If you have people that rely on your income then life insurance HAS to be part of your financial plan.
I ran into a couple who had four children. Their insurance agent had talked to them about getting a life insurance policy, but they had declined because the husband had $150,000 policy through his employer which was about one year of his salary.
About a year later he was diagnosed with stage four cancer and, as a result of the treatments, ended up not being able to continue in his job.
Now they have a situation where he is not able to work and if he does not recover his spouse will be left with four children and no insurance payout since the policy they did have was contingent on him keeping his job.
Even though the man is still alive, this is a heartbreaking story because his family is on the verge of financial ruin if he does not win this fight.
What we can all learn from it is that if people are depending on your income you need a life insurance policy [Tweet This] that is not connected to your employment with a company that has a good reputation.
The question I tend to get next is, “How do I know which company is the best one?” My answer is always the same. The best life insurance company is the one that insures you for the coverage amount you need, at the best premium, and will pay out if something were to happen to you.
Life Insurance Companies That Pay Out
While it is natural to be cautious with picking a company that holds your families financial health in its hand,
The truth is, that insurance companies RARELY fail. It would be difficult to document even a single example of a company that failed to pay a death benefit.
When people purchase life insurance, they often look for the best life insurance companies available. They naturally want to be certain that any company they do business with will be around long enough and have the financial wherewithal, to pay a claim upon their death.
Even though there is no FDIC for insurance companies, most states have provisions that call for a failing insurance company to have its client base taken over by other companies operating in the state. And beyond that, since insurance companies are investment companies – and quite conservative ones at that – liquidity is almost never a problem.
The financial strength of life insurance companies is rated by a few companies (A.M. Best, Fitch, Moody’s, and Standard & Poor’s). I always look at the comdex score, which is a composite of the ratings and makes comparisons much easier. The comdex is also easy to understand. Its like a grade school test where a score of 90 – 100 is an “A”, 80 – 89 is a ” B”, 70 – 79 is a “C”, etc. Lower rated companies may offer cheaper policies, but I only recommend my clients use firms with a solid ” B” rating or better, which is an 85. Most if the larger, more established firms fall in this category and the differences in pricing is not worth the risk of a problem.
–Andrew Novick, CFP, JD
theinvestmentconnection.com
The point is, rather than trying to do business with the best life insurance company; you should instead seek to work with the best company for you.
That means working with the company that will take a favorable view of whatever your situation is, and provide you with the least expensive premium possible. The most highly rated companies in the industry don’t always provide coverage for people with specific health issues, nor do they typically offer the lowest prices available.
For this reason, we’ve compiled a list of companies that we consider to be the best available in several very important categories. The list focuses on companies that offer the best coverage for people with very common health-related issues.
The companies below will not only offer you the best possible rates for select categories, but they will also provide you with the best opportunity to have your insurance application approved. And for what it’s worth, all of these companies are very highly rated too!
Best Company for Seniors
Mutual of Omaha – This company is great for seniors over 50 who want a basic burial insurance plan.
Founded in 1909, Mutual of Omaha is one of the most well-respected companies in the insurance industry. The company has all kinds of life insurance products available, and their prices are fairly reasonable.
The company offers its Guaranteed Acceptance With Lifelong Protection plan for seniors and those approaching senior status. It is a whole life policy for up to $25,000, and your acceptance is guaranteed if you are between the ages of 45 and 85 (in most states). There are no medical exams or health questions to answer. Rates are affordable and never increase, and benefits are never reduced because of age or health.
Other benefits of the plan:
- Choice of benefit amounts for your specific needs and budget
- Builds cash value that you can borrow against
- Benefits are paid directly to your loved ones and may be used for any purpose
- Your spouse also has guaranteed acceptance in the program
Company Ratings:
A.M. Best: A+ (Superior)
Moody’s: A1 (Good)
Fitch: N/A
Standard & Poor’s: A+ (Strong)
Best Company for Overweight/Obesity
Genworth – We consider this company to be the top source for policies on people who are overweight or obese – a.k.a., larger build. With 69{6fac3e6a3582a964f494389deded51e5db8d7156c3a7415ff659d1ae7a1be33e} of the US adult population classified as overweight, including 35{6fac3e6a3582a964f494389deded51e5db8d7156c3a7415ff659d1ae7a1be33e} as obese this is one of the most important specializations.
