I saw one of AIG’s “Thank You America” commercials this weekend, and that’s how I found out that AIG had paid back in full their TARP bail out money. That’s good news for American General Life Insurance Company. I’ve been an agent for American General for over a decade, well before they were acquired by AIG back in 2001.
American General’s independent ratings have declined since AIG’s liquidity crisis 2008 and now have stabilized. 2008 exposed the ratings system to be very flawed, and since the rating system has not been reformed, it is a tenuous means to judge a carrier. From a life insurance agent’s point of view, to recommend a carrier is in part observing a life insurance company’s price and product changes, underwriting practices and rules for term conversion. It’s also telling how much interest they are crediting on current policy holder’s permanent plans.
There is also a distinction between recommending a life product that’s guaranteed, and those that are non guaranteed, that depend on crediting interest to the policy for cash value. A guaranteed no-lapse universal life, G-UL, is very straight forward, as opposed to a performance based product like indexed universal life, IUL, or a traditional UL. Term or return of premium term has a guaranteed level rate for a fixed period of time, but conversion options to a permanent plan without evidence of insurability is another key consideration, especially since so many people run into health problems in the 10, 20 or 30 years after their policy is taken out.
I will take a wait and see approach to American General. They can prove their worth by proportionately crediting of their UL policy holders and expanding conversion options.