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AA life insurance review 2021

AA also known as Automobile Association has been a part of Acromas Holdings along with Saga since the merger of these two companies in 2007.

The company’s history dates back to 1905 when Automobile Association was created. Its main purpose was to protect drivers from police speed traps by placing various signs and warnings on the road.

AA started providing its insurance services in 1967. However, not so long ago in 1999 association as demutualised and sold to UK company Centrica.

The size of the deal was £1 bn. Later on, “AA Motoring Trust” was created and in 2007 it merged with SAGA.

AA mainly specializes in various motor insurance services such as breakdown cover, car, van, classic car, travel, caravan and other similar insurance products.

However, it also provides not only vehicle related services such as home, pet, private medical or life insurance.

For its life insurance segment, there are not much of services offered to the potential and existing customers.

AA provides level and decreasing life covers, critical illness cover and their over 50s plan which is called 50 plus life insurance.

Calculation of premiums

AA provides information that the company calculates premiums according to some specific factors.

These factors include the age of the person, his gender, medical history, the amount of cover that is chosen by the client, the term of the insurance and its type and whether the person smokes or not.

The premiums can be as low as £5 a month depending the person’s evaluation according to above mentioned factors.

AA level term insurance

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Level term insurance provided by AA will pay out a lump sum of cash if the person dies during the term of the policy.

It is also possible to take out a joint policy. The person chooses the sum assured that he needs and the term of the cover.

AA guarantees that the cover will never be reduced and the premiums will not change during the term of the insurance unless the person wants some changes to its insurance policy and successfully negotiates them with an insurance provider.

There are also some benefits that either are included or can be added to the policy.

First of all, AA includes accidental death benefit which is designed to cover the person from accidental deaths for maximum of 60 days while the policy request is being reviewed, arranged and the person waits to get his insurance contract underwritten.

Moreover, it is possible to add critical illness cover which protects from illnesses in a AA’s specified list. Last benefit that can be added is premium protection option also known as waiver of premiums.

If this benefit is chosen AA will pay the person’s premiums if he is unable to work for more than 6 months because of an illness or injury that is not an intentionally self-inflicted.

The premiums are paid until the person is able to work again or until the end of the insurance policy.

AA decreasing term insurance

AA’s decreasing term insurance is designed to pay out an outstanding balance of mortgage or loan in case the person dies.

It is also possible to take out a joint decreasing insurance.

This way if one of the partners dies, AA will pay out the amount of cover equal to outstanding obligations.

The premiums are guaranteed to stay the same during the term of the policy, however, it must be remembered before taking out this kind of insurance that the sum assured decreases each month in line with an outstanding balance of mortgage or loan.

Moreover, this type of policy includes some benefits.

Firstly, accidental death benefit for up to 60 days is included while the policy application is being processed.

Thus, if the person dies within this time span, AA will make a pay out to his dependents.

Moreover, if the person is waiting for completion of his house purchase, up to three months of a free cover is given to the person.

Furthermore, it is possible to add some extra benefits.

These benefits include critical illness cover and premium protection cover.

The first benefit adds financial protection from some illnesses specified by AA, while the second one gives an opportunity for the premiums to be waived if the person is incapable of working for more than six months because of an illness or an injury.

AA critical illness cover

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It is not possible to take out only a critical illness cover policy from AA. This type of insurance can only be added to a life insurance policy as an additional benefit.

The ones eligible to get critical illness cover from AA are people who satisfy three criteria: the person must be UK resident, his age is between 18 and 54 and the policy is set to last for at least 5 years up to maximum of 40 years.

The covered illnesses include various forms of cancer, heart attacks, multiple sclerosis and other types of illnesses.

It is always very important to check through the policy contract or ask before it is underwritten what is covered and what is not.

Moreover, the premiums will not be guaranteed if this type of benefit is included in the policy.

In other words, there is a possibility that the premiums will be raised or the sum assured will be lowered.

AA 50 plus life insurance

AA also offers a possibility to take out its guaranteed acceptance policy called 50 plus life insurance for people who are between 50 and 80.

It is an attractive option as there is no health questions asked and the medical condition of the person is not checked before underwriting a life insurance policy.

Moreover, premiums will stay the same throughout the term of the insurance if the person does not decide to take out an increasing cover benefit.

However, it is important to remember that a full pay out will be available only after a year has passed since the beginning of the policy.

The exclusion to this limitation is an accidental death. If such thing happens then the dependents will get a full pay out.

Otherwise, only 1.5 times higher sum than the total of paid premiums will be given to the dependents.

Furthermore, it is possible to add two more benefits to this 50 plus plan. The first one is an increasing cover benefit.

If it is chosen, then both the sum assured and the premiums will rise by 5% each year. This way, the value of the sum assured will be protected by inflation.

However, it comes with a cost of premiums increasing each year. The second benefit is a funeral option.

It will not cover all the expenses of the person’s funeral.

Only a small contribution of £250 will be made by AA. This benefit can be added at any time during the term of the policy.