USAA vs. Navy Federal vs. Navy Mutual Life Insurance 2020 Review

Share:

Facebook Tweet mail
blog post author image
Written by Alice Stevens | Last Updated January 28th, 2020
Alice Stevens is a language enthusiast, loves history, and enjoys traveling. She manages content for BestCompany.com specializing in finance, insurance, and car warranty.

USAA vs Navy Federal vs Navy MutualUpdated January 2020.

Life insurance is an investment. Choosing a strong, well-regarded, reliable company is important when purchasing life insurance.

There are many life insurance providers. However, only a few deal specifically with the needs of military service members and their families, like USAA, Navy Federal Credit Union, and Navy Mutual Aid Association.

Over the years, USAA has earned high financial strength ratings and developed a good reputation of service. Its life insurance product offerings are designed with military needs in mind. With these factors, it’s no surprise that USAA ranks so high on our list of top insurance providers.

However, Navy Mutual and Navy Federal have their own strengths. Navy Federal offers its life insurance products through subsidiaries and other companies, which means that it has more policy options.

Navy Mutual has great life insurance options — three term policies and whole life. The only difference between Navy Mutual and USAA’s policy offerings are that USAA includes a severe injury benefit in its military term policy and offers universal life insurance in addition to whole life insurance.

What follows is a comparison of these three companies. You’ll see how they compare on the following criteria:

Because USAA, Navy Mutual, and Navy Federal are financial institutions, their other services like banking may be included in your consideration. We've added a bonus section to cover these additional services.

You can also view side-by-side comparisons at the end of the article or by clicking the links below:

Life insurance basics

Life insurance helps secure your family’s financial stability by providing a death benefit. The amount of the death benefit depends on how much life insurance is purchased. Permanent life insurance policies have the ability to build cash value in addition to the death benefit. 

This money is not subject to income taxes and can be used to pay off debt, pay for funeral expenses, the beneficiaries’ living expenses, a dependent’s college education, etc.

Life insurance costs

The monthly premium varies depending on several factors:

  • Kind of policy purchased
  • Amount of life insurance purchased
  • Payment plan selected (applies to permanent policies)
  • Lifestyle and career
  • Health
  • Age
  • Gender

Life insurance companies often have online life insurance calculators to help you determine how much life insurance you should purchase. Consumers can receive quotes on life insurance when they supply information about their health, age, gender, etc. online or when working with an insurance agent.

Some plans do not require a medical exam, which means that health is not a criteria when determining the monthly premium rate. These rates are often higher.

Financial strength ratings

Before you start paying for a life insurance policy, you’ll want to be confident in the company’s ability to meet its claims obligations. Looking at financial strength ratings will help you understand if a life insurance company will be able to pay the large lump sum death benefit to your beneficiaries.

There are four common Insurer Financial Strength rating companies. Each rating service has its own rating system that it applies when auditing an insurance company’s finances. Not every life insurance company is rated by these agencies. 

A.M. Best has 16 possible ratings. The Financial Strength Rating scale is Superior (A+ and A++), Excellent (A and A-), Good (B+ and B++), Fair (B and B-), Marginal (C+ and C++), Weak (C and C-), Poor (D). More pluses indicates a higher level in the category. A minus indicates a lower level within the category. A.M. Best also has non-rating designations.

Moody’s Investors Service has 21 possible ratings. Aaa is the highest rating on Moody’s Global Long-Term Rating Scale.

Standard and Poor’s also has has 21 possible ratings. A rating of AA+ from Standard and Poor’s is just below its highest rating category of AAA.

Fitch Ratings is another common ratings services company. It’s rating criteria for insurance companies is trickier to pin down. However, an A+ rating denotes stability and a good level of financial strength.

Ratings at a glance

USAA

A.M. Best: A++

Moody’s Investors Service: Aaa

Standard and Poor’s: AA+

Fitch: Not Rated

Navy Federal

A.M. Best: Not Rated

Moody’s Investors Service: Not Rated

Standard and Poor’s: Not Rated

Fitch: Not Rated

Navy Mutual

A.M. Best: Not Rated

Moody’s Investors Service: Not Rated Standard and Poor’s: Not Rated

Fitch: A+

(Ratings from 2019)

USAA’s financial strength ratings

USAA’s life insurance companies have some of the highest ratings in the industry.

