Minnesota Life is one of those top rated companies that you don’t hear much about in the mainstream but that has quietly put together an awesome product line, particularly for anyone interested in coverage beyond the run of the mill basic term life coverage. In this Minnesota Life review we will examine the company’s history, strong ratings, life insurance policies, and the special features offered.
Review of Minnesota Life Insurance Company
When seeking out the best cash value life insurance it is imperative that you familiarize yourself with the different carriers in the marketplace before you make a decision on any specific company.
Our primary goal is to equip you with the knowledge and insight you need to make the best, most informed decision on one of the most important decisions you will face.
About Minnesota Life
Minnesota Life is part of the Securian Financial Group, Inc., a holding company in which Minnesota Life is the largest of its affiliates.
Minnesota Life is available in all states except New York. For New York residents, policies are offered through Securian Life Insurance Company. So if you are a New York resident, you still have access to these top of the line life insurance products.
Minnesota Life itself has been in business for over 130 years. The company was the first life insurance company in Minnesota, originally founded as the Bankers Association of Minnesota. The company changed its structure to a mutual company under the new name of Minnesota Mutual Life Insurance Company.
The company changed its name to Minnesota Life Insurance Company in 1998. So the question that often arises…
So is Minnesota Life a Mutual Insurance Company?
Well, who better to explain that then the company itself? Here is what the company has to say:
The members of Minnesota Mutual Companies, Inc. collectively own the mutual holding company, the ultimate parent company of Minnesota Life Insurance Company, which is a stock subsidiary but is not publicly traded. No one, including members of management and the Board of Directors, has been issued any stock.
So it appears that Minnesota Life has retained its mutual company status in a roundabout way, although I don’t think it is entirely accurate to make the statement that Minnesota Life is a mutual insurance company in the classic sense.
Should that matter to you?
Most likely it will have zero consequences either way. The good news is the company’s flagship whole life policy is a participating policy, meaning it pays annual dividends to policyowners. At the end of the day that is really the most important thing to keep in mind for those concerned with a company’s mutual status.
Minnesota Life Insurance Company Ratings
The company, under the Securian Financial Group banner, boasts some great ratings from every major rating agency.
As of February 2017:
- A.M. Best rating A+, Superior
- Fitch rating AA, Very Strong
- Moody’s Investor Service Aa3, Excellent
- Standard and Poor’s A+, Strong
- Comdex Rating 92
Securian Financial Group has nearly $1.2 trillion of insurance in force. There are $70.5 billion in assets under management. The company’s 2016 revenue was $4.8 billion.
Minnesota Life’s Product Line
Securian Financial Group, Inc., Minnesota Life’s parent company, has an extensive product offering. The company has products and services:
For individuals and families, including:
- Retirement Annuities,
- Investments and
- Trust services
Employee Benefits, including
- Group Insurance,
- Retirement plans and
- Executive benefits
Business Protection, including
- Business continuity strategies and
- Key person life insurance
Life Insurance Policies offered by Minnesota Life
Minnesota Life offers the big three: 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 definitely a clear advantage when considering between term life vs permanent life insurance.
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
Minnesota Life Insurance Policies [Plans and Features]
Minnesota Life Insurance Company, and Securian Life Insurance Company in New York, offer a wide array of life insurance policies, including term, whole and universal life.
Minnesota Life Term Life Insurance
Term life insurance offers an initially low premium, with fixed rates for the life of the term. Securian’s policy issued by Minnesota Life is called Advantage Elite Select. It is term insurance with your choice of 5, 10, 15, 20 and 30 year term lengths.
Minnesota Life’s convertible term life insurance includes the option to convert all or a portion of the policy to permanent coverage prior to the end of the term.
The primary life insurance advantage of a conversion option 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 permanent policy down the road once you become more financially sound.
Chronic Illness Conversion Agreement (CICA): the CICA provides a guarantee that the term policy can be converted to an individual life policy that includes chronic illness benefits, without proof of insurability.
