American General Life Insurance Company, or AIG, a top-rated carrier, offers indexed universal life insurance (IUL) with no exam required.
Called the Max Accumulator+, AIG’s IUL policy focuses on:
An IUL makes sense for certain applicants, namely, those interested in cash-value accumulation for funding substantial financial needs, like college, major purchases, and retirement.
Think of this review as your go-to guide to determine if this form of coverage from AIG is right for you.
Table Of Contents
With over 100 years of history, AIG’s (American General) beginnings are rooted in China when Cornelius Vander Starr opened an agency in Shanghai in 1919.
By 1939, AIG’s headquarters were moved to New York City.
Their stock became publicly traded in 1969.
After the financial crisis of 2008, AIG received assistance from the U.S. government. By 2012, AIG restructured itself and fully repaid the assistance, plus a profit.
As one of the largest insurers in the world, AIG is a household name.
AIG provides innovative insurance solutions to customers in over 80 countries and jurisdictions throughout the world.– AIG
Today, American General has a strong international presence with offices across the globe, including Japan, Germany, Cuba, and Australia.
Financial Strength Rating: A (A.M. Best)
Interesting fact: In 1974, Muhammad Ali and George Foreman’s Rumble in the Jungle boxing event was broadcasted worldwide via AIG’s transmission coverage.
Max Accumulator+ IUL Review
Indexed universal life insurance is a specific form of whole life insurance, and you will want to understand the essential facts about this type of coverage.
- Flexible premiums and death benefit
- Cash value linked to fixed and indexed accounts
- Permanent protection
- Policy loans and withdrawals available
- Multiple health classifications
AIG’s IUL product is called Max Accumulator+ and focuses on cash accumulation.
Note – AIG does have a second IUL product called, Value+ Protector, which is geared towards guaranteed protection, instead of cash accumulation and growth.
To start, the Max Accumulator+ includes five key features – that are similar to most IUL products – you should be aware of.
- Issue ages: 0 – 50 years (ages 51 – 80 for medical underwriting)
- Face amount: minimum of $50,000
- Medical underwriting: none – no exam required (most IUL policies require a physical)
- Policy length: permanent coverage
- Cash value: cash accumulation via fixed and indexed accounts
How Does AIG IUL Work?
An indexed universal life insurance policy is a tax-advantaged product with a few key components.
The policy’s death benefit, or face value, is permanent and will not expire if your premium payments are made.
There are a couple death benefit options with the Max Accumulator+:
- Level (specified amount, minus partial withdrawals)
- Increasing (equal to specified amount, plus accumulation value, minus partial withdrawals)
Further, the death benefit is adjustable, so long as it is not less than the minimum death benefit amount ($50,000).
Increases to the death benefit may occur at any time, but may be subject to “satisfactory evidence of insurability”.
In addition to the death benefit, an IUL includes a cash-value component.
Different than other universal life insurance products, an IUL’s cash-value is influenced by, but not directly exposed to, stock market performance.
There are two sub-accounts:
The fixed account provides stable consistent growth at a percentage rate determined by the carrier. (AIG’s IUL fixed rate is currently at 2%)
Indexed accounts are influenced by stock performance, like the S&P 500. However, protective measures are in place for the policy owner and the carrier – called floors and caps.
A floor protects the policy owner by guaranteeing a minimum interest rate. For example, AIG’s IUL guaranteed floors are currently 0 – .25%. So, even if the stock market drops, your money invested in the indexed account is safe.
Conversely, the cap protects the life insurance company by declaring a maximum credited interest rate – for example, 10%. AIG offers two cap options:
- High cap
- Core cap
For any given crediting period, if the stock market sees substantial growth, your indexed account will be limited to the cap rate (e.g. 10%).
The cash-value of your IUL policy can be accessed for loans.
Policy owners may choose between the following loan options:
- Standard – a current interest rate of 3%, and is payable in advance at the rate of 2.91%
- Preferred – available after policy year 10, with a maximum amount of the lesser of the loan value or 10% of accumulation value, and interest rate equals the credited rate applied to the loan
- Participating – available whenever there is an amount of cash-value, a current interest rate of 5%, policy values continue to have the potential to earn interest
After policy year one, withdrawals or partial withdrawals or available.
