In late 2022, my wife and I were finally able to lock in matching 20-year term life insurance policies at an affordable rate through Policygenius. For five years prior, I had been concerned that I wouldn’t be able to get approved at a reasonable price—all because of a mistake I made by visiting an overzealous sleep center.
Back in 2016, I was tired of paying $1,800 a month for a health insurance plan with UnitedHealthcare and never using it. I hadn’t seen a doctor in years, so when a new sleep center opened up nearby, I figured I might as well get checked for snoring and put my insurance to use.
Of course, one visit turned into a full battery of tests, costing my insurance company about $3,800. At first, I felt good—I was finally getting something for all those insurance premiums! But little did I know, that visit would come back to haunt me. The unfortunate consequence of going to the doctor was being flagged with a “sleep-related” issue, such as sleep apnea, which made it much harder to qualify for affordable life insurance later.
When I tried to renew my 10-year term life policy through USAA in 2017 at age 40, they quoted me $450/month—up from the original $40/month. A ridiculous 11X higher! No thanks. I'll look elsewhere.
My First Two Life Insurance Mistakes
My first real life insurance mistake was going to a doctor before renewing my policy. Had I kept a clean medical record—aside from routine physicals—my new policy would have cost closer to $120/month now that I was 10 years older. Always lock down an affordable life insurance policy before seeing the doctor for anything out of the usual.
But frankly, the first mistake was only getting a 10-year term policy at age 36. I should have gone for a 30-year term at around age 30. After 30, life tends to get much more complicated with housing and family.
Just a year later, I took out another $1+ million mortgage to buy a fixer-upper. Three years later, my son was born. When you have children and debt, life insurance becomes a priority. A 30-year policy back then would’ve cost me about $30/month—an absolute bargain in hindsight.
At least I managed to course-correct by securing a new 20-year, $750,000 term policy through Policygenius for $110/month in 2023. They matched us with SBLI, a carrier willing to underwrite both me and my wife, even with my prior sleep center visit.
But then I made another mistake—by far the worst one yet. It sickens me to write this, but as always on Financial Samurai, I share both the wins and the painful losses to try and help as many people as possible.
The Worst Life Insurance Mistake Possible
My wife recently asked me to send her our rental insurance policy from USAA because Wells Fargo, which holds our remaining rental property mortgage, needed proof of coverage.
When I logged into my USAA dashboard, something odd caught my eye:
“Level Term Series V Policy – $1,000,000 for 10 years.”
It looked like my old term life policy, so I clicked in. And then—WHAM.
The number that jumped out? $885.79/month.
What the hell? What was this doing here? Was this an advertisement or what?
Nobody in their right mind would pay nearly $900 a month for just a $1 million term policy—unless they were terminally ill and had no other options. I certainly wouldn’t.
But dread began creeping in. What if I had been paying this all along?
I quickly logged into my Citi bank account, where USAA autopays are debited, to investigate.
Unnoticed Payment For Two Years
Here's what I discovered when I logged into my bank and searched for USAA. And let me tell you, it wasn't good.
To my horror, I had been paying over $800/month to USAA for at least 18 months straight. That’s as far back as my bank’s custom search would let me go.
My stomach sank. How could I be so careless?
Back in late 2022, I thought I told USAA I wasn’t willing to renew my 10-year term life policy when they quoted me ~$450/month—a drastic jump from my original $40/month rate.
So why, without my consent, did they charge me even more?
Since my original 10-year term policy with USAA expired in January 2023, I've paid over $20,000 in premiums to USAA despite thinking my policy had ended!
My whole point of getting a new 20-year, $750,000 term-life insurance policy through PolicyGenius in 2022 was so that I wouldn't have to pay the new $450/month rate USAA quoted me back in 2017. Oh my.
How Could I Have Missed Overpaying for So Long?
I’ve asked myself this question more than a dozen times. Here are five reasons:
- Bundled coverage: USAA handles multiple insurance lines for me—rental properties, auto, umbrella, valuable personal property—so when an $800+ charge hit, I didn’t think much of it.
- Inconsistent billing cycles with auto-debiting: USAA bills me monthly, semi-annually, and annually across different policies. Whenever I saw a large charge, I assumed it was for a quarterly umbrella renewal or something similar.
- Bad timing: Sometimes I didn’t see the charge at all. If I didn’t log into my bank that week, the transaction got buried by the time I checked.
- Blind trust: I trusted USAA to do the right thing. It never crossed my mind that they'd continue my 10-year term life policy and charge me 18X more per month than I’d been paying. I've been a loyal customer for 23 years.
- Cash flow cushion: I’m fortunate to have strong savings habits and solid cash flow. The $740–$885 monthly charge for over two years didn’t impact my spending behavior. I save first, spend later—but the downside is being less watchful with expenses.
Despite all this, I take responsibility. No one forced me to set up auto-debit. I should’ve been more diligent about reviewing my finances regularly.
Don’t Expect Your Insurance Carrier to Voluntarily Save You Money
Since 2020, I’ve had multiple conversations with my insurance provider about property, auto, and life coverage. Not once did a representative flag my life insurance policy or ask, “Whoa—are you sure you want to pay over $700 a month for this? Let’s see if there’s a more affordable option that fits your situation.”