The optional CICA benefit is available for fully underwritten term life policies with face amounts from $250,000 to $5,000,000 for ages 16-60.
The term policy must also include the Extended Conversion Agreement, which allows the term insurance conversion option to extend to the full duration of the term or to age 75.
Indexed Universal Life
Indexed Universal Life (IUL) offers permanent coverage but with flexible premium payments and death benefit. IUL polcies track a market index, such as the S&P 500, providing the possibility for higher returns. The policies typically include a cap and floor, which limits gains but also limits losses.
Minnesota Life has a full suite of fantastic IUL products to choose from. Depending on your need and your specific goals will determine if indexed universal life is right for you, including which IUL policy will help you achieve your goals.
Minnesota Life IUL offerings include:
- Eclipse Index Life
- Eclipse Protector IUL
- Omega Builder IUL
- Orion IUL
For purposes of the Minnesota Life Insurance Company review we will focus on the Orion IUL.
Securian, Minnesota Life’s parent corp, offers WriteFit underwriting, which is a type of innovative accelerated underwriting consisting of a tele-app interview. Thanks to this unique no medical exam life insurance underwriting approach, healthy applicants can be approved indexed universal life within 24 hours. WriteFit is available for ages 0-54 for face amounts up to $250,000.
Orion offers indexed accounts with competitive caps, as well as potential uncapped crediting or a crediting multiplier. Participation rates vary from 90-110% depending on the indexed account you choose.
You can choose different indexed account options from among a fixed account (minimum of 2%), five different S&P 500 Index options, or a Blended Index option consisting of the S&P 500, Russell 2000, Barclays Capital U.S. Aggregate Bond Index and EURO STOXX 50. It must be noted that you are not investing in a market or an index.
Choose from two different death benefit options. Option 1, the death benefit is equal to the face amount. Option 2, the death benefit is equal to the face amount plus the cash value accumulation value, which increases the death benefit.
You can choose from a wide array of riders, called “Agreements”, including:
- Accelerated Death Benefit for Chronic Illness Agreement,
- Accelerated Death Benefit for Terminal Illness Agreement,
- Chronic Illness Access Agreement,
- Corporate Enhanced Values Agreement,
- Early Values Agreement,
- Exchange of Insureds Agreement,
- Guaranteed Income Agreement,
- Guaranteed Insurability Option Agreement,
- Income Protection Flex Agreement,
- Inflation Agreement,
- Overloan Protection Agreement,
- Premium Deposit Account Agreement,
- Surrender Value Enhancement Agreement,
- Term Insurance Agreement,
- Waiver of Charges Agreement,
- Waiver of Premium Agreement
IUL policies have many benefits and offer:
- Cash value accumulation
- Income tax fee death benefit on lump sum payments.
- A guaranteed floor protecting the policyholder from negative crediting, i.e. your index credit will never be less than zero.
- Income tax free policy loans.
- Flexible premiums and death benefit, rather than fixed. Both can be changed. The benefit being that you can make more or less premium payments and lower your death benefit, if you so desire.
Income Protection Flex Agreement (IPA Flex)
The IPA Flex rider is exclusive to the Orion IUL and allows you to customize your death benefit, providing a guaranteed income stream for your beneficiaries and greater cash value accumulation potential. You do not have to choose this rider right away as you can add it to your policy at any time. The original death benefit will still be paid out income tax free and the additional amount paid out to your beneficiary will be reported as interest income.
SecureCare Universal Life
Minnesota Life provides a hybrid long term care life insurance policy under its SecureCare product line. This is a cash indemnity policy, which means you receive cash for many different long term care needs, rather than having to request reimbursement of your long term care costs.
The single premium universal life insurance policy offers three guarantees.
- Guaranteed death benefit payout
- Guaranteed long term care benefits
- Guaranteed return of premium
The policy includes a guaranteed death benefit between the lesser of $10,000 or 10% of the policy face amount. So, even if the entire death benefit is advanced due to long term care needs, the policy will still pay a lump sum death benefit to your beneficiary when you die.
