Life insurance death benefit proceeds are not subject to income taxation. If a settlement option other than the lump sum option is selected, then the interest earned is taxable income. Life insurance proceeds may be subject to estate and inheritance taxes if the insured person is also the owner. For more information on estate and inheritance taxes, consult an estate-planning specialist.
The following benefit is automatically included on AAA Life Insurance Company's term life insurance products at no additional cost:
Conversion Benefit - Allows the owner of a term life insurance policy to exchange (or convert) the policy to a permanent life insurance plan without evidence of insurability. The conversion period ends at the earlier of a) 80% of the term period, or b) age 65.
These benefits are optional and have a separate cost associated with them:
Children's Insurance Option - Provides term life insurance coverage for each child of the insured's family.
Waiver of Premium Option - Has the insurance company make your life insurance premium payments if you become disabled.
An Additional Insured Term Rider - Allows a second person to be covered on the same policy while saving on the fee for a second policy ($60).
You do not need to be a Member to buy any of our individual life insurance products with AAA Life Insurance Company. However, Membership is required to purchase our group term life and travel accident insurance.
If your spouse contributes to your family's income, then life insurance protection is needed to replace his or her income should he or she die. If your spouse does not have an income, then life insurance protection is needed to cover final expenses and replace his or her contribution to the family.
Our life insurance needs calculator can help you estimate the amount of insurance your spouse needs.
AAA Life Insurance Company offers a variety of quality insurance and retirement savings options designed to fit every need and budget. All of our individual life insurance and annuity products are available to AAA Members and non-Members alike.
The type of life insurance best for you depends on your particular needs. Term life insurance is appropriate and more cost-effective for temporary needs lasting up to 30 years. Permanent life insurance is better for permanent needs longer than 30 years. Given your particular situation, you may require a combination of term and permanent life insurance.
Level vs. Yearly Renewable Term
If you decide to go with Term life insurance, you will need to choose between Level Term and Yearly Renewable Term. The advantage of level term life insurance is that the premiums remain level over a guaranteed number of years. Yearly renewable term life insurance has a lower first year premium but the premium increases each year. Yearly renewable term life insurance is only cost-effective in the first few years, after which it becomes more expensive because the premiums increase each year. You should select a guaranteed term period to match the duration of your term life insurance need. If your needs vary in duration, one cost-effective solution is to purchase multiple policies each with a different term period.
Learn more and get a no-obligation quote, or call one of our AAA Insurance representatives at (888) 689-2722.