Fidelity Life Insurance Review
AM Best Rating
Term, Permanent, Accident
Few life insurance companies have been in existence for over a century. Fidelity Life Association stands among that rare class, as a company who has excelled earning a reputation as a reliable insurer.
If you are researching Fidelity, you have likely been contacted by an agent of E-Financial, the company whom Fidelity offers their life insurance through.Together Fidelity Life Association and E-Financial leverage technology to create some of the most unique product offerings in the market. E-Financial isn't exclusive to Fidelity, they operate as a brokerage offering other major insurers such as Mutual of Omaha, TransAmerica, and AIG all of which landed a position on our best life insurance companies list. That means you are highly likely to be paired with coverage that meets your needs specifically although, you may feel a nudge from them to pick Fidelity as your provider. In this review we will cover Fidelity's background, financial ratings, product offering, and strenghts and weaknesses as a life insurer.
Fidelity Life is financially stable, reliable, and has been in the insurance business for over 100 years. The company offers excellent term life plans, which do not involve a medical exam and are affordably priced. If you are a senior looking for a whole life policy, you have plenty of options as well.
If you are a young person looking for a whole life policy or a universal life policy, Fidelity Life is not the right life insurance provider for you. Similarly, if you have serious health issues, you are unlikely to qualify for any of the company’s policies. So, you are better off choosing an insurance company which is known to approve high-risk applicants.
History and Background
Fidelity Life started its journey in the insurance industry in 1896. It started off as a fraternal benefit society called the Mystic Workers of the World, which was founded with the aim of providing life insurance coverage for middle class families in the Midwest region and Northern States.
Within two decades of its inception, Mystic Workers of the World had issued life insurance policies worth $100 million.
The company grew from strength to strength in the following years and steadily expanded its presence in the country. By 1929, the company had managed to increase its assets by 100%. In 1930, the company’s name was changed to Fidelity Life Association.
In 2009, Members Mutual Holding Company, which is the parent organization of Fidelity Life, acquired eFinancial, which specializes in direct-to-customer sales and distribution strategies.
The expertise of eFinancial and the strength of its independent agent network have allowed Fidelity Life to effectively market its products to its customer base across the country (except in New York and Wyoming).
Fidelity's Financial Strength and Ratings
Fidelity Life has an A– rating from A.M. Best (1), which is one of the most trustworthy and widely recognized credit rating agencies in the world. It is an excellent rating which indicates the company’s ability to meet its obligations.
Fidelity Life has $122 million in statutory capital and surplus and has assets worth over $400 million. The company has issued life insurance policies worth $32 billion and ranks among the top 10% of the US life insurance industry in terms of risk-based capital ratio(2).
The impressive numbers aside, the financial strength of Fidelity Life can be gauged from the fact that the company managed to maintain a robust growth rate and increase its assets by 100% in 1929 – when the country’s economy was devastated by the Great Depression.
It is undoubtedly a testament to the company’s strong fundamentals, pragmatic approach towards investing, and unflinching focus on long-term growth.
Fidelity's Life Insurance Products
Let us now take a look at Fidelity Life’s product range.
Term Life Insurance
Fidelity Life offers three different term life policies – RAPIDecision Life, RAPIDecision Express, and RAPIDecision Senior Life Term.
This is a uniquely designed level-premium policy from Fidelity Life, unlike any other term life product available on the market today. You can apply for the policy and get qualified within 24 to 48 hours – without having to go through a medical exam.
You are only required to answer a set of questions regarding your health condition, lifestyle, and family medical history.
The company uses a highly sophisticated underwriting method to analyze your health and lifestyle data and determine your insurability instantly.
The policy combines two types of coverage: regular life coverage and accidental death coverage. If you pass away due to natural causes, your designated beneficiary receives a death benefit, which comes from the life coverage portion of the policy.
If you die in an accident, your beneficiary receives an additional benefit, which comes from the accidental death coverage portion of the policy.
The policy allows you to increase the life coverage component by undergoing a medical exam within the first six months of your coverage period. Based on the results of the exam, one of the following two things can happen.
- If you are in good health, the company will increase your life coverage and reduce your accidental death coverage proportionately.
- If your health condition is worse than expected, you can retain your existing blend of life coverage and accidental death coverage.
You can also choose to not undergo the exam at all, in which case you can retain the blend of life and accidental death coverage (which was originally issued to you) for the entirety of your policy’s term.
In other words, undergoing a medical exam is a net positive for you, irrespective of the results. If the results are good are better than expected, your life coverage will increase. If they are worse than expected, you can retain the same amount of life coverage that you were issued.
This is a level premium, level death benefit term life policy from Fidelity Life. You can choose from four different term lengths – 10, 15, 20, and 30 years. Once the level-premium period is over, you can choose to have the policy renewed on a yearly basis – until the age of 94. The premium is set to increase with every renewal.
The most important feature of the RAPIDecision Express policy is that it does not involve a lab test, physical examination, or even a phone interview.
Thanks to the company’s fast-tracked Rapid App application process, all you need to do is to answer questions regarding your health and lifestyle. Once you do, you can get approved within a span of a few days.
