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Life Insurance 101

Learn the ins-and-outs of life insurance and how it works.

New to life insurance and finding it a little confusing? You’re not alone. Life insurance can seem complicated, with numerous choices and factors to consider. As your partner throughout the process, AAA Life is here to help make it easier.

Life Insurance 101

Learn the ins-and-outs of life insurance and how it works.

New to life insurance and finding it a little confusing? You’re not alone. Life insurance can seem complicated, with numerous choices and factors to consider. As your partner throughout the process, AAA Life is here to help make it easier.

When and why do you need life insurance?

We’ll help you find the answers, no matter where you are in life – watch to learn more. Then, get started by exploring which life insurance option is best for you.

Video Transcript →

Get Started

We understand that life insurance can seem complicated, and we want to help make it easier. Here, you’ll find answers to our most frequently asked questions.

What Is Life Insurance and How Does It Work?

What is life insurance?

Life insurance is a contract between you and the insurance company where you pay a rate to the insurance company who then promises to pay an agreed-upon amount to the person (beneficiary or beneficiaries) of your choosing should you pass away. It is there to give you added peace of mind and help protect the people most important to you.

How does life insurance work?

After purchasing a policy that covers you and your family’s needs, you will make a premium payment throughout your life or for a term length. If you pass away, your beneficiary will file a claim with your insurance company. Once all of the information is verified, your policy’s death benefit will be paid out to the beneficiary.

Why should I have it?

Life insurance is a great way to help protect those who matter most to you. Should you pass away unexpectedly, your family may not be able to pay for things like funeral costs, medical bills, mortgage payments, or existing debts. With life insurance, you can help ease financial burdens for those you love.

How Much Life Insurance Do I Need?

How much life insurance is right for me?

Deciding how much life insurance coverage you need starts with one simple question: What would life be like financially for those you care about if you were to pass away?

While it may be difficult to think about the answer to this question, it’s important to make a list of all of your needs and bills – the ones you have today and the ones you will have down the road. With too little coverage, your family might not receive all the financial protection you would like them to have.

What next?

Give our Needs Calculator a try to get a better picture of how much life insurance coverage would be ideal for you and your family.

CALCULATE YOUR NEEDS>

What kind of life insurance do I need?

What is term life insurance?

Term coverage can be a great way to help cover big expenses—like a mortgage or college tuition. This coverage is designed to last a specific period of time, or “term” —usually the years when you need coverage most.

LEARN MORE ABOUT TERM LIFE INSURANCE>

What is whole life insurance?

Whole life is designed to last a lifetime with premiums that never change. Your policy can also accumulate cash value that you can borrow against.

LEARN MORE ABOUT WHOLE LIFE INSURANCE>

What is universal life insurance?

Universal life insurance is highly customizable, and can provide a lifetime of coverage with flexible premiums and benefits to help meet your specific needs. Your policy can build cash value to help pay for expenses during retirement and more.

LEARN MORE ABOUT UNIVERSAL LIFE INSURANCE>

When Should I Get Coverage?

What do you need to cover now?

A life insurance policy could help cover your family’s day-to-day activities and living costs, as well as any debts — like your student loans — that you don’t want to pass on to your parents or your spouse.

What might you want to cover later?

You have big plans, and not only does a life insurance policy cover you now, it can help you plan for the future while you’re healthy, which often keeps premium prices down. So you can lock in your best rates ahead of when your coverage needs increase with the addition of children, new business ventures, and more.

What next?

You should probably get a life insurance policy today. You can learn about how to apply, get your personal quote, or let us answer any questions you may have.
 

Get a Quote for Term Life Insurance

Get a quote for our term life insurance products—straight from your device. It only takes a few minutes.

Get a Quote for Term Life Insurance

Get a quote for our term life insurance products—straight from your device. It only takes a few minutes.

Term life insurance starting near
$8/mo.*

Term life insurance starting near
$8/mo.*

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Are you a AAA member?

