Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com.

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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Aflac vs. USAA

The insurance industry has grown by leaps and bounds over the years and is known for providing “responsible” people with various methods for financially protecting themselves against life’s little bumps in the road. Two popular insurance providers that have been providing a little peace of mind to many people for years are AFLAC and USAA.

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AFLAC Business Model

AFLAC was originally founded as American Family Life Insurance Company in 1955 by three brothers in Georgia; it now serves over 50 million people in the U.S. and Japan. How does this Fortune 500 company stay successful in the extremely competitive insurance market?

According to the AFLAC business model, it is about providing excellent customer service and relevant insurance products within the “supplemental health insurance” niche category that it has diligently carved out for itself.

AFLAC provides coverage for unexpected out of pocket expenses relating covered incidents as well as cash pay outs for daily living expenses such as groceries, transportation, utility bills, and mortgage payments while one is out of work due to a covered incident.

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USAA Business Model

A group of U.S. Army personnel, who were considered to be “high risk” customers for automobile insurance, founded the United Services Automobile Association (USAA) in 1922 to meet the auto insurance needs of military personnel. Today, USAA is primarily known as a financial services company that offers insurance products primarily in the Property & Casualty and Life insurance categories.

Types of Insurance Products

AFLAC and USAA provide unique insurance products to meet the needs of its customers. Most of the companies’ products are customizable to give each customer the value they expect from these leaders within the insurance industry.

AFLAC Product Line

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Accident Insurance

AFLAC’s Accident Insurance pays cash directly to its customers when covered accidents occur. Accident Insurance benefits are designed to cover ancillary expenses not insured by regular health insurance policies such as ground and air ambulatory transport, concussions, and broken teeth.

AFLAC even pays for follow up treatments such as physical therapy. Its Accident Insurance pays cash for living expenses when a person is no longer able to work for an extended period of time.

Cancer / Specified Disease Critical Care & Recovery

The unexpected and dreaded diagnosis of cancer or any major illness may be daunting, but AFLAC’s Cancer Critical Care & Recovery Insurance may ease the financial stress of meeting the growing costs of treating and recovering from cancer.

This product offers customers insurance that will cover experimental cancer treatment, out of network specialists, travel expenses to see out of town specialists, and other insurance deductibles. Cash is paid directly to the customer for living expenses such as childcare, housekeeping, mortgage payments, car payments, and utility bills.

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Critical Care & Recovery

Serious health issues such as heart attack, stroke, kidney failure, and third degree burns are covered by AFLAC under its Critical Care & Recovery Insurance. AFLAC pays the cash directly to the customer or the customer’s designee to cover expenses such as bypass surgery, major organ transplants, and paralysis to name only a few.

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Dental Insurance

AFLAC offers a great Dental Insurance product especially designed for those whose regular insurance policy doesn’t have a dental addendum. With AFLAC’s Dental Insurance, customers do not pay yearly out of pocket deductibles, and they may see any dentist they prefer without network constraints.

Life Insurance

AFLAC offers Term Life and Whole Life insurance to its customers along with customizable riders to meet the unique needs of just about anyone. Each life insurance product pays death benefits such as funeral/burial costs, uninsured medical costs incurred prior to death, and payment of any outstanding bills. Each product covers future income replacement, retirement, and education expenses for family members.

Term Life insurance pays the benefit over a predetermined term of 20 to 30 years; the benefit expires at the end of the term. Whole Life insurance doubles as an insurance policy that pays death benefits and an investment tool. The investment element of the Whole Life insurance allows customers to collect payments or borrow against the policy; the policy remains active as long as the premiums are paid.

Other insurance products covered by AFLAC are Hospital Confinement Indemnity, Sickness Indemnity, Intensive Care, Juvenile Life, Lump Sum Cancer, Lump Sum Critical Illness, Vision, and Short Term Disability. AFLAC’s mission is to continuously grow its product line in response to customer needs.

USAA Product Line

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Home & Property Insurance

USAA provides Home Owner’s Insurance that protects valuable assets from fire, theft, vandalism, and some weather related damage. Depending on the extent of the home’s damage, USAA offers 100% replacement costs at current construction rates and 75% of the value of the home’s personal property content.

USAA’s Renter’s Insurance covers damage to personal property due to theft, fire, flood, and some moving losses; the cost of coverage starts at only $10/month for $2500.00 of personal property coverage.

Life Insurance

USAA offers 5 different types of life insurance to include Level Term, Military Term, Universal Life, Whole Life, and a Combination insurance policy. The Level Term and Military Term policies pay death benefits akin to the Term Life insurance policy offered by AFLAC and other leaders in the industry; the Military Term policy provides an additional $25,000 severe injury benefit.

The Universal, Whole, and Combination Life insurance policies provide similar coverage to the Whole Life insurance policy provided by AFLAC; the differences among these insurance policies relate to payment and term flexibility.

Automobile Insurance

USAA still offers the product that got the company off to a good start in 1922. It offers a variety of vehicle coverage based upon the need and budget of the customer. USAA also offers good student and safe driver discounts as well as Accident Forgiveness options much like the top auto insurers in the industry. It offers its customary perks to military; for example, cars garaged on base receive up to a 15% discount on premiums.

USAA has traditionally maintained a presence in the Property & Casualty Insurance segment and is doing very well in the Life Insurance segment. It has expanded its product line into specialty property insurance, special event insurance, annuities, and business insurance which allows it to leverage its expertise in financial services.

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AFLAC and USAA Likely Competitors

While AFLAC and USAA currently serve different market categories within the insurance industry, their growth strategy may force them to compete more directly in the future. Both companies are beginning to offer products outside of their traditional insurance market categories.

AFLAC offers retirement benefit products through its Wingspan Service and Solutions division. USAA offers health insurance, long term care insurance, and Medicare solutions to a certain degree providing AFLAC with a little competition in its niche “supplemental health insurance” category.

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