Genworth Life Insurance Company Review
Genworth began as The Life Insurance Company of Virginia, writing their first policy in 1871. They now have over $100 Billion in assets and do business in over twenty five countries around the world. The company still maintains headquarters in Virginia; however it operates in all fifty States. Genworth is a publically traded company and is recognized in the Standard & Poor’s 500 Index and the Fortune 500.
Financial Ratings and Strength
Genworth Life Insurance gets above average ratings from the independent rating agencies. AM Best has given them an ‘A’ rating, which means excellent financial strength in their opinion. Standard & Poor’s rates them very strong with an ‘A’ as well. Moody’s has given them an ‘A2’ rating, which translates to ‘good’ on their descriptive index. Fitch rates them financially ‘strong’ and has given Genworth an ‘A-‘for financial strength and ability to pay claims.
Traditional Term Life Insurance
Genworth currently offers guaranteed level premium term coverage for periods of ten, fifteen, twenty, and thirty years. In many cases the policy can be converted to permanent insurance during the level premium period. The term policies are marketed as affordable, low premium coverage for families the security of life insurance.
Keep in mind the totality of what will be lost when determining the amount of coverage to purchase. Not only final expenses and remaining debt, but also consider future earnings, savings and retirement contributions, lost benefits, family health costs (bereavement counseling), and other financial issues.
Universal Life Insurance
Genworth does offer a flexible premium universal life policy which can help families with protection, supplemental retirement savings, as well as wealth preservation and transfer. At this time there is not adjustability with the death benefit, which makes the policy slightly less attractive than fully flexible policies. The option does exist to lower premium payments if cash value performance is better than expected.
The universal policy does provide access to the cash value later in life. Both loans and partial withdrawals are available to the policy owner, which can be repaid or will be deducted from a death benefit at the time of payout.
Missing: Whole Life and Variable Policies
Genworth is following an industry trend in dropping whole life insurance. The frank truth is that universal life insurance policies are actually whole life with incredible benefits and flexibility. UL’s have nearly rendered whole life insurance a moot product.
Additionally, the company currently doesn’t offer variable universal life insurance. They have opted to direct customers into the fixed universal products and keep the assets under Genworth management. Making separate investments into funds or with money managers sends the actual dollars out to a third party in addition to adding a number of fees and costs to the product.
Genworth has a ‘good’ portfolio of fixed securities. It is this portfolio of interest paying investments that collectively pay the rates of return to policy holders. They have a fair balance of quality and investment return within the portfolio.
Remember, the interest rate of a bond or fixed income security is directly related to the risk involved. This means that higher risk bonds will have to pay higher rates to get investors to take on the increased risk involved. Alternatively, less risky securities will be able to offer lower rates because of the relative safety of the investment they are offering.
Standout Policy: Life and Long Term Care Combo
Genworth has a standout policy which is a unique combination of universal life insurance with long term care protection. This fresh approach provides a ‘pool of dollars’ that can cover the long term care expenses of the policy owner as well as provide a death benefit for beneficiaries.
This is very similar to an accelerated death benefit, however not requiring a terminal illness to trigger access to the funds. With this policy funds will be allocated to help or completely cover nursing home, assisted living, or in home nursing care for extended periods of time.
Many individuals want to protect their family and heirs from the emotional and financial hardships of a long term care need, which in many cases devastates the financial legacy of the family. This policy can help the owner protect their loved ones from those hardships if needed, otherwise leaving a tax free death benefit.
Overall, the company is financially strong and their traditional product offerings are sound. The term insurance and universal life policies are worthy of getting a quote. The highlight of the products is the universal life/long term care combo policy. The need for long term care protection is growing in the minds of many families. As medical advancements continue to move the life expectancy up, the need for long term medical care is also increasing. This policy addresses that growing need while also providing protection via the death benefit.
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