5 Best Life Insurance Companies with Living Benefits

Transamerica , Nationwide offer best life insurance benefits .

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In today’s ever-evolving financial landscape, life insurance isn’t just about providing a safety net for your loved ones after you’re gone. It’s also about ensuring that you can enjoy certain benefits during your lifetime. Living benefits, also known as accelerated death benefits, allow policyholders to access a portion of their life insurance benefits while still alive under specific circumstances, such as terminal illness or critical illness. If you’re considering life insurance with living benefits, Transamerica and Nationwide are two top-notch companies to explore.

“Living benefits” is a catch-all term that often refers to the ability to use some of the death benefits before death, such as if you have a terminal, chronic, or critical illness. But it may also describe any feature you can use during life, such as a permanent policy’s cash value, an income benefit for a disability, or wellness perks.

To choose the best life insurance companies with living benefits, we looked at the top life insurance providers that offered living benefits, either automatically or through riders. We graded them based on financial strength and quality ratings, as well as their policies, living benefits riders, and other features. Pricing, customer service, and restrictions also factored into our rankings.

Best Life Insurance With Living Benefits of 2023

Best for cash value growth: Transamerica
Best advantages to younger life insurance buyers : Nationwide
Best for Term Life Insurance: Pacific Life
Best No-Exam Life illustrator: Prudential
Best for Gen X & Millennial: Mutual of Omaha

1. Transamerica

A.M. Best’s A+ [Excellent]

Transamerica has been a trusted name in the insurance industry for over a century. They offer a range of life insurance products that come with robust living benefits.

Cash value life insurance buyers will appreciate Transamerica’s reliable policy illustrations. It earned top marks in this category. The company offers top-notch benefits in its Trendsetter Living Benefits term life policy, such as the ability to access your own death benefit early if you develop a chronic or critical illness.

Here’s why Transamerica stands out:

Comprehensive Living Benefit Riders: Transamerica offers multiple living benefit riders, including critical illness, chronic illness, and terminal illness riders. These riders allow you to access a portion of your death benefit if you’re diagnosed with a covered condition while still alive.
Flexible Policy Options: Transamerica’s policies are customizable to suit your specific needs. Whether you’re looking for term life insurance or permanent coverage, you can find options that provide living benefits.
Financial Strength: Transamerica consistently receives high ratings from independent rating agencies, indicating their financial stability and ability to meet policyholder obligations.

2.Nationwide

A.M. Best’s A+ [Superior]

Nationwide is another well-established insurer known for its commitment to policyholders’ financial security. When it comes to life insurance with living benefits, Nationwide doesn’t disappoint:

Nationwide offers advantages to younger life insurance buyers who can benefit most from policy illustrations that are reliable over the very long term. Nationwide’s policies have generally good historical performance of invested assets in order to grow cash value.

Living Benefits Included: Nationwide includes living benefits on many of its life insurance policies at no extra cost. This provides additional peace of mind without increasing your premiums.
Long-Term Care Coverage: Nationwide’s life insurance policies with living benefits can be used to cover long-term care expenses, allowing you to maintain your quality of life in case you need extensive medical or personal care.
Strong Reputation: Nationwide is recognized for its excellent customer service and financial strength, assuring you that they can deliver on their promises.

Now that we’ve covered Transamerica and Nationwide, let’s explore three more top life insurance companies that offer valuable living benefits:

3. Pacific Life

Pacific Life is renowned for its flexible and customizable life insurance policies. They offer living benefit riders that can be added to their policies, providing financial support in the face of critical illnesses or terminal conditions. Pacific Life’s strong financial ratings underscore their reliability.

For term life insurance buyers, Pacific Life should be on the consideration lists thanks to its low rates.

For cash value life insurance buyers, Pacific Life provides a valuable combination of competitive pricing and reliable illustrations for most of its policies that can maximize your cash value accumulation. The company has also shown good performance of its investments that fuel customers’ cash value growth.

4. Prudential

Life insurance shoppers seeking a high amount of no-exam coverage will enjoy high coverage limit with Prudential’s Term Essential.

5. Mutual of Omaha

Mutual of Omaha offers an impressive combination of financial strength, competitive internal policy costs for its cash value life insurance, and excellent historical performance of its assets. For younger buyers of cash value life insurance, these qualities make Mutual of Omaha a top pick.

Methodology:

To create our list of the best life insurance with living benefits, we started with 10 of the top life insurance providers. We looked for companies that offered living benefits automatically as well as by rider additions. From there, we gathered data through each company’s website, phone calls, and third-party agencies to assess their financial strength and customer satisfaction.

We looked at each company’s history, reputation, financial strength, and nationwide availability. Then we reviewed each provider’s life insurance policies, living benefits riders, and any standout features. Finally, we also compared the process for getting quotes, customer service, pricing, and restrictions.

In conclusion: when shopping for life insurance with living benefits, it’s crucial to consider reputable companies like Transamerica and Nationwide. Additionally, Pacific Life, Prudential and Mutual Omaha offer competitive options with valuable living benefit riders. Always consult with a licensed insurance professional to explore the specific policies and riders that best suit your needs and financial goals. Life insurance is a significant investment, and choosing the right company is a crucial step toward securing your financial future.