Instead, I received periodic nudges—emails and calls—urging me to increase my property insurance coverage. That meant coordinating with a property assessor, letting them in, and ultimately paying more when the policy renewed.
Don’t be lulled into thinking your insurance company is actively looking out for your best financial interests. Their job is to protect you from risk, yes, but they’re also a business. Once you set up auto-debit, they can quietly raise premiums, and you might not even notice. At the end of the day, they have a fiduciary duty—not to you—but to their shareholders.
Is It Legal for Life Insurance to Automatically Renew Like This?
Some of you might have empathy and wonder if jacking up a customer's life insurance rate by 18 times or more is legal. Sadly, the answer seems to be yes.
If your original policy has a “guaranteed renewal” clause, and you don’t explicitly cancel, the insurance company can continue the coverage as an annually renewable term (ART) policy.
This means:
- You keep your coverage without new underwriting
- But the premium skyrockets every year as you age
Most people don’t realize this clause even exists. It’s often buried deep in the fine print. Therefore, another step for all of us is to thoroughly read the contract and ask questions about things you don't understand. Don't just trust your insurance carrier to do the right thing.
So technically, USAA didn’t break the law—but they sure didn’t do me any favors. The representative told me they have clients who pay these huge premiums because they simply can't get coverage elsewhere.
Many policyholders fall into this trap. They assume the policy just ends—or that premiums stay flat. Insurers bank on that assumption to make maximum profits.
What I Did to Try And Get A Refund
Not one to lie down and get trampled on back and forth by a 7-ton elephant, I decided to contest the charges. I thought I clearly told USAA in 2017-2019 I would not renew the policy at their quoted rate of $450/month. So I most certainly wouldn’t have agreed to $720/month in January 2023 and the most recent $886/month charges.
Here's what I did
1. Called USAA Immediately
Explained:
- I was not clearly notified of the shift from level term to annual renewable term (ART)
- I explicitly declined their renewal offer
- I only just discovered the $885.79/month charges
- I’m requesting a retroactive cancellation and full refund of premiums charged since the term expired
I used firm but respectful language, such as:
“I would never have agreed to continue coverage at this rate. I feel misled and would like a refund for all premiums charged after my level term expired.”
2. Escalate if Necessary Or Desired
If USAA doesn’t do anything, I have the option to file complaints with:
- My state’s insurance commissioner
- The Better Business Bureau (BBB)
- The Consumer Financial Protection Bureau (CFPB)
These agencies track complaints and put pressure on companies to resolve issues.
My Life Insurance Premium Refund Request
I understand I received coverage during the time I was paying premiums. Had I purchased a new 20-year term policy starting at age 45, I would’ve expected to pay around $150/month, or $1,800/year. I also recognize that if I had died during this period, USAA likely would have paid out the $1 million death benefit to my wife. Thankfully, I’m still alive—so here we are.
That said, I’m not asking for a full refund of the $20,000+ I paid. Instead, I believe a $16,000 refund is a fair compromise ($20,000 I paid minus the $4,000 I would have been willing to pay for two plus years).
No healthy 45-year-old male in 2023 would knowingly agree to pay $886/month for a $1 million term life policy. That’s not just overpriced—it’s highway robbery. I feel like USAA mugged me for my wallet and then slashed my tires on the way out.
How USAA Initially Responded
When I first called USAA to explain what had happened, the life insurance representative I spoke with was dismissive. She said there would be no refund and that the best she could do was cancel the policy. She claimed USAA had sent a notification about the renewal—one I never saw—and added that some members continue paying the exorbitant rate for whatever reason, which in her view justified the lack of follow-up.
After the call, I sat in silence for about 20 minutes, feeling defeated. Then I decided to call back—this time to request proof of where the notification had been sent. Because really, is a notification valid if the client never sees it or confirms their intent? I don’t think so. A default setting that quietly charges a customer 18X more without explicit confirmation feels predatory.
The second representative I reached was much more empathetic. She said she wouldn’t have paid that premium either. She explained that the notification had been sent to my online message center. Sure enough, when I scrolled back to November 2022, I finally found it.
Maybe an email alert had been sent to let me know there was a new message in my inbox—but if so, I missed it. Thankfully, this rep took my concerns seriously. She said she’d escalate the issue to her manager and the “Member Advocacy Team.” Hallelujah.
She assured me the advocacy team would do a thorough review, including listening to our recorded calls and examining the full account history.
The Feedback From USAA After Their Investigation
The representative from the Member Advocacy Team came back with an offer: a credit of two months' premiums totaling $1,771.58. It was a good first step, but still felt far short. I had hoped for a more reasonable compromise—something closer to a $16,000 credit.
Then the tone shifted. She noted that after reviewing call logs dating back to 2022, she didn’t hear me explicitly say I didn’t want to renew the policy. Instead, she claimed I was simply inquiring about my options. To me, that should’ve strengthened my case—why would I be asking about options if I intended to keep paying an exorbitant premium? But she disagreed.
So I encouraged her to dig deeper into their call logs, further back in time, to see if there was any record of me clearly expressing my unwillingness to pay a fortune for life insurance. She agreed and asked me to email any supporting information I could find in the meantime.
