Bankers Life Insurance Review
B.A. Risk Management
Life Insurance Agent
Bankers Life is one of the oldest and most well-known insurance companies in the United States. Based in Chicago, Bankers Life Insurance Company has a nationwide presence and employs a large network of agents to sell its term life and permanent life policies to customers all over the country. Like many life insurance companies, Bankers Life is owned by a parent holding company that owns similar companies in the life insurance space. Bankers is a subsidiary of CNO Financial Group which is a reputable Fortune 1000 company.
Like other insurance companies, they have a target market that they happen to be very competitive in. Find out below more about Bankers’ policies and coverage and learn what type of policyholder is the best fit for this company.
Bankers Life Insurance has a sweet spot in the market. Those who happen to fit inside this targeted niche are very satisfied with it in terms of rates and coverage. The target market best suited by a Bankers policy is very close to retirement or the age of retirement.
About Bankers Life
AM Best Rating
Term, Whole, Universal
The journey of Bankers Life and Casualty Company started in 1879, when its predecessor, the Hotel Men’s Mutual Benefit Association, was established. The company was acquired by noted businessman and philanthropist John D. MacArthur in 1935.
MacArthur, who was a keen observer of the manufacturing sector was impressed with the mass marketing strategies used by American manufacturers and decided to employ the same strategies to sell insurance. He made insurance products more affordable for people from middle-income households and widened the company’s customer base greatly.
Today, Bankers Life operates as a wholly-owned subsidiary of CNO Financial Group, which is a Fortune 1000 company with $30 billion in assets. Apart from life insurance, the company also offers long-term care insurance, supplemental health insurance, and annuities.
- A.M. Best: A- (Excellent)
- Moody’s: Baa1 (Medium Grade)
- Standard & Poor’s: BBB+ (Adequate)
- Fitch: BBB+ (Satisfactory)
- Comdex: 56
Bankers Life, Colonial Penn, and Washington National are all owned by CNO. They share one financial rating and long-term financial outlook based on the financial strength of CNO as a whole.
This does matter in the insurance industry, especially considering there are other companies which have received ‘A’ ratings from all four agencies consistently.
Policies Offered by Bankers Life
Term Life Insurance
Bankers Life offers a traditional term life policy which provides coverage for a specific time. Available terms include 5-year, 10-year, or 20-year policies. A variety of term options is one of the best features a term life policy can offer. The insured chooses the coverage period, which means he or she only pays for what they need. The policy offers a fixed death benefit, which remains unchanged throughout the coverage period. If the insured passes away while the policy is in force, the beneficiary will receive the death benefit.
This is a level-premium plan, which means premiums stay the same as the years go by. The price of the premium at the start of the coverage period is the same price when coverage ends. This makes planning monthly and yearly budgets simple and eliminates the worry of sudden and unexpected increases in premium payments.
This policy is affordably priced and is far cheaper than a permanent life policy. Non-smokers who happen to be in good health can qualify for the lowest risk class and get sufficient coverage at extremely competitive life insurance rates.
Whole Life Insurance
Bankers Life’s whole life policy is designed to provide lifetime coverage. If the premium payments are made on time, policyholders never have to worry about the coverage ending at any point in their life. One of the biggest advantages of buying a whole life policy is the policyholders do not have to worry about insurability anymore, as is not the case with a traditional term life policy.
The Insurability Conundrum
If a male buys a 30-year term life policy at the age of 30, when it expires, he will be 60. Now, at this point, if he is in a financially secure position, he might not need life insurance anymore, in which case he is very fortunate. If, on the other hand, he still needs life insurance at 60, he will have to apply for a new policy. He might, however, find it difficult to qualify for a policy, owing to age and any health problems that might have developed in the meantime.
With a whole life policy, this problem is avoided entirely. Once the policy is purchased, it remains in effect until the insured’s death. As long as payments are made, these policyholders never have to worry about applying for another policy in their lifetime. Just like the company’s term life policy, this one too is a level-premium policy, which means the amount of premium paid remains the same throughout the policy’s term.
