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USAA is one of the biggest insurance companies in the country. Their ratings are enviable and their reputation is impeccable, except for one large chink in their armor. They stink at underwriting.

Like a lot of large auto and homeowners insurance companies, USAA makes it clear that when you have life insurance needs, they would be glad to be your one stop shop. Whether it is USAA, State Farm or Allstate, they really do want all of your disposable insurance premium, an honorable goal if they provided the most bang for your buck in all of the areas the want to serve.

With USAA what I keep running into is their underwriting of mood disorders being, at best, a bit on the brutal side. I recently worked for a doctor in New York who had been approved by USAA at standard rates (4th best rate class), due to his treatment of mild job related stress and anxiety with Wellbutrin. This is mild situational stress and anxiety with no hospitalization, lost time or issues of any sort. Standard is a brutal, rubber stamp kind of underwriting reaction.

I suggested to him after hearing his story that I thought we could get a preferred rate (2nd best rate class), and we did. Lincoln Life came through for us and we have put the new policy in force at right at half the price that USAA wanted.

As I mentioned, this seems to be a common theme with property/casualty companies that also write life insurance. They have it and it’s real, but the underwriting, whether it’s something as simple as anxiety, or as complicated as bipolar disorder, diabetes or prostate cancer, just isn’t as good as you can find elsewhere.

Bottom line. If you have your life insurance through USAA, it’s worth shopping to see if you are being gouged for the sake of convenience.