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 2022. 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 Plus 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 2017 and 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 years and two months).
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 said me paying the monthly raised premium was proof I approved of it. She also 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. My other article on warning readers not to see a doctor before locking down an affordable term life insurance policy also explained how I wasn't willing to pay the jacked up new premium.
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.
I have two final avenues of hope to pursue before giving up on securing a larger refund:
- Request that USAA review the call logs from 2016 to 2020 to confirm there was no explicit approval or confirmation from me regarding the policy renewal.
- Make the case that because I never opened the internal message in their system until 2025, I never actually received the notice about the auto-renewal of my expiring term life policy. Without receipt or acknowledgment, there was no informed consent. After all, communication is only effective if the intended party actually receives and understands the message.
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. Ask to get paper statements and electronic statements. This way, you minimize your chances of missing a bill if you receive many e-mails and have many accounts.
- 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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I do it the old fashioned way. The insurance company mails a bill and I pay by check. I don’t do any auto payments because I don’t want anyone else to have my checking account number.
I also have an independent insurance agent that can shop for different policies with different companies.
Wow! This article touched a hot wire out there. So sorry to hear your story, Sam.
I’ve been a USAA member for over 50 years and concur with the impression that they seem to be morphing from an incredibly customer oriented company into something more hard edged and profit oriented. While I don’t qualify for term life insurance (due to health issues), I do pay for home, cars and personal property insurance with them. And I too was shocked by the huge increase this year in my home insurance premium. But, enough has been said about all that.
I’d like comment that having read your article and most of the very thoughtful responses it generated, I did NOT see a single comment from you about what you plan to do looking forward to avoid any more situations like this one. All of your comments seem to be about accepting and recovering from the financial hit and accompanying embarrassment.
I think sharing your story has been really useful. But, what I don’t hear is how you are going to correct the source of missing the monthly charges for so long. Yes, you mentioned how the $800+/mo. got buried in your other bundled USAA payments. Really? I’m trying to imagine this. All I can picture is someone not actually reading the monthly invoices. USAA breaks down multi-policy payments quite clearly. Or do you not have some kind of disciplined budget vs. actual tracking process that would flag a big increase in insurance payments?
So, I don’t mean to wag a finger at you, but I just don’t get it. I’m assuming you must use some kind of personal finance software. I can only imagine that you were not breaking down the total monthly payments to the various policies. I think it’s important to ask… What you are going to DO (or have done) to address the source of the mistake to avoid such a calamity in the future?
I too have made painful financial mistakes. And I started using personal finance software over 25 years ago to track my fairly complicated personal finances. There is no way my bundled monthly USAA insurance payments can escape my attention. They send routine email alerts about upcoming payments due and text confirmations when they are paid. I habitually download, review and store PDF copies of their invoices. I allocate the monthly payments across the 5 policies I pay for. Yes, it takes time to track personal finances. The benefit is… I no longer get big surprises.
Hi Mac – Thanks for your comment. I’m glad you’ve been able to go 50 years with them without any issues—impressive track record.
As I mentioned in the post, I’ll be carefully reviewing my finances on a monthly basis moving forward. Based on a helpful reader suggestion, I’ve also requested paper statements to ensure I don’t miss anything important. I probably receive far more emails than the average person, especially since I run a site, and I manage multiple email accounts. Having physical mail should make it easier to stay organized and on top of things.
I’ll go back and re-emphasize the key action items I recommend in the post. If you missed them, chances are others have too—and that defeats the purpose of sharing my experience to help others avoid similar mistakes.
Here’s what I wrote in my post. Let me know what else you think I should add to help others:
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. Ask to get paper statements and electronic statements. This way, you minimize your chances of missing a bill if you receive many e-mails and have many accounts.
* 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.
Sam
When I add up all of our insurance needs for the course of the year it is a pretty large expense. I am not even including health. Just the insurance that protects our assets and financial security. Home, auto, umbrella, business and life. I do a review of my insurance coverage every year just like I review the portfolio for asset allocation and is it on track to meet our financial plan and of course cost effective. Things I have learned:
Life insurance: Got a term policy when I was 30 with a fixed rate, 30 year but also able to convert to a whole life policy without a medical examination. This gave me the coverage I needed for financial security. I decided to convert to a whole life policy for estate and retirement planning. Having a convertible policy provides a lot flexibility. I found mutual life companies provide better options and pricing, this is their prime business. Unlike the other insurance needs once I purchased life insurance changing companies provided no benefit. I have added policies to get more coverage and again provide a tiered approach to flexibility. Essentially it is now like a tax free bond in the portfolio. This may not be for everyone but it worked for me.