The long term care insurance income benefit is guaranteed if you are diagnosed with a qualifying chronic illness or cognitive disorder. The policy provides a cash indemnity benefit that can be used for many different qualified and covered benefits, including:
The policy also includes guaranteed return of premiums. There is a 6 year vesting schedule. After 6 years you can get 100% return of premium back if you choose, providing great flexibility.
The long term care insurance policy benefit options include 2 or 3 years on the base policy. You can also add an extension of long-term care benefits for a period of 2 or 4 years, which brings the maximum benefit period to 7 years.
An optional long-term care inflation protection is available which helps your LTC insurance benefit grow to keep up with inflation. You can choose from 3% simple, 5% simple or 5% compound interest growth.
Interested in how Minnesota Life’s hyrbid LTC+LIFE insurance policy stacks up to the competition? Give us a call today to speak to a LTC life insurance agent who specializes in life insurance with long term care.
Whole Life Insurance
With Minnesota 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.
Minnesota Life Whole Life offerings include:
- Secure Accumulator Whole Life
- Focused on cash value growth
- Secure Protector Whole Life
- Focused on death benefit protection
Whole Life Guarantees
Among the benefits inherent in whole life insurance are specific guarantees, including:
- Guaranteed death benefit,
- Guaranteed cash accumulation and
- Guaranteed level premiums.
Whole Life Dividends
Additional cash value growth is available through life insurance dividends. Although not guaranteed, Minnesota Life has a solid history of paying participating shareholders dividends.
Dividends are valuable and can be used to:
- Purchase paid up additions
- Pay Premiums
- Earn interest with the company
- Cash Out
- Pay back outstanding policy loan
Additional Benefits of Whole Life Insurance
Whole life offers severeral tax advantages. Among them are:
- Tax free policy loans
- Tax deferred cash value growth
- Tax free death benefit
Tax free life insurance policy loans
You can take out a tax free life insurance policy loan by using your cash value as collateral. Minnesota Life’s loan interest rate is 5%.
Minnesota Life practices direct recognition. When you take out a loan, Minnesota Life adjusts your policy dividends, typically giving a lower dividend on the cash value that currently has a loan against it.
Tax deferred cash value growth
Under IRC 7702, cash value life insurance grows 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
You beneficiary receives the death benefit income tax free. 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.
Minnesota Life Insurance Policy Riders
Please note: this is an overview of many of the riders available. However, the following life insurance riders are not available on all types of policies.
Accidental Death Benefit Agreement – additional death benefit payout if death is due to an accident.
Children’s Term Agreement – term rider for your kids.
Accelerated Death Benefit Agreement – allows access to a portion of your death benefit if you have a life expectancy of 12 months or less due to illness or accident.
Flexible Term Agreement – 10 or 20 year term rider adding additional death benefit
Additional Insurance Agreement – option to buy paid up additional life insurance to increase the policy’s death benefit.
Waiver of Premium Agreement – premium is waived if you become totally disabled before age 60.
Guaranteed Insurability Option Agreement – guarantees the addition of more coverage at certain ages and life events with no evidence of insurability. An additional disability waiver is also available.
Single Premium Paid-Up Additional Insurance Agreement – purchase additional paid up coverage each year to age 90
Income Protection Agreement – provides an irrevocable settlement option, that pays the death benefit over a period of years, which provides for greater cash accumulation and a benefit stream for beneficiaries (rather than a lump sum).
Minnesota Life Review Conclusion
As you can see, Minnesota Life is an excellent life insurance company. There really is not anything negative we can say about this fantastic company.
But in the end, finding the right company for you depends on what you need and why you need it.
Is Minnesota Life the right company for you?
Maybe, maybe not.
Do you have questions or would you like to see an illustration of Minnesota 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.