The transaction is expected to be completed by the end of the year.
Ageas Protect was launched in the UK in July 2008 and now has a 4.8% share in the total UK individual protection market, according to the company.
We have a strong presence and close relationships with our IFAs...and that will most definitely continue
Last year it contributed £92m to Ageas UK's total income of £2.1bn, but returned a loss of £1.8m.
Belgium company Ageas' UK business is primarily non-life, with significant positions in the general insurance market.
The focus for Ageas in the UK is to continue to develop these non-life positions in line with its strategy, the company said.
Ageas UK chief executive Andy Watson (pictured) said of the deal: "Ageas Protect has developed into a great company, with a strong reputation for service and innovative products.
"Much of that is down to the incredible hard work and vision of the whole Ageas Protect team, creating a well respected proposition in the UK Individual Protection market.
"It was a tough decision for us but ultimately, our main focus in the UK is in developing our businesses in the non-life market where we have considerable scale and hold significant market positions.
"We know that Ageas Protect employees are going to a good home where they can further develop the business."
Ageas Protect managing director Darren Spriggs added:"We have a strong presence and close relationships with our IFAs, partners, customers and suppliers based on the delivery of award-winning service, systems and processes and that delivery will most definitely continue.
"Ageas has supported us all the way through our growth but we all feel that now is the right time to move to the next stage of our development and we are really excited about the opportunities AIG will create for us."