It’s difficult to imagine having a conversation about purchasing a final expense life insurance policy without mentioning Globe Life Insurance. This is because Globe Life insurance has chosen to focus primarily on providing small-term and whole life insurance policies which are often an ideal solution for those looking to cover any final expenses which may occur upon their passing.
That said, however…
It’s important to understand that Globe Life Insurance Company offers several different options when it comes to the “type” of insurance their clients can purchase. And while each option may be a good fit for some individuals, these different options can often become confusing particularly if an individual is focusing primarily on what their insurance may cost.
This is why…
We wanted to take a moment and provide our readers with a general background on Globe Life Insurance as well as highlight some of the pros and cons of their most popular policies. This way should you choose to compare Globe Life Insurance with other companies you’ll have a better idea whether or not Globe is right for you.
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About Globe Life
Globe Life and Accident Insurance Company is a Texas-based insurer that has offered relatively low-coverage life insurance for almost 70 years.
When the company started, it marketed its products in rural communities in Texas and Oklahoma. Globe Life now issues life insurance policies in ever state but New York.
Globe Life has an A+ rating from AM Best, which means Globe Life is a financially strong life insurance company.
Globe Life’s marketing efforts emphasize its “$1 per month life insurance” and 30-day money back guaranty. The one-dollar rate applies only to the first month after a policy is issued. After the first month, Globe Life charges premiums based on age, gender, and coverage amount—like any other insurer.
The 30-day guaranty allows purchasers to cancel their coverage for a full premium refund for thirty days after a policy is issued. In some states, insurance companies are required to do this anyway. And, of course, if the first month’s premium was only a dollar, the refund will not be all that significant.
Globe Life foregoes agents and sells its policies directly to consumers. In theory, this should allow the company to charge lower rates, though that is not always the case in practice.
The absence of an agent can also make consumer interactions with the company more burdensome. Customer satisfaction ratings for Globe Life are more difficult to come by than for most insurance companies.
However, according to the National Association of Insurance Commissioners, Globe Life draws substantially more consumer complaints to state insurance commissioners, adjusted for the company’s size and share of the life insurance market, than most life insurance carriers.
Globe Life’s Final Expense Insurance Products
Globe Life offers three principal life insurance products: Globe Life Term Life Insurance for Adults, Globe Life Whole Life Insurance, and Globe Life Whole Life Insurance for Children.
The first two are both marketed as final expense life insurance; however, only the whole life policy is guaranteed to remain in place for life.
Both policies for adults have relatively low available coverage levels, making Globe Life coverage a potential option for final expense insurance but not well-suited to income replacement.
Globe Life’s whole life coverage for children allows parents or grandparents to lock in permanent coverage for a minor at very low rates.
A policy can become a future source of final expense coverage for the covered child but is not useful as final expense coverage for the purchaser.
Globe Life’s Application Process:
All three of Globe Life’s life insurance offerings are no exam life insurance, which means that the application process does not require a formal medical exam.
The application process does, however, require a medical questionnaire, and the company pulls prescription history and Medical Information Bureau reports on applicants.
Among other things, Globe Life’s application for life insurance asks whether adult applicants use a wheelchair, are under nursing home care, or have been diagnosed with cancer; brain, heart, kidney, or liver problems; lung disease, mental or nervous disorders, or HIV/AIDS.
If an applicant has any other conditions for which Globe Life screens—or if the prescription history or Medical Information Bureau reports turn up any information Globe Life is uncomfortable with—an application for coverage will be denied.
The application for Whole Life Insurance for Children is considerably less detailed, asking only if the child has any chronic illnesses or conditions or has been diagnosed with HIV/AIDS.
Globe Life does not offer a guaranteed acceptance life insurance policy that won’t consider an applicant’s medical history in the underwriting process. Because Globe Life does not offer any guaranteed acceptance products, it also doesn’t require a waiting period before full coverage kicks in.
Globe Life Policy Availability, Premiums, and Coverage Limits.
Let’s take a look at Globe Life’s four different insurance products.
Globe Life Term Life Insurance for Adults:
Globe Life’s best-selling and most heavily marketed product is its term policy. The policy is available to applicants between 18 and 79 years old in coverage amounts between $5,000 and $100,000.
Term life insurance policies can be renewed in five-year increments, and the premium payments will increase upon each renewal.
However, the policy lapses at age 90, at which point renewal is no longer possible for any premium.
If you’re buying life insurance to provide income security to your loved ones in the event you die during your working years—and you’re not worried about losing the coverage when you reach retirement age—term life can be a good option.