You don’t need to be a AAA member to apply for life insurance. However, members of AAA do receive some perks – learn more about joining AAA.

Choose a Term Life product:

ExpressTerm

  •   $25,000 to $500,000 in coverage
  •   10, 15, 20, or 30-year term
  •   Buy online

Traditional Term

  •   $100,000 to $5,000,000 in coverage
  •   10, 15, 20, 25, or 30-year term
  •   Buy with an agent
Are you replacing an existing policy?
When was the last time you used any type of nicotine product?

Nicotine products include any of the following: cigarettes, cigars, electronic cigarettes, chewing tobacco, nicotine gum, nicotine patches, pipes, or hookah.

Overall Health Guidelines for ExpressTerm

While it is not possible to know your rate class with 100% certainty until your case is evaluated by the ExpressApprove automated underwriting engine, the following is provided to give you some general guidance as to what you might expect.

If you qualify for a different rate than the one you select, don't worry - we will let you know and explain your options.

Fair

If you don’t qualify for the other rates due to certain other medical conditions you may qualify for this rate.

 
 
 
 

Good

You may qualify for the “Good” rate if you are in generally good health and haven’t used nicotine at all for at least the past 12 months, and

No history of uncontrolled high blood pressure or it is controlled with medication

No personal history of heart disease or cancer (other than skin cancer)

Never had complications due to diabetes

No alcohol or drug abuse

No felony convictions

Excellent

You may qualify for the best or “Excellent” rate if you are in generally good health and haven’t used nicotine at all for at least the past 36 months, and

No history of high blood pressure

No personal history of heart disease or cancer (other than skin cancer)

Never diagnosed or treated for diabetes or elevated blood sugar

No alcohol or drug abuse

No felony convictions

Overall Health Guidelines for Traditional Term

This chart outlines some of the key criteria used to evaluate your health condition status. While we cannot fully determine your rate class until your policy has been underwritten, the information below will provide you with a general idea.

Fair

Nicotine/Tobacco

No nicotine or tobacco use in the past:

13-35 months

Blood Pressure

Blood pressure not exceeding:

150/95 for ages 18-69

155/90 for ages 70+

History of Hypertension:

Well controlled with 3 or fewer medications

Cholesterol

Cholesterol between:

140 to 325

Cholesterol/HDL ratio not exceeding:

7.0 for ages 18-69

8.0 for ages 70+

If applicable, elevated cholesterol is:

Well Controlled with treatment

Other Health Conditions

History of heart disease:

No history

History of diabetes:

No history

History of Cancer:

No history

History of Drug or Alcohol Abuse:

None for 6+ years

Family history of heart disease and/or cancer:

2 parents/siblings died from cancer or heart disease prior to age 60

Legal History

Moving violations while driving:

4 or less in last 3 years

Driving under the influence (DUI) convictions:

None in the last 3 years

Good

Nicotine/Tobacco

No nicotine or tobacco use in the past:

36-59 months

Blood Pressure

Blood Pressure not exceeding:

145/90 for ages 18-69

145/90 for ages 70+

History of Hypertension:

Well controlled with 2 or fewer medications

Cholesterol

Cholesterol between:

140 to 325

Cholesterol/HDL ratio not exceeding:

5.5

 

If applicable, elevated cholesterol is:

Well Controlled with treatment

Other Health Conditions

History of heart disease:

No history

History of diabetes:

No history

History of Cancer:

No history

History of Drug or Alcohol Abuse:

None for 10+ years

Family history of heart disease and/or cancer:

No family history of death from heart disease or cancer prior to age 60

Legal History

Moving violations while driving:

3 or less in last 3 years

Driving under the influence (DUI) convictions:

None in the last 5 years

Excellent

Nicotine/Tobacco

No nicotine or tobacco use in the past:

60+ months

Blood Pressure

Blood Pressure not exceeding:

135/85 for ages 18-69

140/85 for ages 70+

History of Hypertension:

