Guardian Life Insurance Company of America Review
B.A. Risk Management
Life Insurance Agent
The Guardian Life Insurance Company of America, commonly referred to as Guardian Life or Guardian, is a Manhattan, New York based mutual life insurance company.
Guardian offers a wide array of financial products that are designed to fit the different segments of the market. Guardian offers many insurance plans such as life insurance, dental insurance, disability insurance, workplace benefits, vision insurance, and more.
In this review, we take an in-depth look at Guardian Life, its background, financial ratings, and the policies it offers.
About Guardian Life
In 1860, Hugo Wesendonck, a refugee from Germany, joined hands with 21 other German refugees to establish the Germania Life Insurance Company of America. In 1918, the name of the company was changed from Germania to Guardian Life.
In 1925, Guardian Life became a mutual insurance company, in which the policyholders are also the owners and the profits are shared among them in the form of dividend payments.
Founded with an equity capital of $200,000, Guardian is an $8 billion enterprise today. The company employs more than 9,000 people in the US alone.
They offer securities products and advisory services through Park Avenue Securities LLC (PAS), a registered broker-dealer and investment adviser.
Guardian Life is rated highly in comparison to other insurers. The company’s ratings have been very consistent over the years, which is certainly a testament to its financial security and its capacity to honor its commitments. Given below are the current financial ratings of Guardian Life.
- A.M. Best: A++
- S&P: AA+
- Moody’s: Aa2
- Fitch: AA+
- Comdex: 98
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Term Life Insurance
Guardian Life offers a standard term life insurance policy with the usual range of terms (10-30 years).
These are standard term policies, which means you and your loved ones are protected for the entire length of the term, and your designated beneficiary stands to receive the death benefit payout if you were to pass away while the policy is still in effect.
It is a level premium policy, which means the premium you have to pay does not change until the policy expires. You have the option to convert your policy into a permanent life policy at any point during the policy’s term.
If you are a new applicant, you can choose the automatic conversion option, which converts your policy into a permanent life insurance policy when the initial coverage comes to an end.
The best part about Guardian Life’s convertibility option is that you are not required to undergo a medical exam to make the conversion.
Guardian Life offers a waiver of premium rider, which can be a poignant addition to the term life insurance policy.
The rider comes into effect if you are not able to pay your premiums due to an injury, illness, unemployment, or any other reason approved by the company. It ensures that the policy remains active for the rest of the term even if you do not make any further payments.
If you are the only working member of your family and if you do not have any secondary source of passive income, it might be an astute idea for you to add the Waiver of Premium rider to your term life policy.
Whole Life Insurance
Guardian Life’s whole life insurance offers a death benefit and living benefits like cash value. The death benefit is the amount of money your designated beneficiary is legally entitled to receive in the event of your demise. The living benefits include a cash value account and dividend payments.
A portion of the premium you pay is allocated to the cash value account, which is designed to grow at a steady rate irrespective of the performance of the market. The rate of interest is determined by the insurance company and specified at the start of the term.
You can access the money in your cash value account by taking out a loan, which you are required to repay with an interest.
If you borrow against your cash value on the 10th year of the policy or any time after that, the company allows you to choose between the fixed interest rate and variable interest rate.
Being a mutual insurance company, Guardian Life pays dividends to its policyholders depending on its yearly earnings and profits. While it is not guaranteed, the company has a spectacular record when it comes to dividend payments.
Since 1868, Guardian has shared its profits with its policyholders every single year. It has never failed to pay dividends in the past 150 years.
It is an incredible achievement, considering the massive downturns, crashes, and recessions the country has faced in the past century. So, as a Guardian whole life policyholder, you are virtually guaranteed of dividend payments every year.
Index Participation Rider
Guardian Life offers a unique rider called the Index Participation Feature (IPF) to its whole life policyholders.
IPF allows you to link a portion of the money in your cash value account to an S&P 500 index fund. The growth of the account depends on the performance of the fund.
Apart from the index participation rider, Guardian Life also offers a disability rider as well as a critical, chronic, and terminal illness rider, which are designed to make sure you stay protected even during times of financial instability caused by injuries and illness.
