Life insurance can provide financial security for your loved ones when you pass away. Choosing the right life insurance company is crucial to ensure your policy pays out as expected. Two of the biggest life insurance providers in the U.S. are AIG and New York Life. But which one is better for your needs?
Here’s an in-depth look at how AIG and New York Life compare on important factors like financial strength, customer satisfaction, products offered, and more.
A Brief Comparison Table
| Category | AIG | New York Life |
| Financial Strength Ratings | A+, A2, A+ (Very Strong) | A++, Aaa, AA+ (Superior) |
| Life Insurance Products | Broad selection of term and universal life | Extensive whole, indexed, and variable life options |
| Term Life Rates | Competitive | Competitive |
| Permanent Life Rates | Good | Even more competitive |
| Underwriting | Full medical underwriting | Niche programs for health conditions |
| Customer Service Reviews | 3 out of 5 stars | 2.5 out of 5 stars |
| Online Experience | AIG Direct for instant quotes | Slower process with agent |
| Policy Add-ons | Good selection | Focus on health discounts |
| Claims Reputation | Some complaints on claims denial | Higher payout satisfaction |
Company Overview
AIG
AIG stands for American International Group. This multinational finance and insurance corporation has operations in over 80 countries and jurisdictions. AIG is currently the largest commercial insurer in the U.S. and has over 88 million customers worldwide.
Some key facts about AIG:
- Founded in 1919, over 100 years of experience
- Provides property/casualty insurance, life insurance, retirement products, mortgage insurance and more
- Generated $52 billion in total revenue in 2021
- Has paid out over $50 billion in claims in the past 5 years
- Rated A+ (Superior) financial strength by A.M. Best
New York Life
New York Life Insurance Company is the third largest life insurer in the U.S. and largest mutual life insurance company. It is also one of the oldest life insurers, dating back to 1845.
Here are some quick facts on New York Life:
- Operates as a mutual company, meaning it is owned by policyholders
- Has the highest financial strength ratings currently awarded to any life insurer
- Has paid out $18.1 billion in death benefits and $12.2 billion in dividends in 2020
- Holds over $628 billion in assets under management (as of 2020)
- Is among the Fortune 100 list of largest U.S. companies by revenue
So, both AIG and New York Life have strong financials and a long history in the insurance industry. But how do they compare specifically for life insurance?
Life Insurance Products Offered
AIG and New York Life both offer all the main types of life insurance:
Term life – Provides temporary death benefit coverage for 10 to 30 years.
Whole life – Offers lifelong coverage with level premiums and cash value accumulation.
Universal life – Flexible permanent coverage with adjustable death benefits and premiums.
Variable life – Permanent coverage with death benefit and cash value linked to underlying investments.
Indexed universal life – Universal life policy with returns linked to a market index like the S&P 500.
Some key differences:
- AIG has a wider variety of term life options including 10, 15, 20, 25 and 30 year terms.
- New York Life offers almost double the variety of whole life policies.
- AIG provides more flexibility on universal life, with options like guaranteed no-lapse universal life.
- New York Life’s indexed life policies can earn interest based on multiple index options.
Both also offer add-ons and riders like:
- Accidental death coverage
- Disability waivers
- Chronic and terminal illness riders
- Children’s life insurance
So, in terms of products, both providers have extensive offerings. AIG may appeal more if you want maximum flexibility on term and universal life. But New York Life edges ahead for whole life options and indexed universal life.
Also Read: Comparison Between Fidelis Care And Excellus BCBS.
Policy Pricing And Underwriting
On pricing, AIG and New York Life also have similar term life rates for healthy individuals. Here are some sample monthly rates for a $500,000 policy:
| Term Length | AIG | New York Life |
| 10 years | $30 | $28 |
| 20 years | $43 | $40 |
| 30 years | $90 | $89 |
However, New York Life appears more competitive for permanent life insurance pricing based on policy illustrations.
Both insurers utilize full medical underwriting. This means your current health, medical history, and lifestyle will impact qualification and pricing.
New York Life may have a slight edge for underwriting applicants with health conditions. They have the expertise and niche programs to potentially offer coverage where other insurers would decline.
Financial Strength And Claims-Paying Ability
Financial strength is a top priority when choosing a life insurance company. You want to be certain your provider will have the financial resources to pay future claims.
