National Life VT is one of a handful of mutual insurance companies that offers a wide array of different products, sure to meet the need of most people looking to get insured. In this National Life Group and Life Insurance Company of The Southwest review we delve into the company’s history, its strong ratings, its products and services and the various life insurance offerings available.
Review of National Life Group
When seeking out the best life insurance for your specific needs and goals, it helps to acquaint yourself with the top rated life insurance companies before you make a decision on any specific carrier.
The team at I&E craft life insurance reviews of the top permanent life insurance companies currently offering the most competitive policies available.
Our goal is to provide our knowledge and expertise to your unique situation in order to help empower you with the understanding and insight needed to choose the right company and policy that meets your goals and objectives.
So let’s begin with a brief company history.
About National Life Group
National Life Group has been around for over 168 years. National Life Group is the name given to a group of affiliate companies, which include the National Life Insurance Company, the Life Insurance Company of the Southwest and Equity Services, Inc.
National Life Insurance Company is out of Vermont and was founded in 1848. Life Insurance Company of the Southwest is out of TX. Equity Services, Inc., is a Broker/Dealer and Registered Investment Advisor of National Life Insurance Company.
The ultimate controlling entity of all the companies in the National Life Group family is the National Life Holding Company, which also includes NLV Financial Corporation, National Life Group Charitable Foundation, Sentinel Asset Management, Inc., National Retirement Plan Advisors, Inc., National Life Distribution, LLC, Catamount Reinsurance Company and Longhorn Reinsurance Company.
National Life Group has a mutual structure, which means the company is not publicly traded; rather National Life Group is owned by its policyholders, who share in the Company’s profits, above expenses and reserves.
National Life Group’s affiliate, National Life Insurance Company, collects the most life insurance premiums in New York, followed by Florida, and then California.
National Life Group Ratings
National Life Group ratings as of September 2017:
- A.M. Best rating A, Excellent
- Moody’s Investor Service A2, Good
- Standard and Poor’s A+, Strong
- Comdex Rating 80
Ratings are subject to change.
National Life Group’s Products and Services
National Life Group, through its various affiliates, offers a vast product line, with products and services:
For individuals and families, including:
- Life Insurance,
- Retirement Plans,
- Living Benefits,
- Mutual Funds
Employers and Plan Sponsors, including
- Group Unallocated Annuity
- Guaranteed Lifetime Income Rider
Business Owners, including
- Qualified Plans
- Non-Qualified Plans
- Business continuation
- Business Transition
Life Insurance Policies offered by the National Life Insurance Company
National Life offers a complete line of life insurance policies, including: term life, universal life and whole life.
Although there are benefits to all types of coverage, and each policy has its place, in our opinion there is distinct advantages to permanent life insurance vs term life.
Benefits of Term Life Insurance
- Lower Initial Cost
- Income Protection
- Mortgage Protection
- Conversion Option
Benefits of Permanent Life Insurance
- Buy Sell Agreements
- Key Man Insurance
- Estate Planning
- Infinite Banking
- Executive Bonus (Section 162) Plans
- Non-Qualified Deferred Compensation Plans
- Split Dollar Life Insurance
- Life insurance for children
National Life Insurance Company Policies [Plans and Features]
National Life Group products issued by National Life Insurance Company and Life Insurance of the Southwest.
National Life Term Life Insurance
National Life Insurance Company offers convertible term life insurance. The company has a few different term plans, including annual renewable term and level term life insurance.
Annual Renewable Term
Annual Renewable Term (ART) is annual term insurance that renews every year. As you age, premiums increase. ART insurance is a great option for someone looking to be insured for a short time, such as entrepreneurs looking to use life insurance as collateral for a business loan.
Guaranteed Level Term Series
Level term provides a fixed premium for the initial term duration. The policy is available in 10, 15 and 20 year terms. The policy includes a conversion option which allows you to convert either by age 70 or the end of the policy, whichever is sooner.
Level term life with a conversion option is ideal for someone who either needs coverage for a set period of time or who desires permanent coverage but cannot currently afford the premiums. The conversion option allows you to convert all or a portion of the death benefit to a permanent policy.