Evidence I Wasn’t Willing To Pay the Higher Premium
I searched my archives and found two articles I had written that clearly documented my struggle to find an affordable life insurance policy before my 10-year term was set to lapse. I sent both to USAA, complete with publication dates, to reinforce my position.
- “Convert Term Life Into Permanent Life Insurance To Keep Your Rate Class” – Published June 5, 2020
This post outlines how, after my son was born in 2017, I contacted USAA to explore extending my policy. After undergoing a medical exam, I was shocked to find my premium jump from $40/month to $450/month due to sleep apnea. I declined the offer, stating it was far too expensive, and made it clear I would search for a more affordable option. - “How I Finally Got An Affordable Life Insurance Policy With No Medical Exam” – Published December 21, 2021
This article details how, after years of searching, I finally secured a 20-year, $750,000 term policy through SBLI for $110/month. I noted that I was willing to carry both policies temporarily—doubling coverage for a year—while preparing to transition off the USAA plan.
These publicly documented posts show my intent and efforts to avoid high-cost life insurance by USAA and prove I never agreed to such a steep renewal. I could only hope they help USAA reevaluate their position.
Hard to Trust USAA With Our Insurance Needs Anymore
Unfortunately, USAA came back from further investigation and said the $1,771.58 credit was the best they could do. They were shutting the case. Ugh.
What’s most disappointing is that, after 23 years as a loyal USAA member, I truly believed the company would do right by me. I’ve consistently paid my premiums on time and have been a responsible, engaged customer.
Most people don’t fully understand the intricate details of life insurance policies, renewals, and their fine print. I did my best to stay informed, yet I still feel like I was misled and ultimately taken advantage of. Communication is not effective if the other side doesn't receive or acknowledge.
Without a more equitable resolution, it's hard for me to continue placing my trust in USAA.
The One Silver Lining From This Careless Debacle
If there’s any silver lining, it’s this: by sharing my story, I hope to prevent at least one person from falling into the same trap. Don’t assume your term life insurance policy ends when the term is up—it often doesn’t. Unless you actively cancel it, it may auto-renew, and the premiums can skyrocket.
All this time, I thought I was being a responsible father and husband—saving money and protecting my family in case I were to pass. In reality, I was a careless fool who failed to double-check his expenses.
As a result, I actually put my family in a more compromised position due to our reduced monthly cash flow. I had bought a house in 2023, which drained my liquidity and increased my stress for at least six months.
The first year after a home purchase is the most financially vulnerable time and I sure could have used that extra ~$800/month in life insurance premiums I didn't realize I was paying.
Tips to Save Money on Life Insurance Premiums
- Be loud and clear about your intentions on recorded calls—don’t assume anything will be understood or noted unless you say it explicitly.
- Review your expenses monthly. Don’t let auto-debits go unchecked. If something looks off, cancel or investigate immediately.
- Lock in a 30-year term life policy around age 30 while you're still young and likely healthier for the best rate. Your life will most likely get more complicated and expensive.
- Avoid unnecessary doctor visits right before applying for life insurance—they might uncover minor issues that raise your premium.
- Don’t expect your insurance carrier to proactively save you money. Their goal is to maximize profits, not look out for you.
- If you’ve had health issues, go on a health kick for at least six months—then reapply to try qualifying for a better rate.
- No matter how badly you fail, keep fighting to protect your family’s financial security. No one else will do it for you.
Going forward, I’m returning to my “broke mindset”—keeping my checking account lean, like a college student on minimum wage. Having extra cash flow felt nice, but for me, it bred complacency and laziness. That ends now.
As punishment for my carelessness, I’m committing to a strict no-spend challenge until I make up for the $14,228.42 in excessive life insurance premiums I paid ($20,000 total minus the $1,771.58 refund and the $4,000 I would’ve paid for 26 months of coverage). Alternatively, I’ll side hustle or make new investments to recoup the $14,228.42 in overcharges.
I’ve already spent hours fighting my case and writing this post, and I hope it helps you make better life insurance decisions. Now it’s time to move forward in the way only I know how.
Readers, have you ever gone through something similar with a life insurance policy—or any other product or service? Have you ever discovered you were paying for something you didn’t realize, thanks to auto-debiting or just plain oversight? If so, please share your story so I don’t feel like the only one who got duped by carelessness. Misery loves company—and maybe we can all learn a little from each other’s mistakes.
Life Insurance Policy Recommendation
If you have debt and dependents, getting life insurance is one of the most responsible financial moves you can make. I recommend checking out Policygenius, an insurance marketplace I’ve trusted for over 10 years. Simply enter your coverage needs, and Policygenius will match you with top-rated carriers offering competitive rates.
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What am I missing? Your networth is obviously many times a million dollar life insurance policy. It would seem you do not even need it.
Sure. I feel that if you die with a complicated net worth and still have debt, you want to minimize any type of drastic changes in your finances to ensure your family is stable. It’s already a traumatic time for your children and spouse. To have a life insurance policy that pays enough to cover all debts without needing to sell anything, and hold the family over for years is extremely valuable to them, and to my peace of mind.
Stability and continuity without having to change anything if I were to die. My Provider’s Clock ticks loudly, and knowing my family will be OK if I die prematurely is important. My wife doesn’t have a day job either. Does that make sense?
