Lafayette Life is one of the highest rated life insurance companies in the U.S. In the following review of Lafayette Life we will examine the company and help our readers decide if it is the best option for them.
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About Lafayette Life Insurance
Based in Cincinnati, Ohio, Lafayette Life Insurance Company is a member of the Western & Southern Financial Group. Although Lafayette Life doesn’t have quite the same brand recognition as some of the bigger players in the life insurance industry, it’s a strong, stable company that offers very competitive products—particularly in the realm of whole life.
Lafayette is a mutual insurer, which means that the company is formally owned by its policyholders (rather than by stockholders). The most significant benefit of the mutual model to consumers is that, as a mutual company, Lafayette pays out annual dividends to eligible whole life policyholders.
Lafayette has an excellent track record in that regard, having issued policyholder dividends every year since its founding in 1905. Consequently, dividend-eligible whole life policies are where Lafayette excels.
Lafayette Life issues life insurance policies in Washington, D.C., and every state but New York. Lafayette’s distribution network includes over 7,500 independent agents (whom Lafayette calls “producers”) throughout the country.
And Lafayette also sells policies through in-house agents employed by the company. Lafayette primarily focuses its marketing on higher-earning clients and small to medium-size businesses.
Lafayette Financial Ratings
- A.M. Best: A+
- S&P: AA-
- Moody’s: NR
- Fitch: AA
- Comdex Ranking: 95
Lafayette boasts excellent financial scores from the major ratings organizations, coming in just barely outside the very top tier of life insurers. In terms of policyholder security, Lafayette is a safe bet.
Its strong financial position suggests little risk that the company will be unable to satisfy policy obligations anytime soon—and indicates a good likelihood that the company will maintain its strong track-record for policyholder dividends.
As of 2019, Lafayette held over $6 billion in assets and reported a little under $700 million in revenue. While those figures don’t stack up to some of the insurance industry’s giants, Western & Southern Financial—Lafayette’s Fortune 500 parent company—reports nearly $60 billion in total assets on its confidence-inspiring balance sheet.
Lafayette Consumer Ratings
Despite the company’s long history, Lafayette has only been accredited by the Better Business Bureau since 2012. Though the BBB currently reports an A+ grade for Lafayette, consumer reviews provided to BBB are not encouraging, with communication being the most common area of frustration.
However, BBB has a small sample size, and the National Association of Insurance Commissioners’ report indicates that Lafayette receives fewer than average complaints from consumers.
What Products Does Lafayette Offer?
Lafayette focuses on life insurance (especially whole life insurance) and annuities. Though Lafayette does not have a huge line of annuities, the available products have some attractive features and serve as a fine complement to Lafayette’s featured whole life policies.
Along with life insurance and annuities, Lafayette also offers financial services for small businesses.
Available services include administration of employer-sponsored retirement plans and business planning strategies like key person insurance and executive compensation plans.
Lafayette Life Insurance Products
Whole life insurance is Lafayette’s bread and butter, and the company offers seven different whole life options. All Lafayette whole life policies feature guaranteed-for-life coverage, cash-value accrual, policy growth at guaranteed minimum rates, and fixed premiums.
As with most whole life, value stored in a policy can be tapped through tax-free policy loans or partial withdrawals.
Or, policies can be surrendered for cash value (via a lump sum or through annuitized payments) to help fund retirement.
The principal difference among Lafayette’s whole life offerings is the varying premium structures—specifically, the duration for which policyholders’ premium obligations last.
In general, the longer a policy’s premiums last, the lower they will be. A policy with a shorter premium term will require higher premiums but will also build cash value faster, resulting in greater growth and improved dividend potential.
Lafayette’s seven whole life offerings are as follows:
- 10 Pay Life 2020 is a limited pay policy that requires premiums for ten years, after which the policy is “paid-up,” and no additional premiums are required (though the coverage remains in place);
- Heritage 2020 requires premiums through age 100 or for 20 years (whichever is longer);
- Contender 2020 requires premiums through age 95 or for 20 years (whichever is longer);
- Patriot 2020 requires premiums through age 75 or for 30 years (whichever is longer);
- Sentinel 2020 requires premiums through age 65 or for 20 years (whichever is longer);
- Liberty 2020 Single Premium requires one lump-sum premium payment when a policy is issued and then provides guaranteed for life coverage;
- Protector 2020 is a simplified-issue whole life policy which does not require a medical exam and is available with level premiums for life or through a single lump-sum premium. Coverage is limited to $50,000 for policyholders who choose level premiums.
Lafayette’s whole life policies have proven to be one of the better choices on the market for policyholders focused on long-term policy growth.
Most of Lafayette’s whole life policies are dividend-eligible, and the company has consistently issued annual dividends to policyholders during every year of its existence. And Lafayette Life’s strong financial position suggests that trend is likely to continue.
Optional riders can also substantially increase a whole life policy’s value over time. A paid-up addition rider gives the policyholder the right to purchase additional paid-up insurance at future intervals.
When the option is exercised, the premium is paid upfront, the supplemental coverage is immediately paid-in-full, and the policy’s death benefit, cash value, and potential for growth are all increased.
For eligible participating life insurance policies, dividend payments can be applied toward paid-up addition premiums so that no out-of-pocket expense is incurred for the additional coverage.
Lafayette also offers with whole life policies an accelerated death benefit rider (standard with some policies) that allows policyholders to access a policy’s death benefit early if the insured is diagnosed with a terminal, chronic, or critical illness.
A long-term care rider is available with some policies, allowing the policyholder to apply policy value toward the costs of the insured’s long-term care.
For policyholders who temporarily need higher coverage, Lafayette offers an optional term rider that temporarily increases a policy’s death benefit for a period of years.
Term Life Insurance from Lafayette Life
Though whole life is clearly Lafayette Life’s forte, the company offers a versatile term series—ingeniously titled the “Marquis Term Series” (as in Marquis de Lafayette)—available for applicants who don’t want permanent coverage (or who don’t want it right away).
The Marquis Term Series policies are available with term lengths of 10, 20, and 30 years and coverage amounts starting at $100,000.
Upon the conclusion of a policy’s term, the policyholder can renew coverage annually (for an increased premium) through the insured’s 95th birthday.
New insureds can be anywhere from 18 to 75 years old, though longer terms are only available for younger applicants.
The product is not no exam life insurance, as Lafayette’s Maquis Term policies are fully underwritten and require a medical exam at the time of application.
Most Lafayette term policies include a conversion rider allowing the policyholder to convert the term coverage into whole life. When included, the conversion option can be exercised until the policy’s initial term ends or through the insured’s 65th birthday (whichever happens first).
This can be a great option for younger applicants who need higher coverage early on but ultimately want to get in on the advantages of Lafayette’s featured whole life policies.
Other Offerings from Lafayette Life
Universal life insurance is conspicuously absent from Lafayette’s available policies. So, if you have your heart set on UL, Lafayette Life isn’t your huckleberry.
However, Lafayette does offer a strong menu of annuities, including a single-premium immediate annuity and a series of fixed indexed annuity options (also called “Marquis”) with some attractive features.
Marquis Centennial, for instance, is a flexible-premium deferred annuity that links growth to several indexes (including the S&P 500), while still guarantying a minimum return.