National Life allows policyholders to convert to issue age for the first five years of the term policy, otherwise the policy converts at your attained age. If you convert at your attained age, you may be eligible for up to a 12% term conversion credit.
Universal Life from National Life
National Life Universal Life offerings include:
- AssurePlus Protector
- Income Builder UL
- Estate Provider (Survivorship Life Insurance)
- Ultra Select IUL
- FlexLife IUL
- SecurePlus Provider IUL
Universal Life offers permanent coverage but with flexible premium payments. You can choose to pay level premium payments, skip a payment, or pay more or less for a time.
Universal Life also offers a flexible death benefit that can be decreased depending on your current needs.
UL policies also grow cash value. Depending on the type of Universal Life policy you have will determine the degree to which your cash accumulates.
Indexed Universal Life offers some additional benefits over Universal Life, including potential for higher returns and two death benefit options. Under option A, the death benefit is fixed. Under option B, the death benefit grows in relation to the cash value.
Equity indexed universal life is not a direct investment in the stock market. Instead, the IUL company buys calls in the market as a hedging strategy. As investment income increases in the carriers general account, the company purchases more options, increasing the cap and participation rates.
And rather than having to move certain segments from an indexed fund to the fixed account, variable net cost loans are available which allow crediting from index strategies to be applied to the portion of the cash value being used as collateral. This is beneficial in times of high interest indexed earnings since positive arbitrage can be achieved between borrowed funds and cash value in the indexed account.
National Life has a full suite of fantastic Universal Life products to choose from. Depending on your need and your specific goals will determine if universal life or indexed universal life is right for you, including which policy will help you achieve your goals.
SecurePlus Provider IUL
Issued by Life Insurance Company of the Southwest, SecurePlus Provider IUL is designed to be overfunded, focusing on cash value growth to be used as income later in life.
- For the various interest crediting strategies, you can choose a fixed account which provides a 2% minimum interest rate. There is a guaranteed 100% participation rate based on the S&P 500 equity index.
- If you are 65 and under, there are no routine life insurance medical exams required if face amount is $250,000 and under.
- Minimum face amount required is $25,000.
- Both GPT or CVAT Tests allowed for maximum cash value growth vs death benefit.
- Two death benefit options, level and increasing.
- No exam life insurance for face amounts up to $250,000.
Whole Life Insurance from National Life
With National Life, you have the flexibility to choose your payment schedule. Single premium, limited pay life insurance and whole life to age 100 are some of the available options.
National Life and Life Insurance of the Southwest Whole Life offerings include:
- LifeBuilder Whole Life
- LSW ProtectorLife Whole Life Insurance
- ValuGuard Survivorship Whole Life
LifeBuilder Whole Life Insurance
Offers limited pay life insurance, including
- 10 Pay
- 15 Pay
- 20 Pay
- Paid up at 65
- Lifetime coverage
Among the best whole life insurance benefits are three guarantees, including:
- Guaranteed death benefit,
- Guaranteed cash accumulation and
- Guaranteed level premiums.
National Life Group Whole Life Dividends
Additional cash value growth is available through dividends. Although not guaranteed, National Life has a solid history of paying participating shareholders dividends for over 150 years.
In 2017, National Life Group will pay out dividends estimated to be $67 million to eligible participating policyholders, with a 5.75% dividend rate. In 2018, the dividend rate was 5.25%.
As with most mutual insurance companies that offer participating whole life, a large percentage of the total dividend will go towards the purchase of paid up additions.
Life insurance dividends are unique to participating whole life insurance policies and are used by policyholders to:
- Purchase paid up additional life insurance
- Lower Premiums
- Earn interest with the company
- Pay back an outstanding policy loan
- Withdraw for Cash
Additional Benefits of Whole Life Insurance
- Tax free policy loans
- Tax differed cash value growth
- Tax free death benefit
Tax free life insurance policy loans
You can take out a tax free life insurance loan by using your cash value as collateral. National Life’s loan interest rate is currently 5%.
National Life practices direct recognition. When you take out a loan, National Life adjusts your policy dividends, which may result in a lower dividend on the cash value that currently has a loan against it.
Tax deferred cash value growth
Cash value life insurance enjoys special treatment under Internal Revenue Code 7702 which allows cash value to grow tax deferred. And if you utilize the policy correctly you will never need to pay taxes on the cash value growth.