Two optional riders are available with the policy – dependent child rider and accidental death benefit rider.
Dependent Child Rider – It provides coverage for young children. The maximum amount of coverage available is $25,000. It is set to expire when the child reaches the age of 23 or when you reach the age of 65, whichever is earlier.
Accidental Death Benefit Rider – It provides your beneficiary with an additional death benefit if your death is caused as a result of an accident. The death benefit amount can range from $25,000 to $250,000. It is set to expire when you turn 80.
RAPIDecision Senior Life Term
This is a term life policy available for people between the ages of 50 and 70 years. The coverage amount ranges from $10,000 to $150,000 and the term length can be 10, 20, or 30 years.
The policy provides you with partial life coverage for the first three years and full coverage from the fourth year. In other words, your designated beneficiary is eligible to receive the full death benefit payout only from the fourth year.
The policy generally does not require you to go through any exams. Your insurability is determined based on your responses to the questions asked and your health and lifestyle data collected from public sources.
In some cases, however, you might be asked to undergo an exam, depending on your medical history.
Permanent Life Insurance
Fidelity Life offers three permanent life policies – RAPIDecision Senior Life Whole Life, RAPIDecision Final Expense, and RAPIDecision Guaranteed Issue.
RAPIDecision Senior Life Whole Life
This is a whole life policy available for people between the ages of 50 and 85. The coverage amount ranges from $10,000 to $150,000 and the policy is set to expire at the age of 121. The policy offers you partial coverage for the first three years and full coverage from the fourth year onwards.
There is a cash value component, which you are allowed to access from time to time for your financial needs.
This is a no exam policy and the insurability of the applicants is determined based on their answers to health questions and the data gathered from public sources. Occasionally, applicants might be asked to go through an exam, depending on their medical history.
RAPIDecision Final Expense
This is a final expense policy available for people between the ages of 50 and 85. The coverage amount ranges from $5,000 to $35,000. The coverage starts as soon as you are approved and the premium and the coverage amount do not change for any reason. The policy does not require you to go through a medical examination.
RAPIDecision Guaranteed Issue
This is a guaranteed issue policy available for people between the ages of 50 and 85. The maximum amount of coverage available is $20,000.
There is no need for you to answer any health questions or undergo exams. You can get qualified irrespective of your health status.
The policy offers partial life coverage for three years and full coverage from then on. The premium is guaranteed to remain unchanged for the entire coverage period.
Accidental Death Benefit Policy
This is an accidental death benefit policy available for people between the ages of 20 and 59.
The coverage amount ranges from $100,000 to $300,000. If you die in an accident at any point before the age of 70, your beneficiary will receive the full death benefit payout. After the age of 70, your policy’s death benefit is reduced by 50%. The policy is set to expire when you reach the age of 80.
Let us now discuss the strengths and drawbacks of Fidelity Life as an insurer.
No Medical Exam
Fidelity Life’s innovative Rapid App application process does not involve lab tests, physical exams, or phone interviews.
Your insurability as an applicant is determined based on your responses to a set of health questions. The process is quick, hassle-free, and transparent. You can get approved within 48 hours in most cases, which is much faster than the industry average.
Fidelity Life’s policies are affordably priced and can fit into the budget of middle class and lower-middle class people. Term life plans start from $10 a month and accidental death benefit coverage starts from $18 a month.
The company only offers level-premium products, so you are required to pay the exact same amount of premium – month after month, year after year, until your policy expires.
With most other insurance companies, you can expect to pay a higher rate for no-exam policies compared to fully underwritten policies. Fidelity Life, however, is an exception to this rule as the company offers no-exam policies at very reasonable rates.
30-Day Free Look Period
The company offers a 30-day ‘free look’ period for its term life as well as whole life customers. If you are not satisfied with the policy you purchased for any reason, you can cancel it within the free look period and get your money back – no questions asked.
Excellent Products for Senior Citizens
Fidelity Life offers four different policies for people over the age of 50 – a term life policy, a whole life policy, a final expenses policy, and a guaranteed issue policy. There is no need for any exams and your policy is issued within 48 hours in most cases.
Not Ideal for People with Health Problems
If you have serious health issues, you are unlikely to qualify for most of the products from Fidelity Life.
The company’s whole life, final expense, and guaranteed issue policies, in particular, are meant for people who are in reasonably good health and do not have diseases that could significantly increase the mortality risk.
No Whole Life Insurance for Young People
Fidelity Life’s whole life policies are only meant for people aged 50 or older.
No Convertibility Option
Fidelity Life’s term life policies cannot be converted into permanent life policies. It is a bit surprising, since most insurers these days offer convertible term life policies.
No Universal Life Policies
Fidelity Life does not offer any universal life policy, which is a significant downside.
- Fidelity AAM Best Rating - Available from: http://news.ambest.com/presscontent.aspx?refnum=26177&altsrc=9
- Fidelity Financial Strength - Available from: https://www.fidelitylife.com/About/Financial-Strength