AIG holds very strong A.M. Best, Moody’s and Standard & Poor’s ratings:
- A.M. Best: A+ (Superior)
- Moody’s: A2 (Good)
- Standard & Poor’s: A+ (Strong)
However, New York Life comes out ahead with even higher ratings across the board:
- A.M. Best: A++ (Superior)
- Moody’s: Aaa (Exceptional)
- Standard & Poor’s: AA+ (Very Strong)
These ratings reflect each company’s financial health and ability to meet their obligations to policyholders. NYL’s exceptionally high ratings give it an advantage in terms of long-term stability.
Customer Satisfaction And Reviews
Here’s a look at how AIG and NYL measure up on customer service experience:
- AIG: 3 out of 5 stars average from over 3,500 reviews on ConsumerAffairs
- New York Life: 2.5 out of 5 stars average from over 200 reviews on ConsumerAffairs
Clearly, there are some mix reviews on both companies. Areas of satisfaction include good value for the cost, efficient underwriting, strong customer service and fast payouts.
Top complaints involve denial of claims, expensive policy fees, and poor communication. AIG seems to have a higher volume of poor reviews regarding claims handling.
Based on the latest J.D. Power life insurance customer satisfaction survey, NYL scored higher:
- New York Life ranked #5 out of 24 companies
- AIG ranked #8 out of 24 companies
While not leading the industry, New York Life appears to edge out AIG slightly on customer satisfaction based on online reviews and J.D. Power ratings.
Additional Benefits And Features
A few other things to consider:
- Both AIG and New York Life have excellent financial planning resources to help you determine adequate coverage. AIG offers a useful life insurance calculator.
- NYL’s whole life policies offer guaranteed cash value growth and competitive dividends that can supplement retirement income later.
- AIG allows applicants to get instant rates online without speaking to an agent first. But this makes it harder to customize coverage.
- New York Life has a focus on healthy living discounts, with lower premiums for meeting health goals each year.
- AIG Direct is solely an online life insurance platform, while New York Life utilizes both agents and online.
Also Read: Comparison Between PHP Agency And Primerica.
Frequently Asked Questions (FAQ)
Yes, AIG is one of the largest and most established life insurance providers in the United States. They have strong financial strength ratings and a long history dating back over 100 years. AIG offers competitive pricing and policy options. They are a reputable option for term, universal, and other types of life insurance.
AIG Direct is a legitimate life insurance company, as it is backed by American International Group (AIG). AIG Direct provides an easy online platform to apply for coverage and offers term life policies with affordable rates. They have positive reviews on paying out claims. However, some customers have complained about lack of agent support when purchasing or filing a claim.
New York Life is considered one of the best and most reputable insurance companies in the nation. They are the largest mutual life insurance company with over $628 billion in assets. New York Life maintains the highest financial strength ratings currently awarded. They provide all types of life insurance with favorable policy features. NYL also has strong customer service and a lengthy history dating to 1845.
AIG does not disclose their exact life insurance payout percentage. However, data from the insurance ratings firms shows AIG consistently maintains a very high claims-paying ability. Insurance companies aim for a target payout rate around 95% on average. Given their financial strength and policyholder surplus, AIG likely meets or exceeds a 95% target payout rate on life insurance death benefit claims.
Also Read: Comparison Between New York Life And Transamerica.
The Verdict
In summary, New York Life Vs. AIG offers a close comparison:
New York Life pros:
- Highest financial strength ratings
- Strong permanent life options and rates
- Competitive customer satisfaction
- Focus on healthy living discounts
AIG pros:
- Very large company with long history
- Great selection of term and universal policies
- Higher customer ratings on claims handling
- Convenient instant quoting online
For whole, indexed or variable life insurance, New York Life may be the better pick. Their specialty in this area provides strong policy guarantees and features.
But AIG is also solid choice if you want an easy term or universal life buying experience. They make it simple and quick to compare and buy life insurance online.
Ultimately, choosing between these two industry leaders comes down to matching your priorities. Both AIG and New York Life pay claims reliably and have financial stability.
Think about the coverage flexibility you want, cost factors, and whether you prefer agent or online service. Then you can determine if AIG or New York Life better fits your life insurance needs.