Prudential Financial, or more widely known just as “Prudential” represents the family of companies under the Prudential banner. Prudential is a global giant and certainly one of the best life insurance companies in the U.S. In the following Prudential life insurance review we will take a look at the Company’s history, financials, ratings, products, riders and anything we can uncover in our efforts to bring to you the best Prudential Life Insurance review available.
Review of Prudential Life Insurance
Prudential Life provides great options on the best universal life insurance coverage available. The company also offers some unique underwriting niches that make it one of the top companies offering life insurance for seniors.
At I&E, we create these life insurance reviews highlighting our favorite types of cash value policies, including dividend paying whole life insurance and indexed universal life insurance. We bridge the gap between consumers and companies by providing rich content and unique information, so that you can make the best decision on which company is right for you, based on your specific needs and goals.
So with that in mind, let’s take a look at how Prudential Financial rose up the ranks to become the powerhouse that it is today.
About Prudential Financial
Prudential’s mission is to help their customers achieve financial prosperity and peace of mind. Prudential Financial began as The Prudential Friendly Society founded in 1875. The Prudential Friendly Society was the first insurance company focused on the working class. Ten years later, the company was renamed The Prudential Insurance Company of America. Prudential chose the Rock of Gibraltar as its company symbol to demonstrate the strength and security Prudential provides to its customers.
Prudential Financial, Inc. is the parent company. Some of its affiliates include The Prudential Insurance Company of America, Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey, for policies issued in New York and New Jersey, which issue the company’s insurance and annuities.
According to the company’s press release on its 2016 results, Prudential’s Individual Life segment reported adjusted operating income of $138 million for the current quarter, compared to $99 million in the year-ago quarter. The company’s stock, PRU, is currently trading at $110 a share, down from its yearly high of $115.26, but far above its 52 week low of $82.45.
Pruco Life Insurance Financial Ratings
Pruco is a top rated life insurance company. The various life insurance ratings agencies have given high marks to Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey across the board. Pruco’s ratings as of October 2017 include the following.
Pruco Life Insurance Company’s ratings:
- A.M. Best: A+, Superior
- Fitch: AA-, Strong
- Moody’s: A1, Good
- Standard and Poor’s: AA-, Very Strong
- Comdex Ranking: 92
Pruco Life Insurance Company of New Jersey’s ratings:
- A.M. Best: A+, Superior
- Fitch: AA-, Strong
- Moody’s: N/A
- Standard and Poor’s: AA-, Very Strong
- Comdex Ranking: 94
These are superior ratings that demonstrates Prudential’s and Pruco Life’s commitment to long term stability, providing peace of mind to all Prudential policyholders.
Products Offered by Prudential Financial
Prudential Financial has a large product offering that includes retirement related services, mutual funds, investment management, annuities, and of course, life insurance.
The company’s products and services for individuals feature:
Insurance for Individuals and Family, including
- Term life insurance
- Universal life insurance policies
- Indexed universal life insurance policies
- Variable universal life insurance policies
- Prudential has a wide array of Variable Annuities to choose from
Life Insurance Policies offered by Prudential Financial
Prudential offers both term life and permanent life insurance. The right life insurance policy for you will be based on your specific personal and business needs and goals. Each type of policy has its benefits. It is important to know which product is right for you, specifically term life vs permanent life.
Benefits of Term Life Insurance
- More Affordable Initial Premium
- Primary Income Earner Income Protection
- Mortgage Protection Specifically Tailored to Your Term
- Conversion Option to Switch to Permanent Coverage
Benefits of Permanent Life Insurance
- Buy Sell Agreements
- Key Man Insurance
- Estate Planning
- Executive Bonus (Section 162) Plans
- Non-Qualified Deferred Compensation Plans
- Split Dollar Life Insurance
- Infinite Banking
Life insurance policies offered through Prudential Financial
Prudential offers term life and universal life. Under the umbrella of universal life is also indexed universal life and variable universal life. Let’s start by taking a look at Pruco’s term life.
Pruco Life Insurance Company offers its term life under its Term Essential and Term Elite products. The products are term life insurance policies that provides term lengths of 10, 15, 20 and 30 years. The policy is convertible term life insurance, which allows you to convert to one of Prudential’s permanent policies by the end of the term or age 65, whichever is first. The term policy is available for age 18-75, depending on the insured’s age.
Actual age vs nearest age
A benefit of choosing Prudential for term life is that Prudential uses your actual birthday, rather than the industry standard “nearest age” calculation. Nearest age uses a 6 month mark to determine if you are closer to the next age or not. So with nearest age, if you are 40 but your birthday was over 6 months ago, the insurer will list your age as 41. In this instance, Prudential’s term life insurance premiums will often be lower because Prudential uses your actual birthday and would still consider you age 40.
Return of Premium Term
Prudential also offers term life insurance with return of premium (ROP) for term lengths of 15, 20 and 30 years. The ROP term life insurance policy is available for ages 18-65, depending on your age when applying.
Prudential permanent life insurance includes Universal, Guaranteed, Indexed and Variable.
Universal Life provides the flexibility to pay more or less into your policy, based on minimum cash value requirements. Further, the death benefit can be raised or lowered depending on your needs and goals as time goes by, subject to certain requirements. That way you don’t find yourself with a policy too big or not big enough.
