Life-insurance · Supporting
American Income Life insurance: what buyers should know
Last reviewed September 3, 20264 min readBy the Goodsurance editorial team Reviewed by the Goodsurance editorial team
American Income Life Insurance Company (AIL) is a subsidiary of Globe Life Inc., a publicly traded insurance holding company. AIL was founded in 1951 and is headquartered in Waco, Texas. Its market has always been organized labor: the company built its distribution network through partnerships with labor unions, credit unions, and trade associations, reaching members who receive benefits information through their affiliated groups.
What American Income Life is
That model separates AIL from carriers that sell through independent brokers or employer group plans. AIL agents typically contact union or association members directly, working from referral lists provided by the affiliated organization. The pitch focuses on voluntary, member-pay coverage that the employer or union does not fund.
Products AIL offers
AIL primarily offers two categories of life insurance:
Term life. Covers a fixed period (commonly 10, 20, or 30 years) and pays the death benefit only if the insured dies during the term. According to the ACLI 2025 Fact Book, term policies made up 39.3% of individual policies purchased in 2024, making them the most common policy type by count.
Whole life. A permanent policy that does not expire as long as premiums are paid, builds cash value over time, and locks in a fixed premium at issue. Permanent products (whole and universal life combined) accounted for 72.1% of the total face amount sold industrywide in 2024, meaning the bulk of protection in force sits in permanent coverage even though term outsells it by policy count.
AIL also markets supplemental products: children's life insurance, and accident or sickness riders. Face amounts tend to run on the smaller end of the market, suited to fill gaps in a broader coverage plan rather than serve as a household's only policy. The average new individual life insurance policy nationwide carried a face amount of $209,000 in 2024, up from $168,000 a decade earlier, according to the ACLI.
- Coverage lasts a set number of years
- Lower starting premium
- No cash value builds up
- No payout if you outlive the term
- Coverage never expires while premiums are paid
- Builds cash value over time
- Premium stays fixed from day one
- Higher starting premium than term
How AIL reaches buyers
The union and association channel is the defining feature of AIL's model. When a labor union signs a sponsorship or endorsement agreement, agents gain access to member contact information. Members may receive a mailer, a phone call, or a home visit explaining available coverage.
A few things buyers in this channel should keep in mind:
- The union or association endorses the program, but AIL underwrites and owns each policy. The coverage is not a union benefit funded by dues.
- Agents are typically independent contractors compensated on commission. Their incentive is to place a policy; they are not acting as fiduciaries.
- Coverage is portable. Because each policy is an individual contract, it stays with the insured if union membership ends or the union changes its relationship with AIL.
- The initial contact is a sales visit, not an impartial benefits consultation. Treating it that way helps buyers stay in an evaluative mindset.
None of this means the coverage is unsuitable. It means context matters, and buyers should apply the same due diligence they would to any unsolicited insurance offer.
What to check before signing
A short checklist reduces the chance of buyer's remorse, regardless of which insurer approaches you.
Verify state licensing. Every state insurance department maintains a public license lookup for agents and companies. Confirming that both the agent and AIL hold valid licenses in your state takes only a few minutes and costs nothing.
Check the NAIC complaint ratio. The National Association of Insurance Commissioners (NAIC) publishes a complaint index for every licensed insurer. A ratio above 1.0 means the company drew more complaints than the market average for its size; below 1.0 means fewer. This is one of the cleaner apples-to-apples signals available without reading individual reviews. The lookup is free at naic.org.
Review the AM Best financial strength rating. AM Best rates insurers on their ability to pay claims over time. Ratings run from A++ (Superior) downward. A strong rating means AM Best has assessed the company as having adequate reserves under adverse conditions. Ratings are available free at ambest.com.
Use the free-look period. Most states require insurers to give policyholders a review window after a policy is delivered. If anything in the contract differs from what the agent described, that window is your clean exit with a full refund. Length varies by state, so confirm yours with your state's department of insurance.
Match the face amount to your actual need. Smaller supplemental policies complement primary coverage. They work best alongside a policy sized to replace your income, not instead of one.
Five quick checks before you sign
Verify state licensing
Look up the agent and company at your state insurance department's free public license search.
Check the NAIC complaint ratio
A ratio above 1.0 means more complaints than average for its size. Free lookup at naic.org.
Review the AM Best financial strength rating
A strong rating means the insurer has been assessed as able to pay claims over time. Free at ambest.com.
Use the free-look period
If anything in the contract differs from what the agent described, you can cancel for a full refund during this window.
Match the face amount to your actual need
Smaller supplemental policies work best alongside a primary policy sized to replace your income, not instead of one.
How state guaranty associations protect policyholders
If a licensed life insurer fails, state guaranty associations step in to honor claims up to statutory limits. According to the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA), most states protect death benefits up to $300,000. Six states set the cap higher, at $500,000. Cash value on permanent policies has a separate, typically lower, protection limit that varies by state.