I bundle home, auto, umbrella and business insurance with one carrier. This gives me seamless coverage with one company. The umbrella I adjust based on the portfolio. I have found two things bundling these services reduces cost and adds value. I need to test the market every year and it seems like I change carriers between 5-7 years as “premium creep” occurs.
The difference I found is with the right mutual life insurance company it is like working with a financial advisor. They help you build insurance around protecting your family, your assets and estate planning. This is a long view.
Dealing with a home/auto/umbrella/business company is more transactional. Nothing long term I am buying insurance getting the coverage I need at the best rate with a reputable company. Now some are easier to deal with than others but at the end of the day if you have a claim its game on!
My home insurance surged 45% this renewal. Progressive was unable to state why besides market rates had increases. So I shopped around USAA was able to reduce my rate by 20% of last year’s premium.
It pays to shop. I auto pay but have documentation physically mailed. I find it’s a good mix. Plus I always put on the calendar 1 month before renewal to review.
I also have a separate email address for all my insurance, mortgage, and bank communications. Keeps emails from getting lost and reduces fraud.
Great tips, thank you!
All I can say is that your first mistake was using USAA. They are truly horrible. And the really sad part is that the victims of their predatory practices are veterans and their families – people who should receive the best not the worst. Find new insurance across the board and drop them immediately.
The same thing happened to my husband – when his 10 year term life insurance ended around age 54, USAA’s life insurance jumped from about $60 a month to over $800 a month. They didn’t even notify us by email! The sneaky buggers! We cancelled within hours of me discovering the new charges, and because he only held that policy for under a month, he got fully reimbursed. But if it wasn’t for me diligently checking all of our accounts every month, we would have missed this, since he’s not as diligent at tracking his finances. You’re 100% right to call USAA “predatory” and I hope their CEO or PR department sees this article. (If I can suggest you send them this.). And while you’re at it, google USAA and their recent fraud allegations over the past several years. USAA is not what it once was 20+ years ago.
Which reminds me, we’re paying a huge amount for car and home insurance with USAA and I’m going to shop around this week.
And finally, stop beating yourself up! $16,000 is what percentage of your net worth? This is not something you’re not going to recover from. AND, it’s happened to others, so you’re not alone.
As a subscriber to USAA for over 40 years (retired USAF), I’ve seen a notable drop in customer service over the past 3-4 years (getting bounced around from agent to agent, getting misinformation, etc..) The auto rates are being beaten by multiple companies. Several years ago, I noticed that USAA had unilaterally raised the home replacement cost in my homeowner’s insurance from $450K to $875K. I had no idea, but thankfully (!) only paid the increased premium for one payment before I noticed this. As noted, they were resistant to any refund. I’m essentially done with USAA, except for a renter’s policy.
Sorry Sam – that’s a bummer. I’ve missed a (fraudulent) recurring payment before, and even though it was a smaller amount, I still felt both violated by the theft and that I’d failed my family by not paying more attention. In my case, even though it was plainly fraud, it still took quite a push to get the bank to refund a percentage of it. After that, I started reviewing all payments monthly to ensure nothing looks funky because the bank certainly wasn’t watching my back.
When I ride my bike in the city, I try to stay safe by telling myself everyone is trying to kill me. When I deal with insurance companies, I try to protect my money by telling myself they are trying to rob me. My wife and I were just digging into our insurance policies again this week and it may be time to shop around again….
That is just gut wrenching. I felt terrible reading it. We have all made mistakes that costs us money. We tend to dwell on those few bad mistakes and not the many good money choices we have made. But as you often say, look on the bright side. You now have over $800 a month in extra cash flow.
Thanks Jeff. Nothing else I can do but make the best of a suboptimal situation, warn others, and keep fighting. Now that I have more free time, I will keep pushing! No downside in continuing to try.
Sam,
You may still want to have a conversation with your state insurance commissioner about whether USAA actually provided you proper legal notice to activate the annual renewable term policy. I used to be a life insurance agent. I would be flabbergasted if that single email message to your USAA inbox would satisfy the requirement.
I’m also a USAA member, and their insurance side of the house has gone down the toilet. I had USAA auto insurance for 32 years, and dropped them this year because their rates jumped to an insane level (over $20k for four cars and two teenage drivers). I switched to Amica and cut it nearly in half.
My point is that while USAA doesn’t cross the line into “shady” stuff, they certainly appear to put their toes up to the line and lean over it.
Thanks Mark. Now that I have time to breathe with the heart of my book marketing over, I probably will. I have two last pieces of hope, which I’ve recently added at the end of this post:
1) Request that USAA review the call logs from 2016 to 2020 to confirm there was no explicit approval or confirmation from me regarding the policy renewal. They just went back to 2022, but I realized I got my sleep study done in 2017 and around then is when I called and heard of the $450/month 11X higher renewal, which I’m certain I would have expressed shock and disinterest.
