Penn Mutual Life Insurance Company Review

One of the oldest mutual life insurance companies in America and with deep roots in arguably the birthplace of the American insurance industry, Philadelphia, Penn Mutual Life Insurance has been a major player in the life insurance field since the mid 1800s. A “life-only” company with no involvement in property and casualty insurance lines, Penn Mutual Life Insurance offers a full range of life insurance and annuity products.

Penn Mutual Life Insurance currently maintains an A+ (secure/superior) rating from A. M. Best. It has the distinction of being one of only a handful of companies that has been rated an A or higher by A. M Best for 75 consecutive years. Penn Mutual also has an AA- (very strong) rating from Standard & Poor’s and a Aa3 (excellent) rating from Moody’s Investor Services.

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History and Structure

Penn Mutual Life Insurance was founded in Philadelphia in 1847 and was strong enough to honor its first death benefit claim the very next year. The company has consistently been an innovator in the life insurance field, offering annuities as early as 1888, retirement income policies by the 1930s, and universal life insurance in the early 1980s. The company moved to the Philadelphia suburb of Horsham, Pennsylvania, in the late 1980s.

Penn Mutual Life Insurance offers its fixed life insurance and annuity products through its Penn Insurance and Annuity Company, which is licensed in 48 states and the District of Columbia. Variable products are offered through two affiliated broker/dealers, Janney Montgomery Scott LLC in the eastern  states, and Hornor, Townsend and Kent, Inc. elsewhere. In addition, subsidiary companies Pennsylvania Trust Company and Independence Capital Management, Inc. provide investment and related services.

Unlike many life insurance companies which either employ their agency force on independent basis only or through an exclusive, captive force only, insurance agents affiliated with Penn Mutual Life Insurance can be either captive or independent agents.

Term Life

The following product discussions are intended to be a generic representation of the policies Penn Mutual Life Insurance 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 Penn Mutual Life Insurance agent for the most up-to-date information.

Penn Mutual Life Insurance offers two types of term life insurance. Its level premium term product is a pretty straightforward term policy issued for 10-, 15- or 20-year terms.

The Guaranteed Term products are quite similar, but allow the insured to convert the product to an available permanent life insurance policy if desired. This conversion can be done all at once or in increments. Waivers available on the Guaranteed Term line include waiver of premium, children’s term and accidental death benefit.

Whole Life

Penn Mutual Life Insurance’s whole life product is called Flexible Choice. It features some innovative options including a flexible protection rider which allows part of the face value to be initially purchased as term insurance, to be replaced over time by permanent, paid-up insurance. Alternatively, the policy can be written as a straight whole life with no term blend.

Policyholders can also elect to set the policy to be paid up  at age 100 or choose the accelerated paid-up additions rider, which accelerates the flexible protection rider and can allow the policyholder to adjust or even skip premium payments in a similar manner to a universal life policy.

Universal Life

Although universal life is still a relatively new product for many companies, Penn Mutual Life Insurance has had a UL policy option in  their stable for nearly 30 years. Universal life insurance policies offered by Penn Mutual Life Insurance include the Guaranteed Protection UL and the Accumulation  Builder II IUL. The Guaranteed Protection product is a typical UL policy, but is purposely given a high cash value to minimize the possibility of policy lapse. Policyholders can also choose a business accounting rider to facilitate purchasing universal life insurance for business purposes such as key person or partnership purposes, or an overloan protection rider to protect against policy lapse in the event the policy loan value otherwise goes too high.

The Accumulation Builder II is an indexed universal life policy, or one that has its cash value tied to a stock index rather than a separate account like a VUL. This option provides much of the benefit a good market can provide to cash value, but without some of the risk involved with a VUL. The Accumulation Builder II is tied to the Standard and Poor’s 500 index,  features an annual interest floor guarantee (which means the return on investment  can never go below a certain level regardless of market conditions) and 100 percent participation.

Like other indexed insurance products, the Accumulation Builder II also has an annual interest floor ceiling, but comes with a  guarantee that the ceiling will never go below a certain level. Dollar cost averaging and traditional fixed account options are also available for those who favor more conservative investment methods.

Penn Mutual’s variable universal life (VUL) policy is the Diversified Growth product. While like all other VULs this policy requires an  active investor to maximize its potential, it also offers options designed to hedge against some of the risks inherent to this life insurance type. Among  these are a 20-year no-lapse guarantee with an optional rider extending the  guarantee indefinitely (assuming the necessary premiums are paid, of course) and an indexed fixed account option that operates similar to the IUL.

Annuities and Other Products

Penn Mutual Life Insurance, through its subsidiaries and broker-dealers, offers the standard range of fixed and variable annuities in qualified and non-qualified plans. The variable annuities in particular are available in a wide selection of options, including a variable annuities with six- or 12-month fixed rate account for dollar cost averaging, a product with a  short four-year surrender charge schedule, and a product specifically designed  for use as a retirement planning vehicle. Living benefit riders are available with these annuities as well. Penn Mutual also has an immediate, or single-pay annuity which can be completely funded with a single lump sum payment.

Finally, Penn Mutual Life Insurance offers survivorship life insurance options available as a VUL or IUL. This policy type covers two people and pays a death benefit upon the death of the last insured. It is commonly used by married couple or business partners who do not wish to purchase separate policies.

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