Penn Mutual is an excellent company and makes up the elite class of the best life insurance companies for wealth building and legacy creating. In the following Penn Mutual review we will discuss the company’s history, ratings, products and benefits. Is Penn Mutual the right company for you? Let’s take a look.
Review of Penn Mutual Life Insurance Company
It is important when looking for the best life insurance to familiarize yourself with the different companies before you make a long term commitment. If you can believe in the company and products it makes your journey to financial freedom and independence that much sweeter.
At InsuranceandEstates.com, we believe high cash value life insurance is one of the most advantageous, and most misunderstood, assets available. Yes, we said asset, because permanent life insurance is an asset.
After you have familiarized yourself with Penn Mutual, take a few more minutes and get familiar with our philosophy of money and how you can utilize life insurance and estate planning to build wealth and create a legacy.
About Penn Mutual
Penn Mutual has been in business since 1847, making the company 170 years old as of March 2017.
Penn Mutual is a mutual company. Mutual companies are not owned by shareholders but rather by the participating policyholders, who share in the company’s profits through dividends.
As of December 31, 2016 the total individual life insurance in force is $128.0 billion.
For 2017, Penn Mutual’s dividend interest rate will be 6.34% and the company will pay participating policy holders a total of $58 million in dividends.
New Automated, Accelerated Experience
Penn Mutual is an innovator in the life insurance industry. Nowhere is that more evident that in the Company’s latest move towards automated accelerated underwriting, which is a form of no exam life insurance.
According to Penn Mutual’s latest press release, the company will be offering no medical testing required policies with approvals in as quick as 24 hours, in contrast the the industry average of around a month. The policy is available for individuals ages 20-65 with face amounts up to $2.5 million ($2,500,000).
With this announcement, Penn Mutual has placed itself into a class all its own. According to Penn Mutual,
[The innovative new no exam required accelerated experience] has the automated intelligence to make key decisions and integrate with online tools and databases to quickly verify, authenticate and confirm, speeding decision making and approvals.
Bravo, Penn Mutual! Bravo!
Penn Mutual Ratings
Penn Mutual is on solid financial footing as is evidenced by the following ratings:
- A.M. Best rating A+ (Superior) as of March 2016
- Moody’s Investor Service Aa3 (Excellent) as of October 2016
- Standard and Poor’s A+ (Strong) as of December 2016
- Comdex Rating 92
Additionally, Penn Mutual Life Insurance Company has an A+ rating with the BBB, which speaks to the company’s commitment to its customers.
Penn Mutual Products
Penn Mutual focuses on both annuities and life insurance.
- Fixed Annuities
- Immediate Annuities
- Variable Annuities
- Term Life Insurance
- Whole Life Insurance
- Universal Life Insurance
- Variable Life Insurance
- Joint or Survivorship
Penn Mutual Life Insurance
Although Penn Mutual focuses more on the permanent life insurance and the benefits therein, the company offers both term life and permanent life insurance.
Benefits of Term Life Insurance
- Lower Initial Cost
- Income Protection
- Mortgage Protection
- Conversion Option
Benefits of Permanent Life Insurance
There are many benefits of permanent life insurance in a diversified portfolio. Below are just some areas where permanent life insurance can provide extreme value. Click on any topic below to learn more.
- Business Succession Planning
- Buy Sell Agreements
- Key Man Insurance
- Estate Planning
- Infinite Banking
- Executive Bonus Plans
- Deferred Compensation Plans
- Retirement Planning
- Wealth Building
Penn Mutual Life Insurance Policies [Plans and Features]
Term Life Insurance
Term life insurance allows you to have a large guaranteed death benefit for a lower initial cost than permanent life insurance.
Penn Mutual offers 10, 15 and 20 year term lengths.
Penn Mutual’s convertible term life insurance allows the insured to convert all or a portion of the policy to permanent coverage prior to the end of the term or age 70. The advantage is that you can get a lot of coverage for a low cost while your income is lower, and then convert that coverage to a superior policy down the road once you become more established.