Did you not get life insurance despite having dependents? If so, how did you come to that decision? Did you already feel secure your children could fend for themselves when they were 5 and 8? Did you have a working or stay at home spouse?
Thanks for the perspective?
Wow, thanks for sharing this! As a parent of two young kids, this hits home. I’ve been procrastinating on reviewing our life insurance because it always feels overwhelming—and honestly, I just assumed auto-renewals meant everything was on track. But your story is a wake-up call that bundling everything with one provider and not checking the details can cost a lot.
Yes, it’s on us to stay on top of our policies, but let’s be honest—most people assume a term policy just ends when the term is up. At the very least, USAA should have gotten a verbal or written confirmation you are OK with paying 18X more a month. Just sending out one notice in an online inbox that wasnt opened isn’t enough. You should have them just check the records and see if you ever opened it before you did this year. And if you didn’t, that’s case closed you never received the message. I’m not sure why they didn’t send up any follow up emails or phone calls, but we know why. Profits.
I really appreciate how transparent you are about the $20K mistake. It’s the kind of lesson people only learn the hard way—or through posts like this. Going to double-check our policies this weekend and make sure we’re not overpaying or overinsured. Also going to set calendar reminders for any term renewals.
Thanks again—this probably just saved me thousands.
As a slight aside, has anyone noticed their homeowners insurance massively hiked this year? Mine went from 1,300 last year to 1,800 this year. 900k house in northern VA and no chances to the house since last year.
I have it bundled with Allstate and the Umbrella insurance also went up 30% this year.
Cursory review online and through ChatGPT indicated that what I am paying for each isn’t massively out of line, but typically my renewal had been about 5% rise annually, now this year 30+%
Yes, homeowners insurance has increased dramatically over the years as property prices have gone up and insurance companies pull out of certain markets due to natural disaster risks.
I have only been contacted ever by USAA to have an appraiser do an appraisal on my primary and rental properties so they can raise the rates. It has never been about trying to save me money.
I think this is a great lesson for us to remember that when we sign a contract, we cant expect to have it canceled without written confirmation from the company. If you request cancellation over the phone, please request and get at least an email from the company acknowledging the conversation and make sure their correspondence says “cancelled.”
“informing” them is no sufficient to cancel a written contract. Even when you do everything appropriately and they acknowledge it, things fall through the cracks even if they are no purposefully trying to cheat you. You must be able to go back with dated correspondence from the company and then you are ensured full reimbursement.
I recently cancelled my life policy and I had to sign a document for it to be cancelled, so I am surprised you were not asked to do the same. If you are not asked to sign a termination form, assume it will not be terminated.
One consideration to account for if you have minor children is the survivor benefit provided by social security. I am by no means a high earner but per my most recent social security statement my family (spouse and 2 minor children) would be eligible for total family benefits of $5,226 a month. Probably not enough to live entirely on (but possible if worst came to worst), but also something that is essentially “life insurance” for the family while the children are minors. My mother was able to attend college coming from a background of poverty thanks to the benefit and another family friend’s son was able to as well when the primary earner suddenly passed from a heart condition. Just a recommendation for everyone to check their social security statements annually and be aware of the benefits provided (I know DOGE and life insurance companies would rather you not be aware).
Great point, and thanks for sharing this valuable insight.
The Social Security survivor benefit is indeed an underappreciated form of life insurance for families with minor children. It’s easy to overlook, especially when we’re constantly being marketed to by life insurance companies that don’t benefit from people realizing what Social Security already provides.
$5,226 a month in survivor benefits can absolutely make a big difference for a family, especially when combined with a modest lifestyle or other sources of income. It won’t replace a high-income earner entirely, but it’s a meaningful safety net that should factor into any family’s financial planning.
Your recommendation to check Social Security statements annually is spot on. Too few people know how much their dependents are eligible for if something happens to them. This kind of awareness can lead to more tailored—and possibly lower—life insurance needs, saving families money in the long run.
Thanks again for raising this important point. I should write a follow-up post about it. It’s in the queue!
I am going to defend USAA and Insurance companies. I think in general we want insurance policies to auto-renewal. I think it would be far worse to be without coverage because a policy terminated. because it automatically canceled at the end of the term. This is not to say that USAA was without any fault but I do think auto-renewing the policy should be the defaults unless there is explicit cancelation. I have had policies that continued to get billed because I have failed to explicitly cancel and when I discovered that the insurance companies have typically refunded the payments, but these payments went on for 1 or 2 cycles – not two years. This is one reason I have all my payments annually because it’s much easier to track.
I’m glad you’re overpayments were fully refunded.
Auto renewal is fine if the price is reasonable. But I don’t think raising the price by 18 times is reasonable. I think that’s price gouging.
But you do give me a business idea if you think that is reasonable. It would just be a moral dilemma.
If businesses can find some way to take advantage of people like you who think that price increase is reasonable and charge accordingly, and not charge as much to those who think it is unreasonable, that would be optimal economics.
If 18X more is what you’d be willing to pay a month, what do you think would be the maximum you’d be willing to pay before you thought it was unreasonable? Perhaps 20X – 30X? Thanks for your feedback.
I’m a USAA member-30+ years. NO complaints.
How do you even qualify for USAA ??
