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

Updated May 2021.

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 makes our top ten list.

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:

• Insurer financial strength
• Time in business
• Term policy options
• Permanent policy options
• Eligibility

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:

• USAA vs Navy Federal
• USAA vs Navy Mutual
• USAA vs Geico

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 its 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’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 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 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+

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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.

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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:

• Term life insurance
• Permanent life insurance

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’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 $8 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 policy with benefits around military member needs like coverage during war and the below features:

• $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

Navy Federal’s term policy options

Navy Federal does not issue life insurance policies. However, you can view insurance policy options and quotes online by clicking a link from its website.

If you're not a military member, you can compare policies from multiple insurers after providing some personal details.

If you are a military member, you'll be redirected to Navy Mutual to view options.

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
• Level premiums

The Level II Plus policy is sold in $10,000 increments with a range of $50,000-$1,500,000. The minimum term length is 10 years.

The Level II Plus policy is also convertible to a whole life policy without a physical. To convert your policy, you must have at least five years left on the term and be under 71 years old.

Consumers can add the following riders to their policy:

• Extended guaranteed convertibility
• Accelerated death benefit
• Child benefit

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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.

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.

You can also purchase a guaranteed life insurance policy underwritten by Mutual of Omaha. This policy offers lower coverage levels and no underwriting is required to issue the policy. You must be between ages 45 and 85 (50 and 75 in New York) to be eligible for the policy.

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 the face amount is over $100,000.

Navy Federal’s permanent policy options

Navy Federal does not issue life insurance policies. If you're interested in a whole life insurance policy, you can view policy options from multiple insurers. Again, you'll need to indicate if you're a military member or not.

If you're not a military member, you'll provide some basic information and be able to view policy options and pricing from multiple insurers.

If you're a military member, you'll be directed to Navy Mutual.

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 $1,500,000. The cash value of the policy grows in safe, tax-deferred investments. You'll need to have a medical exam as part of the underwriting process.

If you'd rather not have a medical exam, you may be able to get a guaranteed issue policy. To be elilgible, you need to be within 120 days of separation from the military and have been covered by SGLI during your military service.

A Flagship Whole Life policy also includes accelerated death benefit and paid-up additions features. You'll need to decide which accelerated death benefit option you want to include on your policy.

• 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.

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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 (Honorable discharge)
• Family (widows, widowers, un-remarried former spouses of USAA members, children and step-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)

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Additional services

USAA offers many financial products in the following categories: insurance, banking, investing, real estate, and retirement. It also offers 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 does not issue insurance.

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.

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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 Undisclosed Through Navy Mutual No No Yes Undisclosed Undisclosed
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, Until Age 65, or Duration of Policy   Can add children to policy   Yes Yes	Yes, through other insurers Undisclosed Undisclosed   No   No Not Applicable

(Updated for 2021)

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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 18-75 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, Until Age 65, or Duration of Policy   Undisclosed Undisclosed   Yes Yes	Yes Undisclosed Undisclosed     Yes Yes   No Not Applicable

(Updated for 2021)

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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.

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