Transamerica term life insurance

Term life insurance is a smart choice for people seeking steady rates for a specific time period. For example, if you want life insurance to cover the mortgage if you die and have 20 years left before it is paid off, a 20-year term policy would be an option. You can renew after the level term expires but prepare for a significant increase in premiums.

Term life insurance does not build cash value, and, as a result, it is often the cheapest life insurance to purchase.

Transamerica, included in Forbes Advisor’s best life insurance companies list, offers two term life insurance policies:

Transamerica’s Trendsetter Super Series policy offers a minimum of $25,000 in coverage for terms of 10, 15, 20, 25 or 30 years. You can get up to $2 million in coverage without a medical exam if you qualify.

The Trendsetter Super Series policy includes an automatic terminal illness accelerated death benefit endorsement. You can also further customize this policy with one of four available riders:

Disability waiver of premiums rider
Income protection option
Children’s benefit rider
Accidental death benefit rider

Transamerica’s Trendsetter LB policy was named “Best Overall” in our Forbes Advisor review of the best term life insurance. The policy offers $25,000 to $2 million in coverage with terms of 10, 15, 20, 25 or 30 years. Like the Super Series term policy, qualifying applicants may be able to forgo a medical exam if they are purchasing $2 million dollars or less in coverage.

The Trendsetter policy automatically includes three health-based riders that make a portion of the death benefit available if the insured becomes terminally, chronically or critically ill. Trendsetter LB customers have access to the same optional riders made available through the Super Series policy with the addition of a monthly disability income rider.

Transamerica whole life insurance

If you’re looking for a life insurance policy with a guaranteed death benefit, guaranteed minimum rate of return on cash value and fixed premiums, whole life insurance works as an option for you.

With Transamerica’s Lifetime whole insurance policy, you can purchase between $25,000 and $2 million in coverage.

All policies come with a terminal illness accelerated death benefit rider that pays out a portion of your death benefit if you’re diagnosed with a terminal illness.

You can further customize your coverage by adding one or more of the nine riders currently available. These include a children’s benefit rider as well as an income protection option (IPO) that allows you to control how and when your beneficiaries receive their death benefit.

If you’re considering Transamerica whole life insurance, you can use the company’s iGO e-App to take advantage of its streamlined application process. The company also uses Express Protect Underwriting, making it possible for some applicants to get same-day approval.

Transamerica indexed universal life insurance

Indexed universal life insurance (IUL) is a permanent life insurance policy with an investment-focused approach to cash value accumulation. There are several characteristics that differentiate indexed universal life insurance from other permanent policies:

The policy’s accumulated cash value is linked to the performance of an index, like the S&P 500, meaning the cash value will increase alongside the index. The index’s rate of return is used by the insurance company to determine how much the account should be credited.
Cash value gains and losses generally have a floor (minimum) and cap (maximum) rate at which the cash value can increase, regardless of the market.
Both the policy premium and the death benefit can be adjusted in accordance with the policy terms and conditions.

Transamerica’s Financial Foundation IUL policies are available with coverage between $25,000 and $2 million. The maximum coverage amount of $2 million is only available to individuals between ages 18 and 45. Applicants ages 46 and 55 can apply for up to $1 million in coverage.

The cash value of an IUL policy grows tax deferred and transfers between accounts within a policy are tax free.

Cash value accumulation is based on the three primary indexes: S&P 500, EURO STOXX 50, and the Hang Seng Index. The portion of premiums invested in the index funds can be allocated to three separate account options:

Basic Interest Account, which is the annual interest rate determined by the insurer. It has a 2% floor but does not have a cap.
Global Index Account, which has a 13% cap and a 0.75% floor
S&P 500 Index Account, which has a 12% cap and 0.75% floor

Financial Foundation IUL policies include a terminal illness rider. You can choose to add other riders, including a base insured rider or the Concierge Planning Rider. The Concierge Planning Rider is exclusive to the Financial Foundation IUL. It provides help with funeral planning, access to tools that can help draft wills and document storage services.

Transamerica’s Financial Choice IUL is a new policy created for those with high income who seek flexibility and the potential for tax-free supplemental income. Cash value accumulation is based on the performance of a variety of domestic and global index options. The minimum coverage amount is $250,000, and your cash value can be invested in various index options:

Basic Interest Account, which has a rate declared by the insurer but cannot go below 1%.
Fidelity Small-Mid Multifactor Index Account, which is uncapped and has a .25% floor.
Global Index Account, which has a 10.75% cap and a .25% floor.
S&P 500 Index Account, which has a 9.5% cap and a .25% floor.
Global Plus Index Account, which has a 14% cap and a .25% floor.
S&P 500 Plus Index Account, which has a 12% cap and a .25% floor.

Nationwide Life Insurance

Types of Life Insurance Sold by Nationwide

Term life
Whole life
Indexed universal life
Guaranteed universal life

Nationwide’s term life insurance

Term life insurance is life insurance that offers steady rates for a level term period. For example, if you want life insurance to cover income replacement if you die and have 20 years left before retirement, a 20-year term policy would be an option. After the level term expires, you can renew or buy a new policy, but you should prepare for a significant increase in premiums.