Tax free death benefit
The life insurance death benefit is not taxable to your beneficiary. The only way a death benefit is taxed is if your estate exceeds the federal estate tax exemption limit. If you have a large estate, careful asset protection planning is necessary.
National Life Group Accelerated Benefits Riders
There are various life insurance living benefits available, including long term care riders vs chronic illness riders. National Life Group and Life Insurance Company of The Southwest offer 4 types of living benefits: Chronic Illness, Terminal Illness, Critical Illness and Critical Injury.
Chronic Illness Rider
Chronic illness riders provide access to your policy’s death benefit if you are diagnosed with a qualifying chronic illness. Typically, in order to qualify you need to be diagnosed as being unable to perform 2 of 6 activities of daily living for a period of 90 consecutive days or suffers severe cognitive impairment that affect your health and safety. Upon qualifying for the chronic illness benefit, you will receive a cash indemnity to use as needed.
The cash indemnity is a factor of the death benefit. Normally, 2% of the death benefit can be accessed per month or 24% per year, up to a maximum amount determined by the carrier.
Terminal Illness Rider
If you are diagnosed with a qualifying terminal illness with 24 months or less to live, you can access up to $1,500,000 of your death benefit as an advance. You can use the money however you see fit.
Critical Illness Rider
You can receive a lump sum payment from your death benefit, on a discounted basis, if you are diagnosed with a specific critical illness, such as ALS, cancer, stroke, heart attack, blindness, etc.
Critical Injury Rider
You can receive a lump sum payment from your death benefit, on a discounted basis, if you are diagnosed with a specific critical injury, such as a coma, severe brain injury, severe burns and paralysis.
Additional Life Insurance Policy Riders
The following life insurance riders are not available on all types of policies.
Children’s Term Rider – term rider providing up to $25,000 of life insurance for your kids up to age 23. You pay one additional fee for the rider no matter how many children you have. In the future, your child will have an option to convert the policy to permanent coverage.
Accelerated Benefits Rider – Available before or after issue, the AB rider allows access to all or a portion of your death benefit if you have a qualifying terminal, chronic, critical illness or critical injury.
Each qualifying event comes with specific requirements. For example, the AB rider for terminal illness is available if you are diagnosed terminally ill with 24 months (12 in some states) to live.
Waiver of Premium – premium is waived if you become disabled after a 6 month waiting period. For those with term coverage that have the WOP rider, you can convert your policy to a permanent policy if you are disabled for 2 years and base premiums will be waived. Most waiver of premium riders “fall off” the policy at age 65 if no disability has occurred.
Unemployment Rider – Following involuntary unemployment from your full time job, premiums will be waived for 3 months.
Guaranteed Insurability Rider – guarantees you can add more coverage at certain ages and life events regardless of your insurability.
Other Insured Rider – renewable term rider that covers your spouse, child or business partner.
Enhanced Death Benefit Rider – pays a higher death benefit if death occurs within a targeted age range.
Estate Preservation Rider – If the estate planner has opted to issue the policy outside of an irrevocable life insurance trust (ILIT), federal law requires the policy to be in the ILIT for three years or the transfer to the ILIT is void. This rider protects the period of time from policy issue to the ILIT if both spouses die in that three year period by paying an additional amount of death benefit.
Overloan Protection Rider – no cost optional rider that protects the policy from lapsing when a policy loan exceeds the accumulated value. The policy must be in force for 15 years and the insured must have attained the age of 75 to be eligible.
Lifetime Income Benefit Rider – Guaranteed stream of income the rest of your life once certain requirements are met, such as the policy being in force for 15 years and the insured’s age being between 60-85.
National Life Review Conclusion
As you can see, National Life is an fantastic life insurance company that has no negatives to speak of.
But at the end of the day, finding the right company for you requires an intimate knowledge of the different companies and policies available.
You have to ask,
is National Life the best company for meeting your specific needs, goals and objectives?
Maybe, maybe not.
Do you have questions or would you like to see an illustration of National Life or any of the other top cash value life insurance companies we represent? Give us a call today for a free life insurance consultation with an advanced markets professional.