Life insurance is an important financial tool that provides financial security for your loved ones in the event of your passing. Choosing the right life insurance company is crucial to ensure your policy pays out when needed.
In this article, we’ll compare two leading life insurance providers—AIG and Prudential—on key factors like financial strength, customer service, available plans, and costs.
A Brief Comparison Table
| Category | AIG | Prudential |
| Financial Strength Ratings | A (Excellent) from AM Best and S&P | A+ (Superior) from AM Best |
| Products Offered | Term, whole, universal, indexed universal | Term, whole, universal, indexed, variable universal |
| Customer Service | Mixed reviews | Consistently positive reviews |
| Cost of Coverage | Competitive rates, especially for young/healthy | Slight pricing advantage on average |
| Pros | Strong financials, broad product selection, good for expats | Top financial ratings, product diversity, reputation |
| Cons | Mixed reputation, pricier for seniors | Limited to US/Canada market |
An Overview Of AIG
Founded in 1919, AIG is one of the largest insurance companies in the world. They provide property-casualty insurance, life insurance, retirement products, and mortgage insurance to customers in more than 80 countries and jurisdictions.
Some key facts about AIG:
- Operates in over 130 countries with ~49,000 employees worldwide.
- Offers term life, whole life, universal life and index universal life insurance.
- Rated “A” (Excellent) for financial strength by AM Best, S&P and Moody’s.
- Over 30 million life insurance and retirement policy holders worldwide.
An Overview Of Prudential
Prudential Financial traces its roots back to 1875 and is one of the most recognizable life insurance brands. They offer a wide range of insurance and financial products, including life insurance, annuities, retirement plans, mutual funds, and more.
Some key facts about Prudential:
- Operates in over 40 countries with over 45,000 employees.
- Offers term, universal, indexed universal, and variable universal life insurance.
- Rated “A+” (Superior) financial strength rating from AM Best.
- Serves over 20 million life insurance and annuity customers globally.
- Manages over $1 trillion in assets under management.
Now that we’ve provided some background on each company, let’s compare them across several important factors.
Financial Strength
Financial strength ratings evaluate an insurer’s financial health and ability to pay out claims. Both AIG and Prudential receive strong marks from rating agencies:
- AIG – Rated “A” (Excellent) by AM Best and S&P, and “A3” by Moody’s.
- Prudential – Rated “A+” (Superior) by AM Best, “Aa3” by Moody’s, and “AA-” by S&P and Fitch.
While both companies are on solid financial footing, Prudential edges out AIG with slightly higher ratings across the board. Prudential’s larger asset base helps provide confidence they can weather economic downturns.
Life Insurance Products Offered
AIG and Prudential offer all the major types of life insurance:
- Term life – Provides death benefit coverage for a set period of 10-30 years. The most affordable option.
- Whole life – Provides lifelong coverage with level premiums and a cash value savings component.
- Universal life – Flexible permanent life insurance with adjustable coverage and premiums.
- Indexed universal life – Universal policy with returns tied to a market index. Limited upside potential but no downside market risk.
Both providers allow you to customize your policy regarding coverage length, amount, and additional riders (e.g. disability waiver). Prudential offers a bit more product diversity, including variable universal life policies with investment subaccounts.
Also Read: Choose Between Aflac And Colonial Life.
Customer Service Reputation
Strong customer service and claims payment processes are vital when choosing a life insurance provider.
- AIG – Mixed reviews on customer service. Positive feedback on fast application and underwriting. Complaints of long hold times and delays resolving issues.
- Prudential – Consistently earns positive marks for customer service and streamlined underwriting. Quick turnaround on applications and inquiries. Strong reputation for claims payouts.
Several third-party rating sites give Prudential higher ratings for customer satisfaction. But you should check reviews for your specific product and state.
Cost Of Coverage
The cost of life insurance depends on many factors like age, health, lifestyle, coverage amount, and length of policy. On average:
- AIG term life rates start around $30 per month for $500,000 of coverage for a 30-year-old non-smoking male.
- Prudential term policies start around $27/month for the same parameters.
Prudential appears to have a pricing advantage, likely due to their sheer size and economies of scale. But get quotes tailored your situation, as costs can vary significantly.
For permanent life insurance, pricing can be complex given the cash value component. Work with an independent agent to run illustrations and find the most cost-effective option.
Pros And Cons Of AIG Life Insurance
Pros
- Strong financial ratings from AM Best, S&P, and Moody’s
- Broad selection of term, whole, universal, and index universal life policies
- Competitive pricing, especially for healthier individuals
- Good option for expats needing international coverage
Cons
- Mixed reputation for customer service and claims handling
- Not rated as highly by J.D. Power for overall satisfaction
- Pricing less competitive at older ages
Also Read: Is New York Life Better Than Prudential?
Pros And Cons Of Prudential Life Insurance
Pros
- Top financial strength ratings from AM Best, S&P, Moody’s, and Fitch
- Wide range of term, permanent, and variable universal life products
- Positive reputation for customer service and streamlined underwriting
- Low average rates for term and permanent coverage
Cons
- Less competitive pricing for 20-30 year term policies
- Variable universal life expenses can be high
- Primarily services U.S. and North American market
Frequently Asked Questions (FAQ)
AIG offers decent term and permanent life insurance options at competitive rates. They have strong financial ratings but mixed reviews for claims and customer service. AIG policies can provide good value, but shop around for best pricing.
Prudential is regarded as one of the top life insurance companies based on financial strength, customer satisfaction, policies offered, and average cost. Their positive reputation makes them a low-risk choice for life insurance.
Prudential and New York Life consistently top rankings as the best life insurance companies. But policies and prices can vary significantly based on your age, health, and needs. Get quotes from several highly-rated insurers before deciding.
AIG holds an “A” (Excellent) rating for financial strength from AM Best and S&P, indicating a strong ability to pay out claims. But they earn mixed marks for customer satisfaction.Evaluate AIG based on pricing and product fit for your needs.
Also Read: Choose Between AIG And Pacific Life Insurance.
The Bottom Line
When choosing between AIG and Prudential for your life insurance needs, Prudential stands out as the stronger provider based on financial ratings, reputation, and customer satisfaction. But it’s wise to compare quotes and products from both companies, as pricing and offerings can vary.
Work with an independent insurance agent to review your options from highly-rated insurers and find the right policy for you and your budget.