  • A.M. Best: A++
  • Moody’s Investors Service: Aaa
  • Standard and Poor’s: AA+ 
  • Fitch: Not Rated

These high ratings from 2019 show that USAA is prepared to meet its claims obligations, which makes it a good company to trust when purchasing life insurance.

Navy Federal’s financial strength ratings

Navy Federal Credit Union does not have Insurer Financial Ratings listed on its website. 

  • A.M. Best: Not Rated
  • Moody’s Investors Service: Not Rated
  • Standard and Poor’s: Not Rated
  • Fitch: Not Rated

Navy Federal is also not responsible for meeting life insurance claims. Customers considering a life insurance policy through Navy Federal should understand who is responsible for paying claims and what the claims process is.

Navy Federal Credit Union offers life insurance policies through its subsidiary Navy Federal Financial Group that works through COVR Financial Technologies, LLC. It also partners with Navy Mutual Aid Association to offer additional life insurance policies tailored for military needs. Navy Federal offers supplemental accidental death life insurance policies through TruStage.

Navy Mutual’s financial strength ratings

Navy Mutual has earned one of Fitch’s high financial strength ratings for 15 consecutive years. It does not list ratings from other agencies.

  • A.M. Best: Not Rated
  • Moody’s Investors Service: Not Rated
  • Standard and Poor’s: Not Rated
  • Fitch: A+

Back to Menu

Time in business

The longer a company is in business, the more experience it has. It is also likely to continue its existence in the long-term. Both experience and longevity matter when choosing a life insurance company. You want to buy life insurance from a stable company with a good reputation that will still be around when your beneficiaries file claims.

USAA was founded in 1922 to provide life insurance to military members. With nearly a century’s worth of experience, USAA is a reliable, trustworthy company.

Navy Federal Credit Union was founded in 1933. It has almost as much experience in the financial industry as USAA does, though it does not specialize in life insurance.

Of the three companies, Navy Mutual Aid Association has the most experience. It was founded in 1879. It is another trustworthy and reliable company.

Back to Menu

Life insurance products

Make sure you know what kind of a life insurance policy you want before you purchase one. Life insurance policies fall into two broad categories:

There are several kinds of permanent life insurance policies on the market. Term policies also vary in length. The specifics of each policy vary company to company, so it’s important to understand what you want and what a company offers.

Term life insurance basics

Term life insurance offers a death benefit for a certain period of time or until a certain age. If the insured passes away within the specified time frame, the insurance company pays beneficiaries a death benefit.

The death benefit can be used to pay for lingering debt, medical bills, funeral arrangements, or some of the beneficiary’s living expenses. Life insurance can be invaluable to dependent beneficiaries as they adjust to their new financial situation. 

Life insurance is also beneficial for non-dependent beneficiaries because they can use the money for funeral expenses, which are often high. This helps them avoid debt.

Term policies at a glance

USAA

Term length 

10-30 years

Ages Eligible 

18-35 years

Types of policies 

Term and Military Term

 

Premium Rate 

Consistent throughout term

Renewable? 

Undisclosed

Severe Injury Benefit

$25,000

Death Benefit Value

Varies

Medical Exam? 

Yes

Continued Coverage after Military? 

Yes

Riders 

Term conversion, child benefit

 

Able to add coverage?

Yes

Navy Federal

Term length 

Varies

Ages Eligible 

18-64 years

Types of policies

Digital Term Life Insurance

 

Premium Rate 

Consistent throughout term

Renewable?

Yes

Severe Injury Benefit

None

Death Benefit Value

$100,000-$3,000,000

Medical Exam?

No

Continued Coverage after Military?

Yes

Riders

Term conversion, accelerated death benefit, Haven Life Plus

 

Able to add coverage?

Undisclosed

Navy Mutual

Term length

Varies

Ages Eligible

18-75 years

Types of policies

Flex Term, Level II Plus

Premium Rate

Consistent throughout term

Renewable?

Undisclosed

Severe Injury Benefit

None

Death Benefit Value

$50,000-$1,000,000

Medical Exam?

Undisclosed

Continued Coverage after Military?

Yes

Riders

Guaranteed term conversion, child benefit, accelerated death benefit, extended guaranteed conversion

 

Able to add coverage?