2) Make the case that because I never opened the internal message in their system until 2025, I never actually received the notice about the auto-renewal of my expiring term life policy. Without receipt or acknowledgment, there was no informed consent. After all, communication is only effective if the intended party actually receives and understands the message.
And then offer to write an update to this post about how we came to a compromise. I’m not asking for all the premiums I paid back b/c they provided coverage and I am clearly also at fault. Just a compromise of the premiums I paid minus a reasonable price of the premiums I paid to get 24 months of additional life insurance coverage. Let’s be reasonable. 18-22X higher a month is unreasonable.
Let’s see what happens! I just left a message to Karen from USAA. I still have some hope progress will be made.
You might have the best luck just asking for all of CY 2025 to be refunded.
I did with the two months I paid. But I no longer have a USAA life insurance policy. Not sure if they want to discount me for one of the numerous other policies I have with them.
Paper statements + auto-debiting is now the plan.
Sorry, this happened to you. I used USAA for my car insurance for years once I got out the Marines, they were always good with customer service. However, after 10 years or so, I noticed the premiums started getting higher and higher, i shopped around and went with geico, and have been with geico ever since.
Wow- can’t thank you enough for all of your sharing opportunities. I have two things to share. We purchased a newly constructed home in 1988 and kept the same home insurance carrier, ALLSTATE for the new one.
It wasn’t until 2010 I discovered the square footage they were using was higher than it should have been. No refunds. Just moved forward. Although it was “only” a difference of 200 sq. ft., we overpaid for quite some time. Everyone should check their policies.
With regard to USAA car insurance, I had an aunt who had coverage and she was elderly and driving two relatives who were visiting when she accidentally hit the gas pedal and caused serious injury to my brother and sister-in- law. Long story short.
USAA may be good to policyholders, but they fought hard against paying for hospital/ doctor bills. A lawsuit was needed just to get the bills paid. It was crazy. I would never use them even if I could.
I forgot to add, everyone should confirm with their homeowners insurance that they are making use of any/all discounts. Allstate didn’t tell us about the senior discount for our car policy, so we missed out for years to the tune of $250 yearly. Companies have other discounts also and I just read that some have lower premiums if you have a higher FICO score. I’m checking with Allstate tomorrow.
I’m a strong consumer advocate- have been for decades- as I had been in charge of all constituent issues in a legislative office for years. I continue helping where I can through the NextDoor social app in my local area.
Thank you so much for your financial advocacy- it is INVALUABLE and thank your family, too.
Sorry to hear you ended up paying so much in unnecessary premiums. I download all data from all of our bank and credit card accounts each month and go through it in detail. It doesn’t take that long to do that. I spend more time on tracking then different spending categories, which gives me an idea where we could save money or spend more etc. I think the first step is necessary to make sure you aren’t paying anything you didn’t intend to.
Very diligent of you. I will do an audit once every 6 months from now on. Putting finances on autopilot has helped simplify, reduce mental load, and build wealth over the years.
But clearly there are downsides as this post has shown.
I’m impressed nobody has shared that they have ever made a similar mistake.
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.
Yes, home insurance has gone up this year; car insurance, too. I have USAA for both and am also in NoVA, in a townhouse. I’m planning on going into AAA this week to ask them about life and car insurance as I’ve had enough of USAA. It was natural to have USAA when we were assigned overseas but we’ll be done soon.
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 left USAA a decade ago for this very reason. They serve their mass-market (active/retired military and their families) reasonably well (note I did not say *fairly* well). You should find a “Private Client” agency who serves clients in your economic tier, often with a team, to cover home(s), auto(s), boat(s), umbrella, even business liability – a 1-stop shop. Such an agency likely works with AIG, Chubb, Pure or Vault. These carriers choose high-net worth clients for a reason and cater to them. Once I found such an agency my insurance headaches vanished and coverage improved.
Good suggestion David. Getting affordable homeowner’s insurance is also getting challenge. So maybe I will do just that.
One of the #1 reasons why insurance marketplace platforms like Policygenius was able to grow is because they recognized consumers DO NOT shop around for insurance policies regularly enough. As a result, consumers end up paying for more in insurance premiums than they should.
The case in point was my wife’s USAA life insurance policy, which was 40% more a month until she shopped around and found a new carrier. For 7 years, we thought my wife was getting the best rate because it was USAA. And why wouldn’t USAA provide the best rate for military families and their progeny? But we were wrong.
Shop around folks!
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!