Life Insurance Company of Alabama Review

Pros Explained

• Claim forms available online: If you need to file a life insurance claim, all of the required forms are easy to find and download online, which can help expedite the process. 
• Online portal for policy management: Policyholders can sign into their online LICOA account to access their policy details and pay their premiums.

Cons Explained

• Limited state availability: LICOA only sells life insurance products in 11 states. 
• No online quotes: You can’t get an instant online quote for any of LICOA’s insurance products. You must submit the online form or contact an agent directly. 
• Few policy offerings: The only types of life insurance that LICOA offers are term life and whole life. Additionally, the company doesn’t advertise any riders on its website.
• No 24/7 customer service: If you have to contact LICOA headquarters, you’ll need to call the company during business hours or submit the online form. 

Available Plans

LICOA sells term life insurance and permanent life insurance. Both policies require most applicants to complete a medical exam, and there are no guaranteed issue policies available. Because LICOA is not a mutual company, policyholders don’t have the opportunity to earn dividends. 

One of the biggest downsides to LICOA is that the company doesn’t include much information online about the coverage for its life insurance policies. For example, you won’t find policy limits or term lengths. We recommend reaching out to the company to find out what each policy covers in your specific state.

Here is a closer look at the types of life insurance that LICOA sells:

Term life insurance

Term life insurance offers coverage for a specific period of time, usually anywhere from five to 30 years, depending on the provider. Term life policies have a level premium and a guaranteed death benefit. When you pass away, your beneficiary can collect the death benefit tax-free and use it for any purpose. To get LICOA term life insurance, most policyholders should expect to take a medical exam.

Permanent life insurance

Whole life insurance is permanent coverage that lasts for your entire lifetime. It has level premiums and a guaranteed death benefit that is tax-free. Whole life insurance also has a cash value component, which acts as a savings account. When the account reaches a certain amount, you have the option to borrow money from the cash value, similar to a personal loan. Whole life insurance from LICOA typically requires a traditional medical exam.

Available Riders

LICOA doesn’t disclose if any riders are available, which are optional add-on policies that can fill gaps in your coverage and provide protection in specific situations. To find out if any riders are available in your location, we recommend reaching out to an agent in your coverage area.

Customer Service

LICOA customer service is standard for smaller, regional life insurance companies. To contact the company's headquarters, you can fill out the online form or call 1-800-226-2371 during business hours, Monday through Thursday from 8:15 a.m. to 4:45 p.m. ET, and on Friday from 8:15 a.m. to 12:15 p.m. ET.

However, if you want to get a quote or buy a policy, you will need to work with an independent agent who might offer different business hours. You can visit LICOA’s website and fill out the "find an agent" form to get connected to an agent in your area.

Complaint Index

The National Association of Insurance Commissioners (NAIC) Company Complaint Index is a rating system that scores licensed insurance companies based on feedback from current customers. Complaint scores are based on criteria such as claim satisfaction, the cost of premiums, and agent interactions.

For individual life insurance, LICOA’s NAIC Complaint Index score for 2021 was 0.0, which means it had no complaints. The company also had zero complaints in 2020 for individual life insurance.

However, the company had a complaint score of 1.30 for all products in 2020, including policies like disability insurance and dental insurance, which is above the industry average score of 1.0. This indicates that LICOA may have issues with customer service or claim payouts unrelated to life insurance specifically. 

Third-Party Ratings

Financial strength ratings are important to look at before you choose an insurance company. These scores account for the insurance company’s balance sheet, debt obligations, and overall business performance. LICOA’s third-party ratings for financial strength are decent but not great. AM Best gives LICOA a B++ rating, which is considered good. For comparison, many of the highest-rated life insurance companies have scores of A+ or better.

Also, AM Best ratings can indicate how likely an insurance company is to go out of business or declare bankruptcy. Having an excellent letter-grade AM Best rating also proves that a company had enough available funds to repay policyholders in full after a claim, without delay.

Cancellation Policy

You can cancel a LICOA life insurance policy at any time and for any reason. 

Most life insurance companies also offer a free look period, which allows you to buy a life insurance policy and cancel it within a specific period without paying anything. LICOA doesn’t disclose its look period length, but it’s usually between 10 days and one month. 

To cancel a term life insurance policy from LICOA, you have a few options. You can either contact your agent to formally terminate the policy or you can stop paying the premiums. You won’t receive any compensation from the insurance company when your coverage ends.

To cancel a whole life insurance policy, it’s recommended to notify your agent. Some life insurance companies charge a cancellation fee for permanent policies, so we recommend contacting your LICOA agent to ask about penalties. If you cancel a whole life policy, you will be compensated for the unused cash value, minus any cancellation fees. 

Price

The cost of life insurance is different for every individual. To get a personalized rate quote from LICOA, you can fill out the online form to request a quote. You can also get a quote by calling an agent directly. Life insurance premiums are based on personal factors, like your overall health, age, history of pre-existing conditions, and your coverage limit. Most of the time, term life insurance is cheaper than permanent life insurance. 

In addition, your birth biology can impact your rate. If you identify as non-binary, it won’t affect your ability to get a life insurance policy, but it may affect your quote. However, every life insurance company has different underwriting guidelines for non-binary and trans individuals. We suggest contacting a LICOA agent to learn more about the company’s policies. 

Competition

Every life insurance company has pros and cons. Before you select a provider, it’s a good idea to compare several companies. If you are looking at life insurance from LICOA, another provider you might consider is Mutual of Omaha.

Mutual of Omaha is a larger life insurance company with 1.83% of the total market share. The company sells term, whole, and universal life insurance policies, plus a variety of riders, in all 50 states and Washington D.C.

We also like that Mutual of Omaha offers online quotes for term life insurance, has an online claim system, and has several online tools and resources aimed at first-time life insurance buyers.

Here are some of the main differences between LICOA and Mutual of Omaha:

Final Verdict

Based on our research, LICOA is not the best life insurance company on the market. It has a limited coverage area, few policy offerings, and no online quotes or claims. Plus, the company’s website lacks important information about what its policies cover and what riders (if any) are available. 

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 that of other major life insurance companies. Lastly, we look at how third-party organizations rate the company to determine its reliability and overall reputation.