North American Life Insurance Company Review

Officially known as North American Company for Life and Health Insurance, North American Life is a Chicago-based insurance carrier with its claims office in Sioux Falls, South Dakota. As part of the Sammons Financial Group which includes Midland National Life Insurance Company, Sammons Securities Company, Midland Financial and the Sammons Annuity Group, North American Life offers a range of life products.

The most recent A. M. Best rating for North American Life is A+ (secure/superior). It has consistently received good ratings from A. M. Best over the past few years. North American Life also has a recent “very strong” rating from Standard and Poor’s.

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History and Structure

North American Life was founded in Chicago in 1886 as North American Accident Association, a mutual insurance company. The company demutualized early in its history in 1899 and has operated as a stock company since. It assumed its current name in 1967. Today the company has over $8.4 billion in assets.

North American Life has been part of Sammons Financial Group since 1996. The parent company, Sammons Enterprises, Inc., is a Dallas-based holding company which grew out of Reserve Life Insurance Company, founded in 1938 by the company’s namesake, Charles A. Sammons. Although Reserve Life was dissolved in 1990, Sammons Enterprises remains one of the largest privately-held companies in the world, with assets of around $40 billion.

In addition to insurance, Sammons Enterprises has a stake in the heavy equipment and hospitality industries, with businesses such as Briggs Equipment and the Grove Park Inn Resort and Spa in Asheville, North Carolina, also under the company’s ownership.

North American Life is currently licensed to operate in 49 states, Puerto Rico and the District of Colombia. The company does not have a presence in New York state. North American Life utilizes a non-captive sales force of independent agents in its operating territory.

Term Life

The following product discussions are intended to be a generic representation of the policies North American Life offers. Not all products may be available in every state as described. In addition policy features and underwriting requirements may change without notice. Consult with a North American Life agent for the most up-to-date information.

North American Life offers a limited line of term products under its “ADDvantage” name in 10-, 15- and 20-year terms. With a minimum face value of $100,000, these term products are widely available even at older age, with 20-year term life insurance offered up to age 65, 15-year term offered up to age 70, and 10-year term offered up to age 75 in most states.

Preferred rates are offered for both smoker and non-smokers, while non-smokers can also qualify for super preferred rates. Available riders include additional insured, children’s term insurance riders, waiver of premium, accelerated death benefit and a monthly income endorsement. Guaranteed insurability riders are available on preferred and super preferred non-tobacco rates.

Universal Life

North American Life does not sell any whole life products, instead choosing to focus on universal life insurance. The company offers an innovative line of universal life products that many of its competitors do not. Namely their Indexed Universal Life policies, or IULs. These policy works similar to a standard variable universal life (VUL) but have some additional features that may make it appealing to more risk-adverse clientele. Like a VUL, the IUL accrues cash value based on market performance. However unlike a VUL, which determines cash value rate of return by separate accounts similar to mutual funds, the IUL’s rate of return is determined by the performance of a stock index.

All of the IUL products have guaranteed interest rates ranging from 2.5 percent to 3 percent, with some products offering the guaranteed interest rate in a fixed account. In addition some of the products have a cap rate (i.e. a maximum annual rate of return), while others do not.

One can also choose which index to tie the policy to. Options include the Standard and Poor’s 500 (S&P 500), the Dow Jones Industrial Average, the NASDAQ-100, the Dow Jones EURO STOXX 50, the Russell 2000 Index, or a composite multi-index option including them all.

All of North American Life’s UL and IUL products offer a level and increasing premium option typical of universal life products. The Custom Growth CV UL and Rapid Builder IUL also offer a return of premium option on the death benefit. Surrender charge schedules on North American Life UL and IUL policies are rather lengthy, ranging from 14 to 20 years, although loans and partial surrender options are available on the cash value on all products.

As with the term products, rates on North American Life UL and IUL products are available in standard, preferred and super preferred non-tobacco, as well as standard and preferred tobacco. Most UL and IUL policies are available for individuals as young as 15 days or as old as 75, although there are some variations according to product and underwriting policy. Minimum face values are $25,000 on all UL policies except for the Custom Accumulator, which is $50,000. The IUL policies have minimum face values of $25,00 for the Builder IUL, $50,000 for the Guarantee Builder IUL, and $100,000 for the Rapid Builder IUL.

Riders available on these policies include accidental death benefit, children’s term, accelerated benefit, guaranteed insurability and waiver of premium. The Guarantee Builder IUL plan also offers no lapse guarantee, paid up protection and protected pour in riders as well as a waiver of surrender charge endorsement.

Finally, an IUL is available as a two-person survivorship product with the death benefit payable upon the death of the second insured. In addition to the riders and features available on the other IUL products, the survivorship policy also offers an estate preservation rider, as this is a top concern for survivorship policy owners.

Annuities and Other Products

North American Life offers fixed annuities through Sammons Financial Group’s broker/dealer, Sammons Securities Company. There are a large variety of fixed annuities available from Sammons Securities from no less than 27 different companies, including Midland National and North American Life branded funds.

The company does not offer variable annuities on its own, but gives its agents access to a large list of variable annuities from other companies. Annuities are available in both qualified and non-qualified plans.

Other products available from Sammons Securities include 529 college savings plans, third-party variable life insurance, fee-based financial planning services and third-party money management.

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