AFBA Life Insurance Review

Pros Explained

• $15,000 emergency death benefit: With an AFBA policy, your beneficiaries will be mailed a $15,000 emergency death benefit payment in as little as one business day of notification of death; this is a significant help when families need to make burial arrangements. 
• Simplified issue on some policies: When you apply for life insurance, some companies will require you to undergo a medical exam and have bloodwork collected. However, some of AFBA’s policies are simplified issue, meaning you can get coverage up to a set amount without a medical exam. 
• No war or terrorism exclusions: Most life insurance companies contain war or terrorism exclusions, meaning they won’t pay out a benefit if the covered person is killed while serving in a war zone or from a terrorist attack. AFBA’s policies don’t have these exclusions, making it a valuable option for active military. 

Cons Explained

• Policies aren’t available to the general public: To qualify for an AFBA policy, you must be a military service member, veteran, DoD contractor, government or municipal employee, first responder, or a spouse of a qualifying member. Otherwise, you are ineligible for AFBA’s life insurance policies. 
• Relatively low coverage maximums: While some insurance companies offer coverage amounts of $1 million or more, AFBA’s policies are more limited; the maximum cap is $500,000.

Available Plans

AFBA offers group and individual life insurance policies. The only type of coverage it sells is term life insurance, but there are some variations between its available plans. 

Term life coverage is a popular choice because it tends to be more affordable than other types of life insurance, but it only provides temporary coverage. You choose a policy term and if you pass away within that term, your beneficiaries receive a death benefit. After the term ends, your beneficiaries receive nothing if you pass away. 

AFBA has four different term life options: 

Better Alternative Term

Better Alternative Term coverage is available to active duty military, retirees, and separatees. You can purchase $50,000 to $400,000 of coverage. If you opt for a coverage amount under $250,000, and you're under age 50, you don’t have to undergo a medical exam.

Rather than choosing a specific term, the Better Alternative Term policy will last until you turn 70 as long as you pay your premiums on time.  

Group Level Term 

AFBA has policies specifically created for different groups. In general, they are group level term policies that provide up to $500,000 in coverage. No medical exam is required for coverage amounts up to $250,000 if you're under 50, and your plan will last until you turn 70 as long as your premiums are paid on time. 

Children Term 

With a standalone children’s term policy, you can purchase up to $50,000 of level term insurance for your children between the ages of one and 17. If you continue to pay the premiums, the policy will last until the child turns 70. However, the premiums remain level only until the covered child turns 45; after that, rates increase as the child reaches different age brackets. 

Smart Start Child

If you want to provide a child or grandchild with basic life insurance protection, the Smart Start Child plan provides up to $15,000 of coverage. Children must be between the ages of 14 days and 18 years, and the policy lasts until they turn 25. 

This plan only has a single premium payment. You can purchase $10,000 of coverage for $150, or $15,000 of coverage for $225. 

Once the child turns 25, they have the option of converting the policy to a whole life policy up to five times the original benefit amount without a medical exam. 

Available Riders

Like other insurance companies, AFBA and 5 Star Life have optional insurance riders you can add to your policy to purchase additional coverage for yourself or loved ones. AFBA has a limited number of riders available: 

Child Insurance

When you apply for life insurance from AFBA, you can also elect to purchase coverage for your child. You can get up to $25,000 in child term insurance. Children under the age of 21 are eligible, or they can be up to 23 if they are full-time students. 

Spouse Coverage

You can also get life insurance for your spouse when you apply for insurance. You can get up to $500,000 of coverage for your partner on the same application. 

Family Survivor Scholarship

An included benefit on AFBA policies is the Family Survivor Scholarship. Your spouse and your children will receive up to $10,000 per year, per family, if you are killed in a combat zone or because of acts of foreign terrorism. The maximum benefit is $40,000 per family, and the scholarship is not available to residents of New York and in Virginia it's only available to First Responders. 

Customer Service

With AFBA plans, you can get quotes and policy information online. When you’re ready to apply, you can call AFBA directly or contact an insurance agent. AFBA is available Monday through Friday from 8 a.m. until 6 p.m. EST at 800-776-2322. You can also contact customer support by sending a secure message.

If you’d prefer in-person assistance, you can contact AFBA and ask to be connected to a field service representative. Just call the customer service line and ask to speak with an agent. 

Complaint Index

The National Association of Insurance Commissioners (NAIC) issues complaint ratios that reflect the number of complaints submitted relative to a company's size. 

The industry standard is 1.0. If a company’s ratio is above 1.0, it received more complaints than is typical for a company of its size. Similarly, ratios below 1.0 indicate the company received fewer complaints than expected. 

In 2021, 5 Star Life’s complaint ratio was 0.92, sitting right below the industry standard. Most complaints concerned how claims were handled and policies were underwritten. For the past three years, its complaint ratio has been worse than the industry standard.

Third-Party Ratings

AFBA and 5 Star Life were not included in the J.D. Power 2022 U.S. Individual Life Insurance Study. However, the companies are highly regarded by industry leaders like AM Best, the credit rating agency that focuses on insurers. 

In 2022, AM Best issued 5 Star Life an A- (Excellent) rating, reflecting the company’s financial stability and strong business outlook.  

Cancellation Policy

Like other companies in the United States, AFBA has a 10-day free look period. During that time, you can decide to cancel your policy without penalty, and AFBA will send you a full refund. 

Once the free look period ends, you can cancel your AFBA policy at any time. However, you won’t get a refund of any premiums you paid. 

To cancel your policy, contact AFBA’s customer support team at 800-776-2322. 

Price

Since AFBA offers group rates to its members, its policies are often less expensive than policies sold by other companies. When we got quotes for various coverage amounts, we found its premiums to be competitive with industry leaders. 

For example, below are the estimated monthly premiums for a 25-year-old male in good health.

General quotes are available online. However, you’ll need to call AFBA or speak with an agent to get detailed rate information. 

As with other life insurance companies, AFBA requires you to select either “male” or “female” when you apply for insurance. Being nonbinary doesn’t disqualify you from getting life insurance. However, you should be aware that most insurance companies haven’t updated their underwriting processes to reflect a current awareness of gender issues. 

Competition

While AFBA is a useful option for qualifying members, its policies aren’t available to everyone and it’s coverage amounts are limited. Plus, it only offers term life policies; if you’d like any other type of insurance, you’ll have to apply with another insurer. 

Another company to consider is New York Life, one of our picks for the best life insurance companies. The company sells 10 life insurance plans, including term, whole, universal life, and variable universal life policies. It stands out from AFBA due to its high coverage limits—you can get up to $1 million of coverage or more—and its long list of available riders, including accidental death benefits, waiver of premium riders, and chronic care riders. 

New York Life also has a better track record of customer service. Its complaint ratio for 2021 was just 0.17, far better than the industry standard.

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Methodology

Our reviews of life insurance companies are based on a quantitative methodology that analyzes each insurer on their stability and reliability, customer service, claims experience, diversity of product lines, and cost. We compare the terms of each type of policy offered—including available coverage amounts, optional riders, and premium payment options—with those of other major life insurance companies. Lastly, we look at how the company is rated by third-party organizations to determine its reliability and overall reputation.