AA Life Insurance Review 2025
The AA, also known as the Automobile Association, was formed in 1905.
Furthermore, critical illness cover can be added, protecting against illnesses listed by the AA.
The AA, also known as the Automobile Association, was formed in 1905.
Furthermore, critical illness cover can be added, protecting against illnesses listed by the AA.
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The AA, also known as the Automobile Association, was formed in 1905. It was previously part of Acromas Holdings alongside Saga following a merger in 2007. However, AA and Saga are now separate entities. AA is currently owned by a consortium of investors, including TowerBrook Capital Partners and Warburg Pincus, while Saga is a separate publicly listed company.
The initial purpose of the Automobile Association was to protect drivers from police speed traps by placing signs and warnings on roads.
The AA began offering insurance services in 1967. The association demutualised in 1999 and was sold to the UK company Centrica for £1 billion. Subsequently, the ‘AA Motoring Trust’ was created, and in 2007, it merged with Saga.
The AA primarily specializes in motor insurance services, including breakdown cover, and insurance for cars, vans, classic cars, travel, caravans, and similar products.
However, it also offers services beyond vehicle-related insurance, such as home, pet, private medical, and life insurance.
Within its life insurance segment, the range of services offered to potential and existing customers is somewhat limited.
The AA offers level term and decreasing term life insurance, critical illness cover, and their ‘50 Plus Life Insurance‘ plan for individuals over 50.
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The AA calculates premiums based on several factors.
These factors include age, gender, medical history, the chosen coverage amount, the insurance term and type, and smoking status.
Premiums can be as low as £5 per month, depending on the individual’s evaluation based on these factors.
AA’s level term insurance pays out a lump sum if the insured person dies within the policy term.
Joint policies are also available. Customers choose their desired sum assured and policy term.
The AA guarantees that the coverage and premiums will remain constant throughout the policy term, unless policy changes are requested and successfully negotiated with the provider.
Several benefits are either included or can be added to the policy.
Firstly, the AA includes an accidental death benefit, providing cover for accidental deaths for up to 60 days while the policy application is being reviewed, arranged, and underwritten.
Furthermore, critical illness cover can be added, protecting against illnesses listed by the AA. Lastly, the premium protection option, also known as waiver of premiums, can be added.
If this option is selected, the AA will pay premiums if the policyholder is unable to work for more than 6 months due to illness or injury (excluding self-inflicted injuries).
Premiums are paid until the policyholder can return to work or until the policy term ends.
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AA’s decreasing term insurance is designed to pay off the outstanding balance of a mortgage or loan if the insured person dies.
Joint decreasing term insurance policies are also available.
If one partner dies, the AA will pay out a sum equal to the outstanding debt.
Premiums are guaranteed to remain constant throughout the policy term. However, it’s important to note that the sum assured decreases monthly in line with the outstanding mortgage or loan balance.
This policy type also includes several benefits.
Firstly, an accidental death benefit is included for up to 60 days while the policy application is being processed.
Therefore, if the applicant dies within this period, the AA will provide a payout to their dependents.
Furthermore, if the applicant is awaiting completion of a house purchase, up to three months of free cover is provided.
Additional benefits can also be added.
These include critical illness cover and premium protection cover.
Critical illness cover provides financial protection against specific illnesses defined by the AA, while premium protection allows for premiums to be waived if the policyholder is unable to work for more than six months due to illness or injury.
Critical illness cover cannot be purchased as a standalone policy from the AA; it must be added as a benefit to a life insurance policy.
Eligibility for AA critical illness cover requires meeting three criteria: UK residency, age between 18 and 54, and a policy term of at least 5 years, up to a maximum of 40 years.
Covered illnesses include various cancers, heart attacks, multiple sclerosis, and other conditions.
It is crucial to review the policy contract or inquire before underwriting to understand the specific illnesses covered.
Furthermore, premiums are not guaranteed if critical illness cover is included.
This means premiums may increase, or the sum assured may be reduced.
The AA also offers a guaranteed acceptance policy called ‘50 Plus Life Insurance‘ for individuals aged 50 to 80.
This is an attractive option because no health questions are asked, and medical conditions are not assessed before policy underwriting.
Premiums remain constant throughout the policy term unless an increasing cover benefit is selected.
However, a full payout is only available after the policy has been active for one year.
The exception to this is accidental death, in which case dependents receive a full payout.
Otherwise, dependents will receive 1.5 times the total premiums paid.
Two additional benefits can be added to the 50 Plus plan. The first is an increasing cover benefit.
If selected, both the sum assured and premiums increase by 5% annually, aiming to protect the sum assured’s value against inflation.
However, this results in increasing premiums each year. The second benefit is a funeral option.
It does not cover all funeral expenses.
The AA provides a fixed contribution of £250 towards funeral costs. This benefit can be added at any point during the policy term.
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