Living Benefits Offered by Cash Value Component
The most important feature of a whole life policy, and the reason why many people prefer it over a term life policy, is the built-in cash value account. It is similar to a savings account. A portion of the premium is deposited into the cash value account on a regular basis, and the account grows in value by accruing interest at a fixed rate, which is determined by the insurance provider. This cash value account is like a contingency fund. In case of an emergency, the policyholder can borrow the money against the policy’s cash value. The important thing to note here is a cash value loan is similar to a regular loan in that the borrower must pay it back with interest. Otherwise, the principal amount plus interest will come out of the policy’s cash value. This ultimately will cause a decrease in the death benefit payout of the policy.
Universal Life Insurance
Bankers Life’s universal life policy offers a lifetime of protection for the lifetime of the policyholder, who does not worry about leaving dependents in a financial pinch in the event of his or her untimely death. Also, this policy has a cash value account which steadily grows in value all through the coverage period. The insurance provider sets the interest rate for the account, and it is a guaranteed rate of interest, which means it is paid regardless of the company’s performance or market conditions.
Policyholders may borrow against the policy’s accumulated cash value, should the need arise, and repay it with interest. The interest rate charged by the insurance company is usually lower than a typical interest rate on a traditional loan charged by banks and other lending or financial institutions. The money in the cash value account can go toward premium payments, as well, though smart policyholders are conservative and conscientious about not depleting the policy’s cash value. If the cash value account does not have sufficient money to meet the minimum limits set by the company, the policy could lapse. Thus, a policy’s cash value should be reserved for use only in case of an emergency.
Perhaps the biggest advantage of a universal life policy is the option to choose the amount of premium to pay on a monthly or yearly basis. If funds are short, pay the minimum amount, which is set by the company. If an unexpected bonus or incentive comes in, opt to pay more.
Living Benefits Option
The living benefits option can be particularly beneficial for families with a single breadwinner. In the absence of such an option, the primary earner developing a chronic illness might be difficult for the family. If the breadwinner has a regular life insurance policy which does not cover such expenses, the family might have no other option but to use savings to pay for the treatment. In some cases, they might be forced to sell their possessions as well. With the living benefit option, medical expenses are paid for without passing on the burden to loved ones. If the insured passes away after having made use of the living benefits option, the beneficiary receives what remains of the death benefit amount.
Long-Term Care Insurance
Bankers Life offers two types of long-term care insurance policies—-facility-only policy and comprehensive policy.
Facility-only policy, as the name indicates, pays for long-term care expenses if the policyholder is institutionalized in a nursing home or an assisted living facility.
Comprehensive policy, on the other hand, covers the expenses associated with long-term care, regardless of where the policyholder is. Whether bedridden at home and cared for by family members or institutionalized, this policy covers those expenses.
Pros and cons of Choosing Bankers Life as Your InsurerPros
- The company offers traditional term life and whole life policies which are designed to meet a variety of financial needs.
- While there are no standout features or benefits, these policies can be a good choice for those who need a pure term or whole life product without too many add-ons or riders.
- The company’s best offering is its universal life policy, which includes a living benefits option. Knowing the policy’s death benefit is accessible in case of a chronic disease diagnosis, can provide an added layer of security.
- The company’s long-term care policy is an excellent choice for senior citizens. The choice between the cheaper facility-only policy or the slightly more expensive, but very comprehensive long-term care policy, is available.
- The company offers free consultation services for anyone who is looking to buy life insurance, long-term care insurance, health insurance, or annuities. Applicants can talk to a knowledgeable agent, who can suggest the right product based on the client’s needs and financial situation.
- Bankers Life has a ‘B’ rating from all the major credit rating agencies. As mentioned, while this is not a bad rating, it does, however, look average in comparison to companies that boast ‘A’ and ‘A+’ ratings.
- The company does not offer a large selection of policies. The lack of variable universal life insurance and an indexed universal life policy is certainly a downside, especially for someone looking to get higher returns on their investment.
Is Bankers Life the Right Choice for You?
Bankers Life is an established name in the industry. The company has been around for more than 100 years, which should instill a sense of trust in anyone who is looking to buy a policy from them. Whether or not this company is a good fit for anyone depends on the individual’s insurance needs. If just a pure term life policy or a traditional whole life policy is needed without any additional features or benefits, Bankers may be a good fit. By comparing the free, personalized quote available from the company with the rates offered by other companies for similar policies, shoppers can make a more knowledgeable decision.
If, on the other hand, a policy with more coverage options and features is preferred, there are several other options available. Especially for those in need of a variable universal life policy or an indexed universal life policy, as Bankers Life does not offer these products.