No Tax Burden
One of the advantages of the living benefits offered by Guardian Life’s whole life policy is that they are not taxable. The money you borrow against your cash value account and the dividends you are paid yearly are not included in your taxable income.
Whole Life Insurance for People with HIV
Guardian Life offers a whole life policy specifically designed for people who are diagnosed with HIV. To qualify for the policy, a person must be between the ages of 20 and 60, should not have any AIDS-defining illnesses, should be on antiretroviral therapy, and should be under the direct care of an HIV specialist.
Universal Life Insurance
Guardian Life’s universal life insurance policy consists of two parts – a death benefit and a built-in cash value account. A portion of your premium payment contributes to the cash value account, whose rate of interest is determined by the company.
Guardian’s universal life policy offers lifelong coverage, which means the policy remains in effect until your death, as long as the policy doesn't lapse. The policy also allows you to take out loans against the cash value from time to time to meet your financial needs.
Perhaps the biggest advantage of Guardian’s universal life policy is the flexible premium payments. There is no fixed amount that you have to pay on a monthly or yearly basis. You can reduce or increase the premiums depending on your financial condition.
If you are self-employed or if you run a small business, the amount of money you earn is likely to fluctuate from one month to another. In which case, you can increase or decrease your premium payments depending on your income or profits monthly.
Similarly, if you are stretched thin due to various reasons – the birth of a child, quitting your job to start a new career, investing in a new business, or buying a house – you can lower your premiums to reduce your overall financial burden.
Guardian Life offers several riders for its universal life insurance policyholders including spousal coverage (extending life coverage to your spouse), illness care (accessing the death benefit to pay for the costs of treating a chronic, critical, or terminal illness), and long-term care (paying for long-term care in a nursing facility), and more.
Depending on your needs, you can add one or more of these riders to your policy for enhanced protection throughout your lifetime.
Variable Universal Life Insurance
Guardian Life’s variable universal life policy shares three common features with the company’s universal life policy.
- It offers lifetime protection and expires only in the event of your death.
- It offers a flexible premium payment schedule, which means you are allowed to raise or lower your premiums as you see fit – within the limits set by the company.
- It offers a death benefit (which is guaranteed and not subject to income tax) and a cash value account.
The only difference is that a variable universal life policy offers you the choice of how to invest the money in the cash value account. The company offers you many investment options and you can choose to invest the money any way you want, depending on your financial goals and risk tolerance.
Since the growth of your cash value account is tied to the stock market, you can expect higher returns on your investment under favorable market conditions and lower returns under unfavorable conditions. So, it’s a prudent idea to talk to a financial advisor before investing your money.
Pros and Cons of Guardian Life Insurance CompanyPros
Guardian is very financially stable. It is backed by solid assets and cash reserves, so its ability to honor its financial commitments cannot be doubted at all.
Excellent Whole Life Policy
Guardian Life’s whole life policy is among the best permanent life policies available on the market today. You have the option to link your cash value account’s growth to an index fund, which can potentially lead to faster growth.
Moreover, the company regularly pays dividends, even though they are not guaranteed. So, in terms of financial benefits, Guardian’s whole life policy scores much better than the policies of most other companies.
The company’s representatives are very responsive and are always willing to help you with any issue related to the policy. You can even ask the agents for their expert opinion on your policy choice and tell you if you have made the right choice.
According to the National Association of Insurance Commissioners, Guardian Life had a complaint score of 0.07 in 2017, which is lower than the median complaint score of 1.
So, the company ranks above most of its competitors in terms of customer satisfaction.Cons
Expensive Term Life Insurance
Guardian’s term life policies are more expensive compared to the term policies offered by many other companies.
Guardian Life is known for its conservative underwriting policies. If you use tobacco (smoking or chewing), have a dangerous occupation (miner, firefighter, or crane operator), have dangerous hobbies (skydiving, mountain climbing, or racing), or have DUIs on your record, you are likely to be moved to a more expensive risk class.
Is Guardian Life the right choice for you?
Guardian Life is one of the most established names in the industry today, having been in business for more than 150 years. It is financially very stable and receives excellent ratings consistently.
If you are looking for a whole life policy, Guardian Life is a solid choice. If you need a term life policy, you might want to look at some of the other options available.