Also I don’t like your previous descriptions of McLean HS-they are exaggerated.
The situation you describe is common. You have to explicitly state you are terminating the policy- either in writing or on a recorded line.
Also this is why I keep getting paper/snail mail notifications-hopefully to keep me from missing anything.
I also call USAA 1x a year to review all policies.
Thanks for comment. I was introduced to USAA by my father, who served in the Vietnam War. My grandfather served in World War II two. How about you or your relatives?
What does McLean high school have to do with life Insurance? Sometimes I like to drink Dr. Pepper, but Nike tennis shoes continue to be my favorite.
Good idea on getting paper statements mailed to you to help you review. Might have to consider that, despite the tree issue. Been over a decade since I got paper statements.
It is great that you have never had a problem with USAA and have never made a financial mistake. Congratulations to you.
State Farm did something similar with my bundle for two auto insurance policies, two homeowners policies, and an umbrella liability policy.
I gave one of the cars away and I was looking forward to saving some money on insurance, but I had to repay a discount, then the policy renewed and I was still paying about $420mo vs. about $375-$420 but when I had two cars.
I looked at the itemization and found State Farm had worked my car insurance up to $300mo for 1 car! I had paid it for a couple of months thinking that the rate increase was simply from the other policies, but those barely increased.
I switched most of my insurance to Erie and saved over half on the auto policy alone. Now I only pay State Farm about $100mo for two homeowners policies.
This whole situation with USAA is appalling. I cannot believe a company that markets itself as a trusted provider for service members and their families would resort to something so underhanded. Auto-renewing a term life insurance policy—without clear, proactive consent—and jacking up the premiums 18X? That’s not just sneaky, it’s predatory.
The entire point of term insurance is that it ends after a set period. For USAA to quietly convert it into some bloated, overpriced renewal is a complete betrayal of trust. And of course they know people who have multiple policies with them—home, auto, umbrella—aren’t going to comb through every line item every month. They’re counting on it. This feels like intentional design to extract more money from loyal customers.
Thanks for sharing this story. It’s a wake-up call to audit everything and never assume even the most reputable companies are looking out for you.
I’ll take it a step further as someone who worked in banking for 13 years, and has a graduate degree in media studies. Don’t get things advertised on TV. Talk to a human, be slow and precise. Wealthy people (I am one) are a cash cow on the Serengeti.
Clients not knowing and USAA getting to jack up rates to exorbitant levels is a feature, not a bug for profitability.
I’m sure the life insurance agent didn’t verbally warn or explain that the premium would rise by 18X if you did not verbally deny or write in.
Yes, USAA sends notifications. But if the notifications are not read or received by the client, that is not effective communication.
It’s similar to how regulations ban automatic opt-ins—customers must actively confirm, sometimes even twice, before being enrolled.
Tom Waits explained this a long time ago: The large print giveth, and the small print taketh away. It’s common to get screwed. It’s happened to us. Being opaque is the point for companies. How else do the blood-sucking lawyers get paid?
Sam,
I will take a slightly different view. Auto renewals have their issues and I have had the same thing you have but not quite to the same degree. In the end, it is up to you to track this item since it is so large and issue explicit written notice to them in sufficient time so the policy is not renewed. I don’t think USAA is blameless but truthfully neither are you. I would call back and ask for one more month if you haven’t done so already. It is the midpoint between what they and you want.
I also think you may have reached the point where you should have an insurance agent who handles all your policies and deals with an upscale clientele. I suspect you may be out of USAA’s comfort zone whereas another company would be just fine with your situation. An experienced agent may be able to increase coverage at the same or less cost.
Finally, I enjoy your writings. I find them on the mark and oftentimes they make me think and challenge my assumptions. Keep up the good work. Thanks.
Hi Chuck, You’re right—at the end of the day, the responsibility to track such a large policy ultimately falls on me. It’s my fault, and I’m doing something about it. I definitely should have followed up more diligently and issued a written and verbal notice, specifically about my desire not to pay 11X more in premiums, well in advance. Lesson learned the hard way. But hopefully, other people will benefit from my mistake.
I did call USAA and push for a compromise, and they granted a partial refund. It’s better than nothing.
Your suggestion about working with an insurance agent who specializes in more complex or higher-tier clients makes a lot of sense. For example, they don’t have umbrella policies for greater than $3 million, and had to refer me elsewhere.
Cheers
I agree, tracking our finances is up to us. I also have multiple insurance policies and exactly to avoid surprises, I consolidated all my insurance bills on the same date. So when the $10K+ bill in November comes, it is painful but last year it allowed me to discover that that they were trying to jack-up my auto premium by $2-3k, so I promptly switched and saved some cash. Consolidating the bills may be a suggestion for the future
I’ve noticed USAA service has gone downhill in recent years. A bit jarring for long time customers who remember what they were like in the past.
I have appreciated USAA’s customer service in the past. The company is in business school case studies about how great they were. It was interesting to get judged by the two agents on how I could miss the monthly payments for so long. But it’s true, I missed them, partially b/c I have so many policies with them where they charge different amounts at different times. And the payment amounts did change after 6-12 months.
It is what it is. Lesson learned!