Well controlled with 1 medication only

Cholesterol

Cholesterol between:

140 to 325

Cholesterol/HDL ratio not exceeding:

4.5

 

If applicable, elevated cholesterol is:

Well controlled with treatment

Other Health Conditions

History of heart disease:

No history

History of diabetes:

No history

History of Cancer:

No history

History of Drug or Alcohol Abuse:

Never

Family history of heart disease and/or cancer:

No family history or diagnosis of heart disease or cancer prior to age 60

Legal History

Moving violations while driving:

2 or less in last 3 years

Driving under the influence (DUI) convictions:

None in the last 5 years

Fair

Nicotine/Tobacco

No nicotine or tobacco use in the past:

Used last 12 Months

Blood Pressure

Blood pressure not exceeding:

150/95 for ages 18-69

155/90 for ages 70+

History of Hypertension:

Well controlled with 3 or fewer medications

Cholesterol

Cholesterol between:

140 to 325

Cholesterol/HDL ratio not exceeding:

7.0 for ages 18-69

8.0 for ages 70+

If applicable, elevated cholesterol is:

Well Controlled with treatment

Other Health Conditions

History of heart disease:

No history

History of diabetes:

No history

History of Cancer:

No history

History of Drug or Alcohol Abuse:

None for 6+ years

Family history of heart disease and/or cancer:

2 parents/siblings died from cancer or heart disease prior to age 60

Legal History

Moving violations while driving:

4 or less in last 3 years

Driving under the influence (DUI) convictions:

None in the last 3 years

Good

Nicotine/Tobacco

No nicotine or tobacco use in the past:

Used last 12 Months

Blood Pressure

Blood Pressure not exceeding:

145/90 for ages 18-69

145/90 for ages 70+

History of Hypertension:

Well controlled with 2 or fewer medications

Cholesterol

Cholesterol between:

140 to 325

Cholesterol/HDL ratio not exceeding:

5.5

 

If applicable, elevated cholesterol is:

Well Controlled with treatment

Other Health Conditions

History of heart disease:

No history

History of diabetes:

No history

History of Cancer:

No history

History of Drug or Alcohol Abuse:

None for 10+ years

Family history of heart disease and/or cancer:

No family history or diagnosis of heart disease or cancer prior to age 60

Legal History

Moving violations while driving:

3 or less in last 3 years

Driving under the influence (DUI) convictions:

None in the last 5 years

Excellent

Nicotine/Tobacco

No nicotine or tobacco use in the past:

Used last 12 Months

Blood Pressure

Blood Pressure not exceeding:

135/85 for ages 18-69

140/85 for ages 70+

History of Hypertension:

Well controlled with 1 medication only

Cholesterol

Cholesterol between:

140 to 325

Cholesterol/HDL ratio not exceeding:

4.5

 

If applicable, elevated cholesterol is:

Well controlled with treatment

Other Health Conditions

History of heart disease:

No history

History of diabetes:

No history

History of Cancer:

No history

History of Drug or Alcohol Abuse:

Never

Family history of heart disease and/or cancer:

No family history or diagnosis of heart disease or cancer prior to age 60

Legal History

Moving violations while driving:

2 or less in last 3 years

Driving under the influence (DUI) convictions:

None in the last 5 years

Why AAA Life?

Helping protect financial futures is our business—and we take it seriously. We provide a range of quality products and outstanding customer service.

We’re dedicated to making the life insurance experience as easy as possible.

Learn more

ExpressTerm

  • Term life insurance with your convenience at its core
  • Apply online in as little as 10 minutes
  • Up to 30 years and $500,000 in coverage

Traditional Term

  • Affordable, fully underwritten coverage that’s customized for you
  • Get personal assistance from an experienced agent
  • Up to 30 years and $5,000,000+ in coverage

Learn & Plan

Getting Started

Life insurance made simple! Learn how to shop for the right policy and what to consider when you purchase.