In the following American Home Life review we will focus on the company’s history, financial ratings, life insurance policies, and the policy riders offered so that you can make an informed decision on which company will provide the the best whole life insurance for you — based on your unique need, goals and objectives.
Review of American Home Life Insurance Company
The first step to find the best life insurance is to get familiar with all the players in the industry. At Insurance and Estates, we have compiled different life insurance reviews, including our picks for the best whole life insurance insurance companies.
About American Home Life Insurance Company
American Home Life was founded in 1909 under its original name of Kansas Home Mutual Life Insurance Company. Three years later the company merged with American Mutual Life Insurance Company and became American Home Life Insurance Company.
What is a mutual insurance company?
Mutual insurance companies are owned by policyholders, rather than shareholders, as is the case with publicly traded companies. Rather, mutual insurance companies and policyholders share in the ownership rights of the company, as well as take part in the company’s profits through dividends. The primary advantage of mutual insurance companies is the focus can be on long-term, low risk investments, since the focus is not on enriching stockholders in the short-term.
American Home Life typically pays an annual cash dividend to policyholders. The amount of dividend to be paid to participating policyholders is determined by the board of directors.
American Home Life Ins Co
P.O. Box 1497
Topeka KS 66601-1497
American Home Life Ratings
American Home Life has a solid rating from A.M. Best. However, it is certainly not one of the highest rated life insurance companies in the U.S.
AHL Financial Rating:
A.M. Best rating: B++ (5th highest out of 15) with a “Stable Outlook”
Rating current as of May 1, 2018.
American Home Life Products
AHL offers both annuities and life insurance products.
- Flexible Premium Annuities
- Term Life Insurance
- Whole Life Insurance
- Final Expense Insurance
- Preneed Funeral Funding
American Home Life Insurance Policies
American Home Life offers both term and whole life insurance. The primary uses of both include the following.
Benefits of Term Life Insurance
- Lower Initial Cost
- Income Protection
- Mortgage Protection
- Conversion Option
- Business Continuity Planning
- Buy Sell Agreements
- Key Person Insurance
- Estate Planning
- Infinite Banking
- Executive Bonus Plans
- Deferred Compensation Plans
- Wealth Building
American Home Life Policies Offered
Term life insurance allows you to leverage a relatively small monthly premium for a large guaranteed death benefit with a lower initial cost than cash value life insurance.
American Home Life Insurance Company offers 10, 15, 20 and 30 year term lengths. The policy is renewable to age 90.
The policy can be converted from term to whole life insurance. A conversion option allows the insured to convert all or a portion of the policy to permanent coverage with no evidence of insurability, i.e. no medical exam needed.
American Home Life Whole Life Insurance
- American Whole Life
- Young American Whole Life
- Value Whole Life Plan
- Final Expense Plan
Participating Whole Life Insurance
The American Young and American Whole Life plans are whole life insurance policies that make excellent options for anyone somewhat healthy looking for final expense insurance but also wants the benefit of dividends due to the low face amount minimum of only $5,000.
Low Cost Whole Life
This policy is non-particpating whole life insurance. You still get many of the benefits of whole life but without the additional benefit of an annual dividend. The minimum face amount for this policy is $25,000.
Final Expense Plan
This final expense whole life insurance plan from American Home Life provides cash value, fixed premiums and guaranteed death benefit protection.
Final Expense Plan Features
- Whole Life Insurance
- Face amounts between $1,000 – $35,000
- No Exam required
- 9 Health Questions
Whole life insurance provides specific guarantees including:
- Guaranteed death benefit,
- Guaranteed cash value growth and
- Guaranteed level premiums.
Additional cash value growth is available through dividends. Although not guaranteed, American Home Life has paid life insurance dividends to participating policyholders for many years.
Dividends are valuable and can be used to:
- Purchase paid up additions
- Pay premiums
- Earn interest with the company
- Pay down policy loan balance and interest
- Cash Out
Additional Benefits of Whole Life Insurance
Tax free life insurance policy loans
You can take out a tax free life insurance loan by using your cash value as collateral. There is no limit as to what you can do with your policy loan, but we would recommend using it to buy additional income producing assets, such as a real estate wealth building strategy using life insurance.
Tax deferred cash value growth
The Internal Revenue Code Section 7702 is all about cash value life insurance. One of the incentives offered by the code is that your cash value grows tax deferred. And as mentioned above, policy loans are income tax free. Therefore, if you use policy loans to access your cash value you may never have to pay taxes on your gains.
One word of caution, beware of over funding your policy and creating a modified endowment contract (MEC). If your policy becomes a MEC, many of the provisions of the IRC will not apply to your policy.
Tax free death benefit
The life insurance proceeds from your death benefit are not taxable to your beneficiary. A death benefit is taxed if your estate exceeds the federal estate tax exemption limit. If you have a large estate, careful asset protection using an irrevocable trust may be necessary.
American Home Life Insurance Riders
Guaranteed Insurability Rider: If you are considering whole life insurance for children, the guaranteed insurability rider is essential. This rider allows the owner to add additional whole life coverage at specific years or at specific life events, such as the birth of a child. The additional coverage can be added with no evidence of insurability.
Waiver of Premium Rider: if you are diagnosed as totally disabled, the waiver of premium rider kicks in and your premiums will be waived.
Child’s Term Rider: Allows you to add coverage for all your children under the required age.
American Home Life Insurance Company Review Conclusion
American Home Life is a great mutual insurance company offering participating whole life insurance. Although the company’s financial rating could use some improvement, our overall assessment is that American Home Life is a solid choice for anyone considering whole life.
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