Sorry this happened to you! If this can happen to someone as financially astute as you, can you imagine how many less informed or not as financially savvy people are getting fleeced? And probably with much less cushion.
Do you still plan to submit complaints? Given the roll back of CFPB, I wonder if they have the capacity to work through complaints. It’s in these cases I appreciate regulatory oversight. I once submitted a complaint to the FCC regarding my internet provider. I had tried to work with my provider directly, but they instead wasted hours of my time. I reached out to the FCC online and uploaded the chats (I had also called but didn’t have record of that) and within a week a real human person from the provider called me and we came up with a resolution.
What’s your process/routine for keeping track of bills to make sure you’re not overpaying, things are cancelled, no missed payments, etc?
Thanks. I waited over 45 days to publish this post because I wanted to let the emotions settle. I was also hopeful the “Customer Advocacy Team” who do more advocating on my behalf. But they didn’t.
As of now, I feel content accepting my mistake, writing this post to help others not make the same mistake, and no longer have to pay $880+/month in premiums for greater cash flow. I’m also motivated to save and invest more money to make up for my mistakes.
I am probably going to reach out to USAA one last time and ask them to review our recorded conversations circa 2017, when I first got the renewal notice for 11X higher premiums. They initially reviewed the conversations in 2022 and 2023, then I asked them to review 2020. They said they didn’t find anything explicit, just fact-finding.
So now I will ask them to review 2017-2019 conversations with their life insurance agents. It’s probably at most 4 calls. Based on the success of your FCC complaint, I’m going to follow up one last time.
My routine for expenses going forward is to go through them once a month! Everything has been on auto pilot for so long, that it’s now time to do an audit.
We have been a loyal customer of USAA for nearly 30 years. Similar to you had nearly all the eggs in one basket, but maybe even worse with multiple financial accounts with them (savings, checking, etc) as well. Recently had an awful experience with stopping CD from renewing at a lower term percentage. I called on what would have been by my account the 10th day of the 10 day grace period, by USAA account it was the 11th. Numerous frustrating calls, and help reachout from “customer advocacy team”. Each representative I escalated to was worse than the prior. After final nail in the coffin, I was denied the CD termination without paying the penalty. The differential in the interest over the remaining 12 months was going to be so great that it was worth cancelling. Proceeded to cancel and shift a significant CD in the 10s of thousands to an alternate service provider.
It was extremely frustrating experience with a company that based on your article does not look out for their members. All the more disheartening since so many of them are directly affiliated with military or connected. It was an eye opening experience in that regards and led me to make some drastic changes from the finance aspect and relationships I have with them. Once life settles, actively looking for a house right now, will reassess all the products we use with them.
I have also noticed a complete stagnation in their online presence, compared to other similar military affiliated web based banks such as Navy Fed. Time to shop around and put money to work elsewhere, at least where there is not such a sense of shaming of the customer as you described, and as I experienced on multiple occasions. I think they have gotten so big, that these individual losses to them will not really impact them. I hope others fill the gap that has been created by the degradation of a once great company.
Thanks for sharing your frustrating experience. The best thing we can do as consumers is shop around.
Few people take the time to compare insurance policies every 1–2 years. Insurance companies know this—and they love it. It’s up to us to optimize our finances, because an insurance company’s primary goal, like most corporations, is to make as much money as possible from the consumer. The more bundled you are as a client, the better it is for them.
I tried to reach a compromise, but they wouldn’t budge. Anyone reading my articles or listening to my recorded voice conversations with them—which they don’t share with me—would know I would never willingly agree to pay 18 times more per month in life insurance premiums.
Yeah, they ended up sending a notice in the online inbox. But without confirming acceptance, I don’t think that is right at a 18X higher rate. Lesson learned!
Oh man, so sorry to hear about that. What a rock that must have felt like in your stomach. Try not to beat yourself up about it. We are all human and seriously we all make mistakes. And frankly USAA’s actions are very shady and disappointing. Who the heck has ever heard of an auto-renewing term policy after it expires especially one at exorbitant rates? Nobody! The whole point of term life insurance is that it’s for a set term and then it’s done. Why would it autorenew?! So sneaky, sheesh.
I also totally understand how this would be hard to miss because you’re paying them for so many other things for home, auto, etc. That’s very hard to keep track. And who knows, this could be the main reason why they have that sneaky auto renew – they may intentionally try and get more money out of people who have multiple lines of products with them because it IS so hard to track.
This reminds me of Amazon, which I need to be more careful about. I use them for everything from groceries to office supplies, monthly subscriptions, household supplies, clothes, etc. They could easily overcharge me for years on end and I would probably have no idea because I have so many transactions from them each month. One of the main reasons is they charge when each item ships, not by an order’s actual total, so it’s very hard to track which charges are for what on my credit card.
Auto payments are great for convenience but very tricky for overspending. I can’t count the times I’ve missed canceling a service by one day (even after setting myself reminders) and not been able to get the charges reversed. And don’t even get me started on how much money my mother has been scammed out of. She’s fallen for them all – online, over the phone, and in person.
As much as making money mistakes sucks, at least they serve us all as good wake up calls to tighten up and more closely watch our expenses, increase our organization, motivates us to simplify things, and help others avoid falling into the same traps. Thanks for keeping it real.