Undisclosed

USAA’s term policy options

USAA offers term life insurance in 10, 15, 20, 25, and 30 year term lengths. The monthly premium rate remains consistent throughout the length of the policy. Individuals ages 18-35 are able to purchase a term policy with USAA. 

USAA’s term life insurance policies come with the following benefits:

Term conversion. Term life insurance policyholders can change their term policy into a permanent life insurance policy. According to the terms of the policy, there may be a set time limit for this conversion to occur.

Add coverage. Policyholders can purchase up to $100,000 of coverage if they experience a life change, like marriage, birth, or home purchase. Policyholders can also add their children to their policy for about $7 per month. When the insured child reaches adulthood, the term policy can be changed into a permanent policy depending on state laws and regulations.

USAA also offers a military term life insurance policy. This policy covers military members during war and includes specific benefits related to military service.

  • $25,000 for expenses caused by severe injury
  • Guaranteed coverage after leaving military
  • Can replace some or all of Servicemember Group Life Insurance (SGLI) lost from military separation or retirement

Applications for USAA military term life insurance policies can be fast-tracked through the approval process without a medical exam if the applicant is getting ready to be deployed. When the applicant returns home, they can undergo a more extensive underwriting process, including a medical exam, to determine eligibility for a lower premium rate.

Navy Federal’s term policy options

Navy Federal offers a Digital Term life insurance policy, which can be purchased by individuals 18-64. This policy has a short underwriting process and can be purchased quickly online.

This term policy is renewable at the end of the term and the face value amounts are between $100,000 and $3,000,000.

The Digital Term life insurance policy also includes a Haven Life Plus Rider, guaranteed renewability, and an accelerated death benefit rider. It is unclear what the benefits of the Haven Life Plus Rider are.

Navy Mutual’s term policy options

Navy Mutual offers three kinds of term policies:

  • Flex Term
  • Level II Plus

The Flex Term policy offers life insurance coverage geared for military members ages 18 to 45 with a death benefit of $50,000-$1,000,000 with a consistent monthly premium rate. This policy is available to nicotine users ages 18 to 35. It includes an accelerated death benefit rider to receive the death benefit early in the event of a terminal diagnosis, and guaranteed convertability to change the policy into a permanent one. The conversion must occur before your 48th birthday, or 38th birthday for nicotine users.

Policyholders may also add coverage for unmarried, dependent children under age 26 for an additional monthly charge. Applications must be received before the child's 21st birthday.

The Flex Term policy includes:

  • No restrictions for military service
  • Coverage after leaving the military
  • Guaranteed convertibility

Navy Mutual’s Level II Plus policy is designed to compete with Veterans’ Group Life Insurance (VGLI). It offers coverage until age 85 at three premium rates:

  • Standard: average health
  • Select: max payment plan of 30 years and above average health
  • Super-Select: same requirements as the Select rates and no nicotine, low-risk lifestyle, good family health history

The Level II Plus policy is sold in $10,000 increments with a range of $50,000-$1,000,000. The minimum term length is five years.

The Level II Plus policy is also convertible to a whole life policy without a physical. This guaranteed convertibility comes with a 5-year limit. 

Consumers can add the following riders to their policy:

  • Extended guaranteed convertibility
  • Accelerated death benefit
  • Child benefit

Back to Menu

Permanent life insurance basics

Permanent life insurance is life insurance coverage that lasts a lifetime. Permanent policies often have higher premiums. Unlike term policies, permanent policies accrue cash value through investments. The cash value can be accessed at anytime by the policyholder. For this reason, permanent policies are sometimes considered to be part of a retirement plan.

USAA’s permanent policy options

USAA offers two kinds of permanent life insurance: whole and universal. Permanent policyholders can pay an upfront fee to have premiums waived if they become disabled. Policyholders can also pay higher premiums to add coverage for their children or grandchildren.

Whole life insurance

With whole life insurance, the premiums remain consistent across the payment plan, the policy accrues cash value, and the policy does not expire. The cash value is additional money separate from the death benefit. 

USAA offers several payment plan options. Policyholders can pay for their policy over the course of 20 years, until they are 65, or for as long as they live. The payment schedule chosen will affect the monthly premium amount.