Term life insurance does not build cash value and, as a result, it is often the cheapest life insurance policy type to purchase.

Nationwide YourLife Guaranteed Level Term is Nationwide’s term product offered in level terms of 10, 15, 20 or 30 years for buyers ages 18 to 70 (age limits depend on term length). After the level term period, renewing annually at a higher premium, up to age 95, is an option. The minimum coverage amount is $100,000.

If you decide to convert the term policy into a permanent policy, Nationwide allows you to do that up to age 65. If the coverage is of equal or lesser value, no additional medical exams or underwriting will be required for the term life conversion.

Nationwide’s guaranteed universal life

Guaranteed universal life insurance offers the potential for flexible premiums and death benefit amounts, up to specified limits, but the ability to accumulate cash value could be minimal. Since policyholders can expect minimal gains from this type of life insurance, it is usually cheaper than other universal life products.

Nationwide No-Lapse Guarantee UL II is Nationwide’s universal life insurance option targeted for affluent clients with low risk tolerance. It is available to people up to age 85 and with a minimum face amount of $100,000. This low-risk product comes with two no-lapse guarantees, one for the initial period and one for an extended period that can be customized to up to age 120.

Nationwide’s whole life insurance

Whole life insurance works as an option for people looking for a low-risk life insurance policy with fixed premiums and guaranteed cash value accumulation.

Nationwide Whole Life 100 is one of three whole life products sold by Nationwide and is available to people ages 0 to 80. Minimum face amounts range from $10,000 to $250,000 depending on your health classification, which the insurance company determines. You can continue paying fixed premiums on Whole Life 100 until you reach age 100. You are guaranteed the full death benefit if you die unless you have borrowed or withdrawn against the cash value. In that case, the death benefit is reduced by whatever you owe. If you make it to age 121, Nationwide will pay out the death benefit and cease coverage.

Instead of fixed premiums until age 100, Nationwide 20-pay Whole Life offers a guaranteed death benefit if you pay the fixed premium for the first 20 years and take no withdrawals or loans against the cash value.

Nationwide Simplified Whole Life is an option for people who have purchased an eligible Nationwide auto and/or homeowners insurance policy. It offers basic protection between $10,000 and $50,000, a simplified application and no medical exam requirements.

Nationwide’s indexed universal life insurance

If you’re looking for a death benefit that will grow with an index, like the S&P 500, indexed universal life insurance (IUL) is an option. This type of life insurance links your cash value to an index. It includes participation rates, caps and floors that may keep the policy from the biggest gains and losses.

IULs also offer the flexibility to vary premiums and death benefits and take withdrawals or tax-free loans against the cash value. However, keep in mind that if your cash value gets too low to cover policy expenses and fees, the IUL policy could lapse.

Nationwide Indexed Universal Life Accumulator II is a life insurance product focused on cash value accumulation and available to buyers ages 18 to 85. It is offered with a minimum $100,000 face amount and two cash accumulation investment strategies. You’ll have the option of a fixed interest strategy with a guaranteed minimum interest rate of 1%. Or, for a higher risk option, you can choose an indexed strategy tied either to the performance of the S&P 500 or a combination called the Multi-Index Monthly Average, including S&P 500, Nasdaq-100 and the Dow Jones Industrial Average.

The IUL Accumulator II includes a participation rate of 100%, a floor rate of 0% and a cap between 9% and 13%, depending on the investment strategy you choose.

A participation rate is the percentage of the index performance used to calculate your interest crediting rate. For example, if the participation rate is 100%, then 100% of the index gain will be credited to your cash value, up to your cap rate.

A floor rate is the guaranteed minimum rate that protects your cash value from loss, no matter how the market performs. Your loss can’t dip below this amount, so it is called a “floor rate.”

Nationwide also offers an IUL focused more on protection than accumulation called the Nationwide Indexed Universal Life Protector II.

Nationwide’s variable universal life insurance

Variable universal life (VUL) insurance comes with various features, including cash value investments with sub-account choices, the flexibility to vary premium amounts and frequency of payment and death benefit options.

This permanent life insurance is intended to stay in place throughout your lifetime. VUL insurance includes the ability to borrow tax-free or withdraw from your cash value but can lapse if your cash value gets too low to cover policy expenses and fees. VUL insurance policies typically include significant fees and are best suited for people comfortable with higher risk because of the investment component.

Nationwide Variable Universal Life Accumulator is available to buyers up to age 85 with a minimum face amount of $100,000. Its main purpose is cash value accumulation. Policyholders can choose from three investment strategies: the S&P 500 Annual Point-to-Point, One-Year Uncapped S&P 500 Point-to-Point, and a Multi-Index Monthly Average that combines the S&P 500, Nasdaq-100 and Dow Jones Industrial Average. The cap rate, participation rate and floor depend on which investment strategy you choose. For example, if you go with the S&P 500 Annual Point-to-Point, the participation rate is 100%, the cap rate is 8.5% and the floor is 1%.