Genworth is a large, diversified financial services company that writes a lot of policies, but it isn’t exactly well-known among the general public. However, the company has been around since 1871 and now has more than $100 billion in assets and more than $700 billion or premiums in force.
Genworth tends to take a more liberal stance in regard to weight than most other companies do. This is important because weight, often measured by body mass index or BMI, is one of the most important underwriting criteria. Genworth has a history of assigning a “preferred plus” rating to people who are overweight, and “standard risk” to many people who are obese. This is not typical outcome throughout the industry.
A 55-year-old male – 6 feet tall can get a preferred rate weighing as much as 242 pounds. Once the man hits age 65, he can weigh as much as 258 pounds with the same rating. With most other insurance companies, the weight limits would be significantly lower than these in either case.
Here’s a recent example:
Company Ratings:
A.M. Best: A- (Excellent)
Moody’s: Baa1 (Adequate)
Fitch: N/A
Standard & Poor’s: BBB- (Good)
Best Company for Five Year Term Policies
Minnesota Life – We consider this to be the top life insurance company when it comes to five-year term policies.
Minnesota Life is part of Securian, which was founded in 1880 and is one of the most highly rated insurance companies among the third-party rating services. Securian is the fourth largest direct writer of group life insurance, which may help to explain why the company is so price competitive when it comes to five-year term policies.
Including Minnesota Life, the company provides services for over 15 million people and have over $1 trillion of policies in force.
Minnesota life is one of the few companies that will even write a five-year term policy, or even offer a quote for a price. Consumers can save money with a five-year policy, compared to what they would have to pay out on a ten year policy when they only need five.
This can also be the perfect kind of temporary life insurance to cover a loan with a duration of five years or less, including and especially business loans.
Company Ratings:
A.M. Best: A+ (Superior)
Moody’s: Aa3 (Excellent)
Fitch: AA- (Very Strong)
Standard & Poor’s: A+ (Strong)
Best Company for Universal Life
Protective Life Insurance – We rate Protective as the top company for universal life insurance policies.
Universal life insurance is permanent coverage (as opposed to term insurance). But it offers a large degree of flexibility, including the low insurance cost of term, with the savings and cash value features of whole life insurance. The face amount of the policy, the investment provision, and the premiums can also be changed as the policy owners circumstances change. Universal policies also permit the owner to use investment interest to help pay for the premiums on the policy.
And this is the kind of policy that Protective Life Insurance does better than just about anyone else. The company has been around since 1907 and operates in all 50 states. Some features of their universal life insurance policy include:
- Designed to last your lifetime
- Flexibility to adjust premiums and coverage amount
- Portion of premiums going to cash value account that you could borrow from while you’re alive
- Cash value grows tax-deferred at a guaranteed minimum interest rate specified in your policy.
Company Ratings:
A.M. Best: A+ (Superior)
Moody’s: A2 (Good)
Fitch: A+ (Strong)
Standard & Poor’s: AA- (Very Strong)
Best Company for No Medical Exam Policies
American National Insurance Company (ANICO) – ANICO gets our vote as the top company on the list of the best carriers for no medical exam policies.
Founded in 1905 and based in Galveston, Texas, ANICO provides services for more than 5 million policyholders in all 50 states, including the District of Columbia.
The company offers several policies for life insurance with no medical exam, including a term life policy and a whole life policy. This includes the Freedom Term Life Insurance plan, that offers policy amounts up to $250,000 and terms ranging from 10 years to 30 years.