Thank you so much for this incredibly kind and understanding message. It really helps ease the sting of the mistake. You’re right—it was a rock in the stomach kind of moment, and reading your words reminds me I’m not alone in feeling duped or overwhelmed sometimes.
Your Amazon analogy is spot on too. When there are so many transactions flying through each month, it’s way too easy for small charges (or big ones) to sneak by unnoticed. Convenience comes at a cost—literally. Selling gift cards and counting on the recipient or the buyer to not use them before they expire is also another lucrative business model.
And I’m so sorry to hear about your mom’s experiences too. It’s frustrating how much these systems rely on people being too busy or trusting. Scammer is also pray on the elderly because they are more trusting and easier to dupe. These screwups do wake us up. They’re painful, but they push us to get sharper and help others stay alert too. I appreciate you sharing all of this—and for the reminder to keep watching the details.
Hi Sam. Thanks for sharing this story – it’s a costly mistake, no doubt. But here’s my silver lining: it shows you can afford to spend more.
You’ve been overspending by over $800/month for quite a while, and you didn’t even notice. That tells me your financial foundation is incredibly solid. You have the net worth, the cash reserves, and the income to absorb a $20k mistake without it even registering. That’s not just financial stability – that’s financial abundance.
To me, this suggests you can afford the things you’re unsure about. I know your takeaway is to keep less cash in checking, but I see it differently. Personally, I keep $50k more cash in my checking than I need – not because it’s the most efficient use of money, but because it makes me feel good. Yes, I’m giving up about $2,500/year in risk-free interest by not putting that extra $50k into T-Bills. But the joy I get from seeing extra $50k in my checking? Totally worth it.
If you feel better maximizing every dollar, that’s great – keep your checking lean and invest the rest. But this mistake proves your cash flow is so strong that you can afford to prioritize comfort and joy, too.
So here’s my pitch: go for the $20k/month rental in Hawaii next year. Just for one month – nothing crazy. Don’t stay with your folks – invite them to visit you. You’ve earned that freedom. You’re a responsible parent, you’ve got 529s, you’re teaching your kids good habits. You’re doing everything right.
When the time comes, you can’t take your money with you. The Grim Reaper will take it all. Spend it now, while it can still bring you joy.
Thanks for your thoughts Yury. Both USAA agents were incredulous when I was making my case how I wasn’t aware that I had been paying -~$800/month for 26 months. And I can understand that. I’m thankful they didn’t say or strongly imply that I was lying, as that would really piss me off.
Life gets in the way. We are busy raising our children, working jobs. We might not like, building businesses, and working on side projects. To implicitly trust that my calls from the past made it obvious that I didn’t want to renew a policy that I didn’t know it was an auto renewal is my mistake. One needs to be explicit and frankly, not put full faith in any financial institution to do the right thing.
It just pisses me off because if a consulting client or someone who bought my book, How To Engineer Your Layoff, paid me double by mistake, let alone 11-18X more, I would instantly contact the person and ask them if this was their intention. And if they didn’t ask, I would just refund them the overage.
So why would an individual do the right thing, but not a big corporation, who also has “customer advocacy teams.” That’s capitalism I guess.
Unfortunately, the rental house is not $20,000 a month, but $24,000 a month. I like to pay for my mistakes, always. So there is definitely no way I’ll be rewarding myself with a rental property I don’t need after committing such an egregious mistake.
Atoning for my mistake will help my soul heal. So I will make the most of the situation and fight on!
Sorry for your troubles. I hope you get a good resolution. At what point do you consider yourselves self-insured? Maybe I’ll get reamed for this, but since my spouse is a higher earner, our kids’ 529 plans are fully funded, and I would leave behind enough relatively liquid assets to pay off our mortgage and then some, I don’t have life insurance, and haven’t for some time.
Probably when your kids are adults and you no longer have any debt.
I wanna have life insurance so that if I die, there is no urgency to sell off assets at the wrong time or do anything frankly because the death benefit will keep the stability going.
It is already disruptive if your parent dies. But then have to figure out the finances is another layer of complexity.
My term life insurance policy doesn’t come close to covering our net worth, and it shouldn’t need to. I’m just covering for our debt and then some. But frankly, after I sold our previous house and reduced our debt by over $1 million, my life insurance policy is a little too much now.
How old are your kids and how much debt do you have?
My kids are still young (elementary and middle school) and we do have a fair amount of mortgage debt, but it’s low relative to what my spouse earns. I think my spouse would elect to continue to work and to carry debt regardless of a life insurance benefit. If we both die, we have enough cash equivalents to hold things over while our executor sells assets for the kids. It just feels unnecessary to me to carry life insurance under our circumstances, but I did when I had less of an estate.
Do you have a human USAA agent you work with? This is one reason why I don’t like shopping around online for things like insurance. Even if a brick and mortar agent might cost more, at least we have an extra layer of advocacy and accountability. And presumably the agent makes some commission, so the threat of pulling multiple insurance products carries more weight.
Yes, spoke to many human USAA life insurance agents over the years. Each post I wrote that i included in this article on proof that I didn’t want to pay 11-18X more in monthly premiums was written after talking to a human USAA life insurance agent.