But, if you want to make sure your loved ones or estate have enough liquidity to pay for funeral and burial expenses, taxes, administrative costs, and any estate debts, you’re probably better off with a permanent policy guaranteed to stay in place at the same premium rates for life.
Consumers looking for term coverage for income replacement over a long period are usually better off with policies that offer an extended term with fixed premiums.
The rates for a long-term policy are usually higher in the beginning, but, over the course of, for instance, a twenty-year term, that total premiums paid will almost always be less than compared to a policy that requires renewal (and a rate increase) every five years.
Term coverage—whether with an extended term or shorter renewable terms—generally isn’t a good option for individuals who want to purchase life insurance to pay for funeral and burial costs and other final expenses.
By definition, a term policy eventually expires, which means, unless you die before the end of the term, no death benefit will be available.
Life insurance premiums for term coverage increase dramatically as the insured ages.
For many seniors on fixed incomes, term premiums increase to the point where the policy might as well have lapsed because the premiums have become essentially unaffordable.
Globe Life will let you renew until age 90, but the premiums will end up being much, much higher as you age, and, if you live past 90, you will no longer have life insurance.
For younger applicants, the premiums for renewable term coverage look low at first, but, over the course of a long coverage period and factoring in rate increases, the value diminishes.
For instance, a male insured who applied for $20,000 in term coverage at age 41 and kept the policy in place through his 80th birthday would have paid premiums totaling over $10,000 more than the policy limits.
And at age 81, the rates will again increase dramatically.
If the policy isn’t triggered, all those premiums are lost.
Conversely, most whole life policies have fixed premiums and accrue cash value so that, over time, the surrender value of the policy exceeds the total premiums paid in.
And, of course, permanent coverage won’t lapse as long as the premiums are paid.
Globe Life Whole Life Insurance:
The whole life insurance policy for adults from Globe Life is available to applicants from age 18 through 79 in coverage amounts of $5,000, $10,000, $20,000, $30,000, or $50,000.
As a permanent, whole life policy, Globe’s senior life insurance features fixed premiums for the life of the policy and accrues cash value.
Although existing medical issues can result in denial or higher premiums, an insured who later develops a medical condition that would have been disqualifying or led to higher premiums will not have his or her premiums increased after the policy is issued.
Globe Life’s whole life coverage is designed more as final expense insurance intended to remain in place for life than as a combined insurance and investment product doubling as a source of retirement savings.
Policyholders can borrow money against a whole life policy’s cash value, with loans extended by the company at a fairly reasonable rate.
If a loan remains outstanding at the time of the insured’s death, the loan balance will be deducted from the death benefit.
While Globe Life’s whole life policy is well-suited to cover funeral and burial costs and other final expenses, there are other insurers who offer similar products at more attractive rates.
Globe Life Whole Life Insurance for Children:
The whole life product offered by Globe Life for children is available for new applicants from birth to age 24. Available policy limits range from $5,000 to $30,000.
Although Globe Life Whole Life for Children is not a source of final expense coverage for a policy purchaser, it can be an excellent means of obtaining well-priced permanent coverage with cash value that lasts for the entire life of a child.
Globe Life’s policies for children are simplified issue, requiring a health questionnaire but not a medical exam, and do not include a waiting period.
As whole life insurance, the policies have fixed premiums, accrue cash value, and will never lapse.
Upon reaching adulthood, the insured former child can take over the policy and retain permanent life insurance coverage at rates much lower than policies offered to adults.
Alternatively, the insured can elect to surrender the policy for its cash value. The cash value of whole life insurance earns interest over time, so a policy that remains in place during an insured’s entire childhood can become a good source of funds to pay for higher education.
Globe Life Accidental Benefits Insurance:
Globe Life also offers a more specialized accidental death and dismemberment (AD&D) policy providing coverage up to $250,000 for applicants between age 18 and 69.
The coverage area is fairly narrow—benefits only pay out if the insured’s death results from a bona fide accident.
Death resulting from illness, for instance, is not covered.
Unlike Globe Life’s life insurance offerings, the AD&D policies are guaranteed issue, which means they do not require any health screening or medical exam. This makes sense because the insurer is not worried about an insured dying early from an illness, as deaths due to illness are not covered.
Premium rates are fixed for the life of the policy, and all policies include inflation-adjustment provisions and partial coverage for dismemberment or paralysis.
If death results from an injury incurred as a passenger on a commercial airline, the policy’s principal benefit is doubled.
Globe Life’s Accidental Benefits policy has an available “Family Plan” that, for an additional premium, extends coverage to the principal insured’s spouse and children.
The benefit for the spouse is measured as half of the insured’s benefit, and children’s coverage pays out at 10% of the policy’s face value.