A whole life insurance policy grows cash value as it is invested. The growth is tax-deferred. Policyholders can access the cash value while still living. As long as what the policyholder accesses is less than or the same as what has been paid in, it is tax-free.

Universal life insurance

USAA’s universal life insurance also has cash value that builds over time. With a universal life insurance policy, policyholders have much more control over how high premium rates are and setting a payment schedule. Because of this, the premium rates may change year to year or month to month.

USAA guarantees interest rates for its universal life insurance policies based on the cash value. The more valuable a policy is, the higher the interest rate. The guaranteed minimum is 2 percent, but can be as high as 4.35 percent if over $100,000.

Navy Federal’s permanent policy options

Fully underwritten life insurance

With a fully underwritten life insurance policy, the approval process takes more time. A medical exam is required and can determine better premium rates. All ages can purchase this kind of life insurance through Navy Federal and choose from the top carriers. The face amounts can be as high as $10 million.

Navy Mutual’s permanent policy options

Navy Mutual only offers whole life insurance. Its policy is called Flagship Whole Life. $10,000 is the minimum amount of coverage available, but consumers can purchase up to $1,000,000. The cash value of the policy grows in safe, tax-deferred investments.

A Flagship Whole Life policy also includes accelerated death benefit and paid-up additions features.

  • Chronic illness accelerated death benefit. Insured individuals over 60 who have been diagnosed with a chronic illness can receive the death benefit early to help pay for medical expenses. The money is disbursed over the course of 48-60 months.
  • Terminal illness accelerated death benefit. Insured individuals can receive the lump sum death benefit payment early if they have less than 2 years to live. The policy has to have existed for at 5 years before this payout can be made.
  • Paid-up additions. This rider can be used to increase the death benefit and cash value. The lifetime maximum is $500,000.

For an additional cost, policyholders can add coverage for their children and grandchildren until they turn 26. Policyholders can also borrow up to 75 percent of their policy's cash value.

Back to Menu

Eligibility

USAA, Navy Federal, and Navy Mutual have eligibility requirements that must be met before becoming a member.

USAA members must meet be one of the following:

  • Active military
  • Former military
  • Family (widows, widowers, un-remarried former spouses of USAA members, children of USAA members)
  • Cadets
  • Midshipmen

Navy Federal has similar eligibility requirements as USAA. Eligible groups include the following:

  • Veterans
  • Armed Forces Personnel
  • Department of Defense
  • National Guard
  • Immediate family member who has a Navy Federal membership

To be eligible for a Navy Mutual membership, one of the following must apply:

  • Active duty military
  • Retired military
  • In the reserves or guard
  • Separated within 120 days of the US Military, USPHS, or NOAA
  • Honorably discharged Veterans (Rhode Island, Connecticut, Maryland, Virginia, North Carolina, South Carolina, Hawaii, Arizona, Oregon, Florida, Texas only)

Back to Menu

Additional services

USAA offers many financial products in the following categories: insurance, banking, investing, real estate, and retirement. It also offers members access to travel deals and a car buying service.

USAA makes online banking easy and convenient. Members can do direct deposit from their phones. You can open a checking account, savings account, and a credit card through USAA. It's also a lender, so home, auto, and personal loans are also available.

Navy Federal offers many of the same financial services that USAA does, including checking and savings accounts, credit cards, and several types of loans. It even offers student loans. However, Navy Federal's insurance offerings are not a robust as USAA's are.

USAA is a bank. Navy Federal is a credit union. The biggest difference between banks and credit unions is that banks are for-profit while credit unions are not. This difference may affect the interest rates available through each institution. 

In contrast, Navy Mutual specializes in life insurance, annuities, and financial planning. If you're looking for a credit union or a bank to keep your money, Navy Federal or USAA are good options.

Back to Menu

USAA vs Navy Federal

USAA has strong financial strength ratings. It is also known for its excellent customer service. It can be difficult for military members to be approved for a life insurance policy. It’s even rarer to see life insurance policies designed with military needs in mind. 

On the other hand, Navy Federal offers life insurance policies through other carriers, which means that it is not responsible for fulfilling claims. 