There are a few caveats:
- Death benefit may not be reduced below $50,000
- Partial withdrawals are taken from interim account first, then from fixed interest, and finally from indexed accounts
- Current charge of $25 for each withdrawal
AIG IUL Riders
Riders are contractual provisions to your policy, in addition to the death benefit and cash-value.
The Max Accumulator+ offers a comprehensive selection of riders.
- Income for Life – converts cash-value into a guaranteed income stream
- Select Income – converts portion or all of benefit into a predefined set of annual payments
- Accelerated Access Solution – chronic illness rider with a monthly benefit
- Accidental Death Benefit – an additional benefit paid if death occurs as a result of a qualifying accident
- Children’s Insurance Benefit – extends life insurance protection to insured’s children
- Overloan Protection – guarantees the base policy will not lapse due to an outstanding loan
- Spouse/Other Insured – provides level term insurance to the owner’s spouse
- Terminal Illness Accelerated Benefit – option to accelerate death benefit if diagnosed with a terminal illness (12 mos or less to live)
- Waiver of Monthly Deduction – waives monthly deduction after six months of disability
- Waiver of Specified Premium – waives monthly premiums after total disability of at least six months
Keep in mind – some riders require an additional charge, and adding or deleting riders may have tax consequences.
Who Should Buy An IUL?
AIG’s indexed universal life insurance, or an IUL from any carrier for that matter, is not for everyone.
An IUL tends to make sense for:
- Small business owners
- Those with higher income
- Desire for cash accumulation and tax-protected gains
- Retirement income
- Supplementing 401k, traditional/Roth IRAs, or 529 plan
Compare the goals of Max Accumulator+ with your life insurance and financial needs:
- Growth Strategy – policy is designed to build cash value, especially via the index interest accounts
- Stability Strategy – volatility control measures are in place with a hybrid index that is exclusive to American General Life
- Access to Cash – multiple cash access options for:
- healthcare expenses
- starting a business
- covering college or wedding expenses
- funding vacations
- emergency funds
- Protection – tax-free death benefit for loved ones in either a lump-sum payment or guaranteed income stream with a fixed interest rate
Who Should Not Buy An IUL?
Indexed universal life insurance is not for everyone.
We recommend looking to other life insurance options for the following cirucumstances:
- Limited budget
- Temporary need for coverage (e.g. 20-year term)
- No interest in cash-value utilization
Note – for term life insurance with no required exam, evaluate the top no physical life insurance companies.
AIG IUL underwriting (the process of risk assessment) is a form of true no exam life insurance underwriting.
In other words, for their Max Accumulator+ product, you skip the needles, nurses, and liquid samples. Further, AIG will not order an Attending Physician’s Statement.
Expect the underwriting process to be straightforward and seamless:
- Complete an interview over the phone that will cover your health, lifestyle and financial information
- Electronic databases are checked – prescription database, driving record, and the MIB (Medical Information Bureau)
It is important to note that, despite the fact that medical underwriting is skipped, multiple health classes are available.
What does that mean? Your health and/or lifestyle history may still impact how much you pay in premiums.
For example, your underwriting may be impacted by:
Note – AIG does have a “Table Shave” program in which mild impairments, such as slightly elevated blood pressure, may not have a drastic impact on premium rates.
How To Buy
There are two things to accomplish to prepare for the AIG IUL life insurance application, or any life insurance application for that matter.
1. Needs Analysis
Conduct a needs analysis to determine if an IUL policy is in your best interest. To start, assess:
- Your beneficiary’s financial needs
- Annual income
- Retirement goals
- Desired use for cash-value
- Comfort level with monetary risk
2. Independent Agent
Always work with an independent agent.
Why? Your best chance at securing the ideal policy to fit your needs – at an affordable price – is through an agent who is not held captive to a particular agent.
Fill out your free quote to get started.