They also offer the ValueGuard Whole Life Insurance plan, with face amounts of up to $150,000.
And if you are looking for a policy that provides a death benefit, and not only has no medical exam requirement – but also doesn’t ask any health questions at all – they have their Legacy Whole Life Insurance plan. This is a guaranteed issue whole life policy that provides coverage for a face amount of up to $25,000. It is available for those between the ages of 50 and 80, and offers a fixed death benefit, with fixed premiums.
One downside to this policy – though it is common for the policy type – is that it has a two year graded death benefit. This means that if you die within the first two years after the policy is issued, you will be entitled to a return of the premiums paid (up to 110{6fac3e6a3582a964f494389deded51e5db8d7156c3a7415ff659d1ae7a1be33e}) but not the death benefit itself.
No medical exam policies are an excellent choice if you would prefer to avoid the exam for any reason. But they do cost more in premiums on a per thousand basis than fully underwritten policies do. In addition, they usually have strict limits on the amount of the death benefit. So for example, if you decided you need a policy with a death benefit of $1 million, a no medical exam policy probably will not work for you.
But if you want this kind of policy, ANICO is the best company to get it through.
Company Ratings:
A.M. Best: A (Excellent)
Moody’s: N/A
Fitch: N/A
Standard & Poor’s: A (Strong)
Best Company for Cancer Survivors
Prudential (Pruco) – Prudential takes the top spot on our list for the best life carriers for cancer survivors.
Prudential is one of the best-known of all insurance companies, and that’s for good reason. The company works to be a top performer in different market niches, the kind that other insurance companies prefer to avoid. Prudential not only tends to be more liberal in underwriting policies for cancer survivors, but also for people with diabetes and DUI histories. This makes sense because there are tens of millions of people in the US who have one of those situations in their histories.
As you would expect, premiums will be higher for cancer survivors than they will be for people who have not experienced the disease, even with a policy issued by Prudential. The type of cancer, as well as how long it is been in remission are also factors. But if you are a cancer survivor, looking to get life insurance, Prudential is the place to start your search.
Company Ratings:
A.M. Best: A+ (Superior)
Moody’s: A1 (Good)
Fitch: A+ (Strong)
Standard & Poor’s: AA- (Very Strong)
Best Companies for Smokers
Banner Life AND Prudential (Pruco) – Banner Life tops our list of the best life insurance companies for smokers. But not far behind Banner is Prudential.
Banner Life is an excellent company to purchase term life insurance through in general. They are usually among the least expensive on premiums, and often THE least expensive. And writing policies for smokers seems to be their niche.
Banner has been around since 1949, and is a part of Legal & General Group Plc, a UK-based financial services company. Banner is also the parent company of its often better-known subsidiary, William Penn Life Insurance of New York. The company has more than $5.7 billion in assets and over $587 billion of life insurance in force.
Banner offers you both preferred tobacco and standard tobacco ratings on their policies. So while you will pay a higher life insurance premium as a smoker than a non-smoker will, you’ll still pay less for a policy with Banner than just about any other life insurance company.
Company Ratings:
A.M. Best: A+ (Superior)
Moody’s: N/A
Fitch: N/A
Standard & Poor’s: AA- (Very Strong)
Prudential (Pruco). Prudential is our other star performer among the best carriers for smokers. Not only do they provide more affordable rates for smokers than most of the competition does, but they may even give you a non-smoker rate if you chew tobacco.
This is a bigger advantage than it seems at first glance. Most companies will assign you a smoker rating for virtually any tobacco use at all, no matter how minor. Chewing tobacco will qualify you as a smoker in most companies – but not Prudential.
Best Companies for Diabetics
American General – Part of the AIG family, American General gets our vote at the top of the list of diabetic friendly carriers. But also on the list is Banner Life.
American General has been in business since 1850 and serves more than 12 million customers in the US, and more than 88 million worldwide. Based in Houston, the company also includes United States Life Insurance Company in New York City.