  USAA Navy Federal
Founded 1922 1933

Financial Strength Ratings

A.M. Best

Moody's

Standard & Poor's

Fitch

 

A++

Aaa

AA+

Not Rated

 

Not Rated

Not Rated

Not Rated

Not Rated

Term Policies

Term Length

Ages Eligible

Military Term

Severe Injury Benefit

Medical Exam

Term Conversion Rider

Child Benefit Rider

Accelerated Dealth Beneift Rider

 

10-30 Years

18-35 Years Old

Yes

$25,000

Yes

Yes

Yes

Undisclosed

 

Undisclosed

18-64 Years Old

Through Navy Mutual

No

No

Yes

Undisclosed

Yes

Permanent Policies

Whole Life

Medical Exam

Premium Payment Terms

 

Children's Whole Life

 

Universal Life

Ability to Add Children to Universal Policy

 

Yes

Undisclosed

Can Pay Over 20 Years, Unitl Age 65, or Duration of Policy

 

Can add children to policy

 

Yes

Yes

 

Yes

Yes

Undisclosed

 

No

 

No

Not Applicable

(Updated for 2020)

Back to Menu

USAA vs Navy Mutual

Navy Mutual Aid Association’s life insurance options are the most similar to USAA’s offerings because it has life insurance policies designed specifically with miliary needs in mind. There are no restrictions or limitations in its policies regarding military activities in its term life insurance policies.

The advantage of choosing USAA is that its military term life insurance policy includes a $25,000 serious injury benefit. Policyholders aren’t just paying for financial protection in the event of their death, they’re also paying for financial security if they become seriously injured. 

  USAA Navy Mutual
Founded 1922 1879

Financial Strength Ratings

A.M. Best

Moody's

Standard & Poor's

Fitch

 

A++

Aaa

AA+

Not Rated

 

Not Rated

Not Rated

Not Rated

A+

Term Policies

Term Length

Ages Eligible

Military Term

Severe Injury Benefit

Medical Exam

Term Conversion Rider

Child Benefit Rider

Accelerated Dealth Beneift Rider

 

10-30 Years

18-35 Years Old

Yes

$25,000

Yes

Yes

Yes

Undisclosed

 

Undisclosed

18-85 Years Old

Yes

No

Undisclosed

Yes

Yes

Yes

Permanent Policies

Whole Life

Medical Exam

Premium Payment Terms

 

Accelerated Death Benefit Rider

Paid-up Additions Rider

 

Universal Life

Ability to Add Children to Universal Policy

 

Yes

Undisclosed

Can Pay Over 20 Years, Unitl Age 65, or Duration of Policy

 

Undisclosed

Undisclosed

 

Yes

Yes

 

Yes

Undisclosed

Undisclosed

 

 

Yes

Yes

 

No

Not Applicable

(Updated for 2020)

Back to Menu

USAA vs Geico

Unlike USAA, Geico offers quotes for policies from multiple life insurance companies. After entering  information on its website, customers can view quotes and policy options from various companies. These are the companies that are responsible for paying the claims.

Geico can be a great research tool for civilians looking for good deals on life insurance policies. However, USAA has better options and services for military service members.

BestCompany.com recommends USAA because of its quality services and life insurance products for military members and their families.

Back to Menu

Ready to Buy Life Insurance?

Read real customer reviews and see top-ranked companies.

Find Best Life Insurance

The Top Life Insurance Companies

company logo
#1 Quotacy chevron_right
8.4 Overall Score
4.8
starstarstarstarstar_half
(33)
company logo
#2 Northwestern Mutual chevron_right
8.2 Overall Score
4.2
starstarstarstarstar_half
(40)
company logo
#3 Bestow chevron_right
7.7 Overall Score
4.7
starstarstarstarstar_half
(13)

Related Articles

2020 Review: Quotacy vs. Policygenius [Infographic]

May 31, 2019

Updated January 2020. Independent life insurance agencies or brokers are advantageous because they allow shoppers to fin...

Read More
5 Pieces of the Worst Life Insurance Advice

November 16, 2018

Updated January 20, 2020. You're in the market for a life insurance policy because you want to protect your loved ones ...

Read More
Retiring from the Military? 3 Money Moves to Help You Get ...

January 23, 2020

Guest Post by Jenny Campbell, Member Benefits Team Leader at AAFMAA For military servicemembers winding down an accompl...

Read More