USAA has served active military members and their families since 1922. The original name was United States Army Automobile Association. Now, they offer insurance to every branch of the military. In addition to life insurance, they offer home insurance, retirement services, annuities, medical and dental insurance. There are currently more than 13 million people insured by USAA.
We are specifically looking at their long-term care insurance. Long-term care insurance in general has suffered some growing pains, and we wondered how USAA’s version fared.
Similar to many other insurance companies, USAA has stopped offering traditional long-term care insurance as of 2018. If you want to learn more about other options that USAA recommends to its members, you can contact them at the phone number, 1-800-531-1426.
USAA seems to have stopped offering traditional long-term care insurance as of 2018. Policies were issued through John Hancock, Genworth, CNA, or Met Life. The website recommends that you call the issuing company, thus washing their hands off the matter altogether.
USAA does offer a universal life insurance policy with a long term care rider through John Hancock. If you’re looking for life insurance with a provision for long-term care through USAA, this is your only option.
John Hancock used to offer traditional long-term care insurance, but like so many other companies, they pulled out of the market. Many companies gave up on traditional long-term care insurance due to skyrocketing costs and an ever-shrinking pool of customers willing to deal with constant rate hikes.
John Hancock sells life insurance policies through agents, so they are also difficult to get pricing information from. They offer coverages from $50,000 to $65 million dollars, which is one of the highest limits we’ve seen. Since this is a universal life policy, you will earn cash value based on an interest rate.
The advantage of a life insurance policy with a long-term care rider is that if it turns out you don’t need any long-term care your beneficiaries will get a nice tax-free death benefit when you die. This is similar to a hybrid long-term care insurance policy. With traditional long-term care insurance, any money you pay in premiums is lost if you don’t need long-term care.
One unique feature of life insurance from John Hancock is that they encourage healthy habits through various rewards programs. They also have an Aspire program, which offers life insurance for those living with Type 1 or Type 2 Diabetes.
USAA is not accredited by the BBB, although they earn an A-. The BBB lists 1431 complaints in the last three years, and there are 570 mostly one-star reviews.
More interesting is the fact that USAA reached a settlement agreement with the Bureau of Consumer Financial Protection in 2019. The subject of the lawsuit was that USAA violated the Electronic Funds Transfer Act by failing to honor customers stop-payment requests. They also reopened deposit accounts that customers had previously closed without their permission. USAA settled for $12 million.
Reading through the reviews reveals many customers frustrated with a perceived lack of attention to detail and a company bogged down in bureaucracy. They are also featured on a corporate watchdog website called the Ripoff Report for fraudulent insurance practices such as denial of claims and bad faith delays.
Some of these complaints concern insurance other than life insurance but proceed with caution.
Probably more relevant to those seeking any sort of long-term care options from USAA are the reviews for John Hancock because they issue the policy. They get a B from the BBB (although they’re not accredited either) and have received 23 complaints. Three customers left one-star reviews.
John Hancock is 17 th on a list of 24 insurance companies according to J.D. Power’s 2020 Insurance Shopping Study.
USAA boasts that 60% of military members use them for some form of insurance. Their financial strength is rated as an A++ according to A.M. Best. They definitely have the resources they need to pay claims.
If you want to plan for the possibility of long-term care and you’re a member of USAA, going with a universal life insurance policy with a long-term care rider from John Hancock is your only option. It’s not a bad option, but it might be easier to just get your life insurance through John Hancock directly.
Thang TruongThang Truong covers small business insurance and small business success at BravoPolicy. He is a licensed P&C insurance agent. Previously, he held product leadership positions at realtor.com, Capital One, NerdWallet, and Mulberry Technology. He holds a MBA degree from UC Berkeley - Haas School of Business.