This protection applies automatically to policyholders of licensed insurers in their state of residence. There is no separate enrollment and no added fee.
The guaranty system exists for true insolvency events, which are rare in the life insurance industry. Its presence is not a substitute for checking financial strength ratings, but it does mean that even a carrier failure does not necessarily translate into total loss for a policyholder.
Most states cover your death benefit up to $300,000 if your insurer fails.
Common questions about IRMAA appeals
Quick answers, fast .
Tap any question to expand. Each links to a fuller standalone answer.
What is life insurance: how it works and why it matters
Life insurance is a legal contract in which an insurer agrees to pay a named beneficiary a set sum of money when the insured person dies, in exchange for regular premium payments.
What is cash value in a life insurance policy?
Cash value is a savings piece built into some permanent life insurance policies.
Part of each payment goes toward the cost of the coverage. Another part goes into an account that can grow over time. The growth is usually not taxed while it stays inside the policy. Cash value builds slowly at first, so it takes many payments before the account holds much. Term policies do not have cash value.
Who is critical illness insurance for?
It is built for people who would struggle if their income stopped during a serious illness.
That often means workers without much savings, people with limited paid leave, or someone who is the main earner in a household. It can also help people who expect extra costs during treatment, like childcare or travel. It is less useful if you already have savings you can reach quickly. Read the covered condition list first.
What happens to the cash value when the insured person dies?
With most permanent policies, the insurer pays the death benefit and keeps the cash value.
Your family does not get both amounts added together. Some policies offer a different setup where the cash value is paid on top of the death benefit, but that choice usually costs more. If you took a policy loan and never paid it back, the loan and its interest are subtracted from what your family receives.
What is critical illness insurance?
Critical illness insurance pays you a single lump sum of cash if a doctor diagnoses you with a covered illness.
Covered conditions are listed in the policy and often include a heart attack, a stroke, or cancer. The money comes to you, not to a doctor or a hospital. You choose how to spend it. If your illness is not on the list, or does not match the policy wording, no benefit is paid.
Does critical illness insurance pay the hospital directly?
No.
The money goes straight to you, not to the hospital or the doctor. Critical illness insurance is not health coverage and it does not settle bills for you. Once you file a claim and the insurer approves it, you get one payment to use any way you want. Many people use it for rent, groceries, travel to treatment, or lost pay while they are out of work. Bills still arrive as usual.
Can you take money out of the cash value in a life insurance policy?
Yes.
Most permanent policies let you use the cash value once it has built up. You can borrow against it, take a withdrawal, or end the policy and take what is left. A loan is not free; interest is added, and unpaid loans lower the amount your family gets later. A withdrawal can also shrink the death benefit. Rules differ by policy, so read your own contract before you touch the account.
What is final expense insurance?
Final expense insurance is a small permanent life insurance policy meant to cover costs at the end of life.
Families often use the money for a funeral, a burial or cremation, and leftover bills. Because the coverage amount is small, the payments are smaller than a large policy. Health questions are limited or skipped. The policy stays in force for life as long as you keep paying, and it pays cash to the person you name.
Does final expense insurance require a medical exam?
It depends.
Many final expense policies skip the exam and ask only a short list of health questions. Some skip the questions too and accept almost anyone. Those easy accept policies often use a graded death benefit, which means the full amount is not paid if death happens soon after the policy starts. If you can answer health questions and pass, you usually get better terms. Ask which type you are being offered.
What can the money from a final expense policy be used for?
Anything.
The insurer pays cash to the person you name as beneficiary, and that person decides how to spend it. Most families put it toward a funeral, a burial or cremation, a headstone, or travel for relatives. It can also cover final medical bills, unpaid rent, or credit card balances. The money is not locked to a funeral home unless you sign a separate agreement that assigns the benefit to one.
What is a fixed annuity?
A fixed annuity is a contract with an insurance company.
You hand over money, and the company agrees to credit interest at a set rate for a set period. Your balance does not fall when markets fall. Later you can take the money as income, either for a chosen number of years or for the rest of your life. Growth inside the contract is not taxed until you take money out.
What is universal life insurance?
Universal life insurance is a permanent policy, which means it is built to last your whole life.
It has a death benefit for the people you name and a cash value balance inside it. What sets it apart is flexibility. Within limits set by the company, you can change how much you pay and when, and you can often adjust the death benefit. The company takes the cost of insurance out of the cash value each month.
References
- ACLI 2025 Life Insurance Fact Book, Chapter 7Industry data on policy counts, face amounts, and the split between term and permanent coverage through 2024.
- NOLHGA: How you're protectedExplains state guaranty association coverage limits and how the system activates when a life insurer fails.
- NAIC Consumer Information SourceFree public lookup for insurer complaint ratios, license verification, and financial data across all 50 states and the District of Columbia.