American General Insurance Company Review
American General is one of the insurance companies owned by the American International Group (AIG). AIG nearly collapsed in 2008 after it became unable to meet its financial obligations. The only thing that prevented the collapse was an $85 billion bailout from the federal government. Some critics alleged the company's management team caused the collapse by making questionable financial deals called credit swaps. American General's role in these events is unclear but the company's financial ratings are currently strong.
The relationship between American General and another insurer owned by AIG: SunAmerica is also unclear. SunAmerica seems to have stopped issuing policies while American General is still issuing life insurance and annuity policies. The Wall Street Journal has reported that AIG intends to consolidate all of its US life insurance and retirement planning operations under SunAmerica. It is not known how this move would affect American General or its products.
The American General Insurance Company started in Texas in 1926. The company grew into one of the largest US insurers by making numerous acquisitions. It entered the annuities market by purchasing the Variable Annuity Life Insurance Company in the 1970s. American General entered the consumer finance field in 1982. During the 1980s and 90s it bought up several other major insurers including National Life & Accident, National Western Corporation, and Franklin Life. American General became part of AIG in 2001.
Financial Ratings for American General
Despite its association with AIG, American General does get good financial ratings. The company's website mentions that the financial ratings provided are for AIG.
A.M. Best rated the company as excellent and gave it a grade of A. Best stated that American General had an excellent ability to meet its long-term financial obligations.
Fitch also gave American an A and noted that it had a strong capacity to fulfill its obligations. Fitch's analysts did feel that the company was vulnerable to market conditions.
Moody's rated American General at Aaa and stated it had good characteristics of financial security. Moody's analysts also believed AIG was vulnerable to economic conditions.
S&P's analysis echoed the others, by giving American General an A. Its analysts did state that they felt American General is more vulnerable to business conditions than other insurers.
American General Life Insurance
At present American General is offering annuities, health insurance, life insurance, and long term care insurance. The list of life insurance policies is similar to those offered by the company's competitors. Policies available include term, universal, indexed universal, whole and variable universal.
Consumers can select the terms they want through the company's Select a Term offerings. These offer a choice of 5, 10, or 30 year terms for policies. Riders offering accidental death, disability, waiver of premium, and child coverage benefits are available. A slightly different version of the Select a Term, the ROP, offers a selection of 17 different terms. The ROP can be converted into a permanent policy while the normal Select a Term cannot. A terminal illness rider is also available on this policy.
The universal policies offer similar benefits to the Select a Term with the added benefit of cash value. Some more flexible universal offers are also available including the Continul which also purchasers to select the amount of coverage.
American General is still offering indexed universal life insurance. Its site mentions the Index Interest plan which has offers a rate based on the S&P 500. The Elite Global products let policyholders invest in European and Chinese indices as well as the S&P. A survivor indexed policy is also available.
Very basic whole life insurance starting at $5,000 is also available. This provides similar benefits to the term plans but does provide for an automatic premium loan option.
Only one variable universal policy, the Executive Advantage, is currently being offered by American General even though several others are mentioned on its website. This provides for investment in a wide variety of top mutual funds but the benefits are not spelled out.
American General Annuities
American General is currently offering ten different deferred annuities and one fixed annuity product. It would seem that all of AIG's annuities have been moved to American General because annuities are no longer available through the SunAmerica site.
Five fixed-deferred annuities and five indexed deferred plans are mentioned at the American General website. The details of these products are not mentioned. Instead the company asks shoppers to call the "annuity service center." This lack of online information could indicate major changes to product offerings in the near future.
Only one immediate annuity product is currently mentioned at American General's website. No details about this product are provided either. This lack of information could also indicate an impending sell of American General's annuity business to another company.
No retirement planning or long term investment tools behind annuities are available from American General. It appears that AIG has moved all of these services to SunAmerica.
American General's insurance offerings still seem fairly good but the lack of information about its annuities raises some questions. Those seeking an annuity should probably look to other providers that offer more complete information.