“People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.”
Disclosure: USAA flew me to San Antonio for a three day conference from November 6-8, 2013, put me up in a hotel room, and fed me all on their dime.
One more disclosure: I’d have written this anyway. I see too many people missing out on eligibility opportunities to not write about the topic.
When I was a plebe at West Point, we earned something like $60 dollars a month. Mom and Dad sent me a few bucks here and there for Boodler’s runs, but I didn’t really need the money. Aside from weekends at Ike Hall where a bunch of us would go, buy pizza and Cokes, dance, and try to avoid yearlings while looking as attractive as possible for the college girls that the Cadet Hostess bussed in from local colleges (impossible to do as a plebe), I had nothing to spend money on.
In my second semester, my roommate asked me if I knew what USAA was. I had no idea. He explained that they were an insurance company and a credit card company that only served military officers and Academy cadets. If I wanted to establish credit, I could get a credit card through them.
I called and joined. 21 years later, I’m still a happy member.
What is USAA?
Started as an automobile insurance cooperative between military officer friends a long time ago, USAA has grown into an enormous financial services membership organization still dedicated to serving the military and those who are associated with the military. USAA covers darn near every aspect of your financial life, from insurance to banking and credit cards to retirement products. In the second and third articles of this series, I’ll cover what I like and what I don’t like about USAA, but for now, suffice it to say that if you wanted to incorporate all of your financial life with USAA, you could.
As I mentioned, when I joined in 1992, eligibility was limited to officers in the military and those who were in a program to become commissioned officers.
At some point in the late 90s, they opened up to non-commissioned officers, and shortly after that, to enlisted service members.
Since then, they’ve opened up the gates again. Now, to be eligible, according to their website:
- Active, retired and honorably separated officers and enlisted personnel of the U.S. military.
- Officer candidates in commissioning programs (Academy, ROTC, OCS/OTS).
- Adult children whose eligible parents have or had a USAA auto or property insurance product.*
- Widows and widowers of USAA members who have or had a USAA auto or property insurance policy.
- *Children must be 18 years or older to be eligible for USAA membership and purchase products in their own name. Children under the age of 18 can be listed as family members on their eligible parents’ auto policies.
Two routes to USAA
You can take part in USAA products even if you don’t qualify for membership. You can still use the investment services that USAA offers, you can purchase life insurance from USAA, and you’re eligible to use their discounts (which I’ll cover in the next article); however, if you don’t qualify for membership, you’re not eligible for the auto, property, and other insurance products, and you cannot use the banking products. The bank and the credit cards are awesome, as we’ll see in the second part of this series, but the insurance products are what make USAA special.
If possible, you want to be a full member. Full membership means that you meet the criteria above and you hold some sort of insurance product with the company. You also are eligible for the member discounts and member distributions. While USAA is a for-profit organization, it occasionally distributes its profits amongst its members. To get the distributions, you must hold at least one auto or property policy. How much you get is a function of how much the board decides to distribute and how much business you do with USAA. It’s a nice perk, but it’s a perk.
Direct lineage counts
We have generations of people who are eligible for USAA who probably don’t realize it. From WWII vets through Korea and Vietnam to the Persian Gulf and Afghanistan, we’ve had generations of military service.
If you’re not a veteran or active duty but your parents or grandparents are, ask them if they’re members. If not, encourage them to sign up. If it’s your grandparents, then you’ll have to have your parents sign up so that you can sign up.
Of course, you want them to sign up only if they can get better insurance rates than they currently receive. From what I’ve seen, chances are good that they can get better rates.
In a sense, USAA is like the Mafia. Once you’re in, you’re in.
When I’ve spoken about insurance rates to agents, I usually get a pretty stock answer about USAA:
You’re with USAA? I rarely beat them.
I think it’s telling that Progressive doesn’t even compare rates to USAA.
If you’re eligible for USAA, you should investigate joining. If you’re not, but your parents or grandparents were, it’s worth having a discussion with them. They will probably benefit, and they can pass on the membership eligibility to you. You’ll probably benefit as well.
Are you a USAA member? What’s your experience with them been like? Let’s talk about it in the comments below!