Mutual of Omaha 100%
Prudential 100%

AAA life product details

  • Term life insurance
  • Whole life insurance
  • Universal life insurance

Other services offered

  • Accident insurance
  • Annuities

States where AAA offers coverage

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Table
States where AAA offers coverage
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virginia
Washington
Washington D.C.
West Virginia
Wisconsin
Wyoming
AL AK AZ AR CA CO CT DC DE FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY NC ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY
Available
Not available

Company background

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AAA Insurance became a part of the American Automobile Association family in 1969. It offers both life insurance products and annuities and is headquartered in Livonia, Michigan.

Today, there are more than 1.5 million active policies in force. It has an AM Best rating of A.

Resources & Methodology

Sources:

AAA Insurance Company. “Life is for less worrying and more living.” Accessed December 2022.

AAA Insurance Company. “Who we are.” Accessed December 2022.

J.D. Power. “Individual Life Insurance Study.” Accessed December 2022.

Methodology

Insure.com in the fall of 2022 surveyed more than 1,500 people with auto, home, life and health insurance (540 with life insurance). The survey was conducted by online market research company Slice MR. Respondents were asked to name their insurer and the editors then selected – based on the number of responses – the top companies for this year’s Best Life Insurance Companies ranking. Insure.com needed 20 or more of a company’s customers to respond to the survey for that insurer to be included in the ranking, although in some categories the editors did consider companies with 18 or 19 responses. 

Respondents were first asked to grade their insurer in the following categories – customer satisfaction, claims satisfaction and policy offerings. The percentage of respondents who said they were satisfied or very satisfied with their insurer is presented in the results.

Survey score calculation: Respondents were then asked to rank their insurer’s top three attributes out of more than a dozen presented – including customer satisfaction and policy offerings. For a number one choice, five points were given; for a second choice, three points; and for a third choice, a single point. The total points for each choice – first, second and third – were then divided by the number of each company’s customers who responded to that survey question to create a percentage. Those percentages are presented in the results as scores. 

Respondents were then asked if they would recommend their insurer to someone else. The percentage who said yes is presented in the results.

They also were given the statement “I trust my insurance company” and asked if they strongly agreed, agreed, disagreed or strongly disagreed with the statement. The percentage of those who said they agreed or strongly agreed is presented in the results.

The editors compiled the survey results and then collected National Association of Insurance Commissioners’ complaint data, which ranks a company by the number of customer complaints it receives, and AM Best data, which measures financial strength.

They also collected insurance rate data from Quadrant Information Services (for auto and home insurance), Compulife (for life insurance) and the public health marketplace (for health insurance).

With the help of Prof. David Marlett, Ph.D., managing director of the Brantley Risk and Insurance Center at Appalachian State University, the editors created a rating system to determine which insurance companies were best in each sector. For life insurers, we used the following weights to calculate the overall score for each company: 

  • AM Best: 25% of total score
  • NAIC: 15% of total score
  • Survey: 60% of total score (10% customer satisfaction, 10% recommended, 10% renewal rate, 10% ease of service, 10% trustworthiness and 10% policy offerings)

To find the industry average annual premium, insure.com weighed the rates from 9 companies: AAA, Farmers, Guardian Life, John Hancock, Lincoln Financial, MassMutual, New York Life, Northwestern Mutual and Transamerica. Rates are based on premiums for 35-year-old males and females who are non-smokers and in good health. Rates are for a 20-year-term policy that provides $500,000 in coverage. 

No insurer in our star ranking received less than 1 star and the highest possible ranking is 5 stars.

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Chris Kissell
Contributing Researcher

 
  

Chris Kissell is a Denver-based writer and editor with work featured on U.S. News & World Report, MSN Money, Fox Business, Forbes, Yahoo Finance, Money Talks News and more.

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