In general, American General is one of the very best insurance companies for high-risk applicants. But they are especially strong in underwriting policies for those who have type 2 diabetes.
The company offers term policies of the longer term nature, running as long as 30 years. They also offer an accelerated death benefit rider that enables you to receive at least some of your insurance proceeds while you are still alive, and if you are diagnosed with a terminal illness. This can help to provide you with important living benefits that will help you to pay at least some of your medical bills and other expenses.
Like many companies that offer more liberal underwriting guidelines with certain high-risk applicants, American General is tougher if your profile involves other risks. This is particularly true with certain non-health related risks. For example, American General can be a difficult company to work with if you have a recent bankruptcy or DUI/DWI episode. They are also tough on anyone with a felony charge, particularly if the charge is related to either sexual assault or drugs.
Overall, however, American General offers competitive pricing, flexible underwriting, and a well-deserved reputation for excellent customer service.
Company Ratings:
A.M. Best: A (Excellent)
Moody’s: A2 (Good)
Fitch: A+ (Strong)
Standard & Poor’s: A+ (Strong)
Banner Life. Much like Prudential and a few other life insurance companies, Banner likes niche markets including the one for diabetics. And that’s an excellent business decision, considering that there are more than 29 million diabetics in the US.
Banner’s product line in this area focuses primarily on those with type II diabetes. And again, while you can expect to pay more in premiums for such a policy than someone who does not have the disease, they do have coverage available, and typically at lower premiums than most the competition.
You see some duplicates on this list, and that’s hardly a surprise. Typically, a life insurance company that is innovative in one niche will also be highly competitive in others. We also keep a running list of who we find to be the consistent top life insurance companies to deal with.
If you have a common health condition, you should always start your life insurance search with the companies that are most likely to approve your application. And that’s the whole purpose of this list.
Are these companies likely to fail to pay out? As we said above, life insurance companies are the safest insurance companies of the group. And you can tack the health of companies through the insurance ratings agencies.
Financial solvency of the companies can be tracked by the various rating agencies, and this can be accessed by the consumers to help determine which companies they should consider using, but this is not a guarantee, and a company could still have financial issues in the future. That is why the various States have their State guarantee programs which help provide a floor in the event of problems.
Marvin H. Feldman, CLU, ChFC, RFCPresident and CEO, LIFE Happens
To calm the nerves of anyone that has heard a horror story we put together the graphic to the right (click on it to see the full graphic) to help you fully understand exactly how unlikely it is that your family would not receive a death benefit as a result of the a company going under.
The biggest thing you will want to know about is NOLHGA
What is NOLHGA and How Does it Help Me?
NOLHGA stands for National Association of Life & Health Insurance Guaranty Associations. To break that down, each state has their own life and health insurance association that guarantees the life and health insurance policies of people in their state.
If you are familiar with banking then each state has their own insurance version of the FDIC. This means each insurance company that provides life or health insurance in a state pitches in when another company goes under. This makes sure that the consumer is not harmed in the even of an insurance carrier going belly up.
To give some structure to all these different associations, NOLHGA was born. So each state has to meet the minimum standards of NOLHGA, and many states demand more than the minimum. The maximum covered amount of a life insurance policy from a company that has been taken over by NOLHGA is $300,000 of death benefit.
As someone who carries a $2.5 million dollar policy that number was pretty alarming the first time I saw it, but that was just the tip of the iceberg. What I soon learned is that NOLHGA will coordinate the sale of the policies that the now defunct insurance company to another health carrier. This means that my jumbo policy will just move over to the new company and I get to keep my death benefit.
All of that is to say that life insurance companies almost never go under and when they do there is another company waiting to pick up all those clients. If any of this makes you nervous or you have any more questions you can always call us, and we’ll help you through the application process and get you approved as quickly as possible. If you are ready to get started with a set of life insurance quotes then use the form on the side of this page to get started.
SOURCE: Good Financial Cents – Read entire story here.