Permanent Life Insurance
Permanent life insurance, and whole life in particular, offers many lifelong benefits. One of the primary benefits is that under IRC Section 7702, cash value life insurance is offered many tax advantages. Anytime the internal revenue code offers tax incentives it makes sense to utilize those tax incentives to the fullest.
Addition benefits of cash value life insurance:
- Income tax free death benefit
- Tax deferred cash value growth
- Tax free life insurance loans
- Tax free cash withdrawals up to basis
Guaranteed Choice Whole Life
Whole life insurance lasts your entire life and offers specific guarantees, including a guaranteed death benefit, guaranteed cash accumulation and guaranteed level premiums.
Additional cash value growth is available through dividends. Although not guaranteed, Penn Mutual has paid dividends each year since the company was founded in 1847.
Dividends are valuable and can be used to:
- Purchase paid up additions
- Pay Premiums
- Earn interest with the company
- Cash Out
Penn Mutual’s Guaranteed Choice Whole Life offers many flexible options, such as ordinary whole life to age 100, as well as limited pay life insurance, such as 20 pay and paid-up at age 65.
Penn Mutual practices direct recognition when calculating dividends if there is an outstanding policy loan. That means the policy loan reduces how much cash value the company recognizes. Your dividend amount is calculated using your total cash value. As a result, the dividend received when there is an outstanding policy loan will be less for direct recognition companies than those that practice non-direct recognition, such as MassMutual.
The work around to this might be to use the cash value as collateral and get a loan through a local bank so that your cash value continues to earn maximum dividends in your policy.
Whole Life Insurance Riders
Accelerated death benefit – offers the option of taking a portion of the death benefit early if the insured is diagnosed as terminally ill.
Child’s Term Insurance – term rider providing life insurance for children until age 23, at which point the policy can be converted to permanent coverage.
Chronic Illness Accelerated Benefit
Disability Waiver of Premium
Guaranteed Purchase Option – option (7) to purchase additional coverage up to $100,000 with no evidence of insurability
Flexible Protection Agreement – balances the death benefit with term life
Accelerated Permanent Paid Up Additions
Enhanced Permanent Paid Up Additions
Universal Life Insurance
Universal life insurance is permanent coverage that offers flexible premiums, guaranteed death benefit, and cash value growth. Penn Mutual offers four different universal life policies.
Accumulation Builder Select Indexed Universal Life and Accumulation Builder Advantage Indexed Universal Life
Indexed account to either the S&P 500 Index or the S&P Global Broad Market Index.
Provides an annual fixed interest rate that will never drop below 1%, despite negative return in the stock market.
- Death benefit protection
- Premium flexibility
- Potential for strong cash value growth
Protection Guard Universal Life and Guaranteed Protection Universal Life
- Primarily focused on providing a lifetime death benefit for a lower cost
Survivorship Plus Indexed Universal Life
Second to die life insurance. Covers the lives of two people and the death benefit is paid upon the death of the surviving spouse or partner.
- Provides lifetime coverage at a lower cost than insuring only one person
- Provides cash value growth
Diversified Growth Variable Universal Life (VUL)
Variable life insurance provides policy cash value growth through separate investment options.
- Lifetime Protection
- Potential for high cash value accumulation
- Flexible coverage and premium options
- Greater upside potential/greater risk
Penn Mutual Life Insurance Review Conclusion
At Insurance and Estates, we are big fans of this mutual company. It offers many excellent high cash value growth life insurance policies. Further, the company has a long dividend history, even during the Great Depression and Great Recession. If you are looking for permanent coverage from a solid mutual company, Penn Mutual is one of the best options in the marketplace.
Have questions or would you like to see an illustration of Penn Mutual or of many other top cash value life insurance companies? Give us a call today for a free life insurance consultation with an advanced markets professional.