DES MOINES, Iowa (AP) _ Officials of AID Insurance Co. have announced that the company's name will be changed to avoid association with the deadly disease AIDS.

The Des Moines-based property insuror had used the name since 1968, long before acquired immune deficiency syndrome was discovered.

''It was a good word - aid, help assistance,'' said John Evans, the company president. ''Now people are ashamed of it. We owe it to ourselves to change it.''

AID Insurance is offering $5,000 to the employee who comes up with the best new name by Oct. 28. Evans said he hopes to have the name changed in six months.

''Oh God, it will be expensive,'' he said. ''It's more than just changing the name in the phone book.''

AID Insurance does business in 14 states, mostly in Iowa and states to the west. AID and its related companies did $183 million in business in 1984, according to company treasurer Jim Shaffer.

The disease AIDS is a crippling of the body's immune system that most often has struck homosexuals and intravenous drug users.

''If that little scientist had found another way to name this terrible malady, we'd be fine,'' Evans said. ''Why 'acquired?' Why not say 'newly gained?' ''

AID Insurance took its name when parent company Allied Mutual Insurance Co. decided to bring its subsidiaries under one name.

Lately, the company has had ''letters from policyholders asking, 'What is this company? Do you have any affiliation with AIDS virus?' '' said Steve Biggi, regional vice president for AID's Santa Rosa, Calif., office, which is 50 miles from San Francisco and its large homosexual population.

''We'd get snickers,'' Biggi said. ''We'd have agency meetings, and walk into hotels where they'd have signs saying 'AIDS meeting, room so-and-so.' I'd have to go over and take that 'S' off.''

''If that little scientist had found another way to name this terrible malady, we'd be fine,'' Evans said. ''Why 'acquired?' Why not say 'newly gained?' ''