Prudential’s Universal Life Insurance Policies include:
- Universal Protector
- Essential UL
- SUL Protector
- Universal Plus
PruLife® SUL Protector
SUL Protector is a second to die survivorship life insurance policy. The universal life insurance coverage extends to two people and pays the death benefit to the beneficiary upon the death of the second insured.
The two people can be spouses or business partners, which makes it a great policy for both:
The policy offers a 10 year Limited No-Lapse Guarantee that provides a guarantee against lapse. In addition, a Lapse Protection Rider can be added to provide up to a lifetime of guaranteed protection.
The policy is available for issue on ages 18 to 85, with face amounts starting at $200,000.
Additionally, two notable life insurance riders are available: Estate Protection Rider and Guaranteed Policy Split Rider.
The Estate Protection Rider pays an additional 100% death benefit if both insureds die before the 4th policy anniversary.
The Guaranteed Policy Split Rider allows the policy to be split if an event occurs that makes it necessary to do so, such as a divorce.
Indexed Universal Life
Indexed Universal Life (IUL) is similar to Universal Life in most ways except in regards to how interest is credited to your policy’s cash value account. With IUL policies, the interest credited is based on either a fixed account or indexed account. The company declares the interest rate in the fixed account in advance. Your money is not directly invested in the market, but rather the indexed account is credited interest based upon a formula that tracks the performance of underlying major indices, such as the NASDAQ 100, Russell 2000, S&P 500, etc. Prudential uses the S&P 500 as the financial index it tracks to determine the interest credited to your account.
Prudential’s Indexed Universal Life Insurance Policies include:
- Founders Plus UL
- Index Advantage UL
- Survivorship Index UL
Variable Universal Life
Variable Life Insurance (VUL) provides the flexibility of Universal Life, but also the potential to increase your cash value by allocating your money into various sub-accounts that invest directly in the underlying asset class, similar to mutual funds. VUL policies require active management due to the inherent risk of investing in the market, with the potential to lose value, including principle.
Prudential’s Variable Universal Life Insurance Policies include:
- VUL Protector
- Custom Premier II
- SVUL Protector
Additional Benefits of Cash Value Life Insurance
There are distinct benefits of cash value life insurance, which include:
Tax free life insurance policy loans
Life insurance policy loans allow access to your policy’s cash value. The owner of the policy has a contractual right to borrow from the insurer, using your cash value as collateral for the loan, for anything you want to use the loan for. The outstanding loan, plus interest, will reduce your death benefit if you die without having repaid the loan.
Tax deferred cash value growth
IRC 7702 deals with cash value life insurance. Under the Internal Revenue Code, your cash value in the insurance policy grows tax deferred. And you can continue to have a tax favored status on your cash value accumulation if you access the cash value via tax free policy loans.
Tax free death benefit
Your life insurance death benefit is not taxed to your beneficiary. As long as your estate is under the federal exemption limit, or your own state inheritance tax level, no tax from your life insurance proceeds will be taxable. For larger estates, careful asset protection planning is necessary.
Pruco Life Insurance Company’s Policy Riders
The following life insurance riders from Prudential Financial are not available on all types of Pruco Life Insurance Company policies.
The BenefitsAccess Rider offered through Prudential is a chronic illness rider. There is a difference between Long Term Care insurance and Chronic Illness Riders. However, Prudential’s chronic illness rider does offer fantastic financial protection and is an alternative for someone who wants some “what if” insurance, in case you are diagnosed with a chronic illness down the road.
The rider is available for ages 20-80. Issue limits are $100,000 to $5,000,000 face amounts. If the rider is something you want to include on your policy you must elect it at the time of issue. So, what are the advantages of Prudential’s chronic illness rider?
The rider is available on many of Prudential Life’s permanent coverage, including the PruLife Index Advantage UL. The rider meets the definition of accelerated life insurance death benefits under IRC §101(g)(1)(b), which typically allows the chronic illness benefit to be income tax free.
Upon certification that you are chronically ill and that you are not expected to recover, you can submit a claim to the company to begin receiving your benefits. The policy generally requires that you must be unable to perform 2 of 6 activities of daily living or be cognitively impaired in a way that makes you a threat to your health and safety. Once you are deemed eligible for the benefits, you can use the oney for whatever you want, without restrictions on its use.
There is no elimination period. Once Prudential receives proof you are chronically ill you will receive you income benefit the following month. The maximum benefit amount you can take is typically based on a percentage of your death benefit. As long as you are within the IRS per diem limit you can receive 2% or 4% of the death benefit either monthly or through an annual lump sum payment. You can continue to receive benefits until the death benefit reaches $0, you request the benefits stop, or you are not re-certified annually as chronically ill.
Additionally, if you are diagnosed terminally ill, you can receive a one time lump sum payment if you are diagnosed as having 6 months or left to live (12 months in California).
Prudential Life Insurance Review Conclusion
Prudential is a fantastic company and provides many beneficial poicies and riders. In addition, it is an excellent choice for certain underwriting niches regarding health and lifestyle, often providing the lowest premiums within certain categories. But the question of whether or not Prudential Life Insurance is right for you comes down to your specific needs, goals and lifestyle. Only by having a conversation with you can we determine which company will be the right fit.
Do you have questions or would you like to see a Prudential illustration or an illustration for any of the other companies we represent? Give us a call today for a free life insurance consultation with an advanced markets professional.