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Aetna vs. USAA

Aetna vs. USAAWhen comparing life insurance companies as possible insurance providers, it’s very possible a consumer will come across two powerhouses in the industry, Aetna and USAA. Both have been well-established for decades in both quality life insurance and other financial protection businesses as well. However, what delineates one company from the other is both the marketing approach as well as the ratings on performance.

Aetna

Known as one of the corporate leaders in the insurance industry on a U.S. nationwide basis, Aetna has been in business for 154 years providing insurance products to clients big and small. Mainly known for its offerings in the health care insurance industry, Aetna also operates a life insurance division which has been in operation almost as long as the general company.

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Company Background

Headquartered in Hartford, Connecticut, the company boasts 34,000 employees and 16.6 million members with most of the enrolled in health insurance side rather than life insurance policies.

Company Products

Aetna’s insurance operations and sales are licensed to work in all 50 states of the U.S., and the company offers life insurance products in five different product categories. These include:

 

The company even offers a plan for highly risk occupations known as the AD&D ultra. This package addresses dismemberment and accidental death issues specifically.

Performance and Ratings

The company prides itself on a customer service, especially when rated by external agencies. Aetna won the title of Best Business in 2004 from the American Business Awards for companies with 2,500 or more employees. To continue this award-winning approach, Aetna commits itself regularly to individual customer attention and response, placing importance on individual service over bulk production. However, Aetna has not realized any notable awards recently.

In terms of independent performance ratings, Aetna’s life insurance operations have not score as well as other competitors. The results are as follows:

  • A.M. BEST – A
  • Fitch – A+
  • Moody’s – A1
  • Standard & Poor’s – A

Summary

Given the size of the company and employee base, Aetna is a traditional large scale corporation. In this respect, the company can leverage considerable assets to compete. Very often the company wins group insurance plans as result of its operational reach and ability to price competitively due to economies of scale.

USAA

As a life insurance company, USAA is not as old as some of its competition, but the company has definitely made up for that deficit with performance. A unique aspect of USAA as an insurance company in general is that it the company intentionally limits its market. USAA only offers services and products to active and retired service members and their family relatives. By extension, the service can extend access to relatives’ spouses and children, but somewhere in the mix there needed to be a U.S. military service member enrolled with company.

Company Background

Established in the early 1960s, USAA Life Insurance has grown over the last almost 50 years to now holding a position of the 23rd largest life insurance company today. Sitting on $19.3 billion in net assets, the company can easily address member life insurance coverage without concerns of solvency.

The life insurance side of USAA is actually operated as two separate branches of the main company. There is USAA Life Insurance Company and then there is USAA Life Insurance Company of New York. Both operate in tandem offering their coverage products.

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Company Products

USAA provides life insurance as well as products for automobile insurance, health insurance, long-term care, Medicare coverage, property and homeowner’s insurance, and even banking and investment services.

Within the life insurance realm, USAA provides members five different life insurance categories. These include:

  • Term life
  • Survivorship life
  • Permanent life
  • Long-term care life
  • Annuities

A unique aspect of the life insurance program comes with the USAA survivor relations team. Rather than wait for the member’s spouse to make contact, USAA sends out a company team to help a member’s family deal with a loss or a terminal illness status. This approach provides financial planning and guidance on steps families need to take next with the loss of a covered member.

Performance and Ratings

Because of its dedication to U.S. military members and their families, the company is highly committed to customer service and response. This in turn has won USAA significant customer loyalty as well as return business, even when other competitors may be offering cheaper prices for the same products.

In terms of performance and financial strength, USAA sits almost in the middle of the top 100 companies in the Fortune 500 rankings. Operating without any assistance from the federal government during the 2008 Recession, USAA sits today with almost $20 billion in operational assets and an enviable performance scoring as follows:

  • A.M Best – A++
  • Moody’s – Aa1
  • Standard & Poor’s – AA+

Additionally, USAA was ranked within Ward’s 50 for its 18th annual time, continuing to be included in the 50 top-ranked insurance companies nationwide.

Summary

Given the above information, USAA stands out as the stronger company to work with when it comes to insurance products and services. While Aetna has obviously been operating longer and with bigger size, USAA has consistently delivered a better service to its members as reflects by its continued growth as well as industry scoring.

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