But you spoke to multiple agents over time. Sounds like they don’t, and didn’t care, so they are not very good “agents.” Simply authorized to process your payment. This is a danger zone, IMO, particularly when you are on the hook for the integrity of the outcome.
Agree. So who do you use? Would love to get some solutions. thanks
We use State Farm, but that’s largely a function of living in central IL. I’m not pitching them, specifically. But we work with one agent for home, auto, umbrella. In your case talking to multiple agents, I think there was a regrettable communication breakdown.
Thank you so much, Sam. Not only for the intricacies I didn’t know about with insurance (selfishly, im usaa and now know more at your literal expense!), but the honesty of your personal shortfall to us all. Keeping your pledge of transparency in the good and bad times helps so much. Ty!
No problem. Thanks for reading and I hope the article has motivated you to be more careful with your expenses. It certainly has motivated me.
Sam, I know you feel terrible about this and not to be a jerk and pile on. So this statement is made with nothing but love. You miss too much stuff, capital calls this insurance . That’s a big chunk of change and even a monthly charge of that size should have been setting off alarm bells. You need to dial it in. Thanks for being honest !!
Indeed. At least with the missed capital calls, there was no financial penalty.
How do you manage all your financial accounts? And have you ever made any financial mistakes before?
Related post: https://www.financialsamurai.com/how-to-better-manage-a-complicated-net-worth/
I have a hand written budget book then I transfer it to a spread sheet at the end of the month. I date everything I sign up for because I got burned a couple of times. The good news for you is you now have $800 extra a month !
That is great discipline and diligence! I have Long since automated my finances, which is now showing up as a Folly and big warning sign if one is too hands off.
And yes, even though I did not experience the pain of having $800 a month less cash flow, I now appreciate having $800 more a month in cash flow because I know of the figure. Funny how that is isn’t it?
I avoid pre authorized withdrawal agreements and use a separate bank account if it’s the only way. This account carries a very low balance and isn’t tied to my other main banking. This way I can easily shut down the account if there are issues with the agreement and it forces me to monitor to make sure I transfer enough funds to cover.
Sounds like a sound plan!
Wow. I track every penny with Quicken, downloading from my credit cards and bank accounts every day, so I would have seen this. I also save my yearly insurance statements in a Dropbox folder for each year’s finances.
The only mistake I have made is one year I paid my premium twice. So I didn’t have to pay the following year. And this year, when I switched from Bill Pay to automatic draft, I forgot to cancel the Bill Pay. They ended up returning it / not accepting the payment, which worked out.
I took out my first life insurance policy on my wife when we first got married 17 years ago, $500,000, 30 years. Then a financial advisor recommended adding another half a million. Unfortunately she had just started seeing a doctor for an unknown neurological condition and for this second policy, they decided to pull medical records. So no policy. And 17 years later, still no diagnosis and she now uses a power wheelchair and has significant difficulties. But to toot my horn, for one job she had later, full time, we paid for a long term disability policy. No underwriting since employer based. I made her stick out a year even though she wanted to quit, since that prevented pre-existing condition look back. She’s now been on disability for 10 years and it’s nice to get those payments.
Great article – thanks for sharing, Sam. Humbling to honestly share mistakes , but it’s so valuable for us to read.
I’m in my 40s and my 20 year USAA term life policy will be up in the next 3-4 years. I definitely need to do a review on my policy as well. Like you, we also have lots of different insurance with USAA with the different payment timelines, so I can image this is something I would easily miss on my account too. You may have just saved me thousands of dollars. Thank you, Sam!
Great! The audit of your insurance expenses will be good for your finances. I’m not sure how many people know that term policies keep going at a much higher rate.
I’m just disappointed because after all those conversations I had with USAA life insurance agents to figure out alternatives to my policy, they still charged me. Oh well. Be explicit as possible. All the lines are recorded.
Thank you for this article. We have a 20 year term policy that will “expire” in 4 years. I looked at it at the end of last year and saw the exorbitant post 20 year rates, which we would not ever agree to. But I did not look to see if it is a self renewing policy and if I need to cancel. Will be looking today and updating my tracking records. You may have saved my family!!!
Awesome! When you get on the phone with the USAA life insurance agent, explicitly say “I do not want to pay the higher rate upon renewal, and I would like to find a more affordable alternative. Again, I do not want to renew at the higher rate.” Then jot down in your notes or in a spreadsheet when you had the call and what you said.
Good luck!
Wow, I can’t believe the first agent at USAA told you with a straight face that paying $800/month was normal and there was nothing they could do. They can always do something.
I had no idea a term policy automatically renews for a higher rate after the term expires, either. Insurance companies must love this auto-renewal, just like auto-debiting to gouge their customers.
Not a good look by USAA, especially to a long-time consumer.
Thanks for sharing your saga!
Yes, I was disappointed that they listened to the call logs and came to the conclusion that I was OK with paying an 11 times higher rate. Oh man, if those call logs went public, I would say there’s no way the majority would think that I would be willing to pay that much higher a rate.
I need to ask them to investigate the call logs from 2017. That was when I first found out about the much higher rate, and I’m pretty sure there’s no way I would say yes that is a great rate.
Thanks for sharing mistakes you’ve made. The internet is full of should dos and must dos with little explanation of the lessons learned to arrive at those conclusions.