Ohio National is one of the top life insurance companies in the USA, but has fallen a bit in the rankings over the last few years. In the following review of Ohio National, we will take a deep dive into the company’s history, financial ratings, consumer ratings, and its products to help our readers determine if it is the best choice for them among the many different companies in the marketplace.
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About Ohio National Life Insurance Company
Ohio National Life Insurance Company is a 111-year-old insurer headquartered in Cincinnati, Ohio. Ohio National is the principal life insurance branch of the Ohio National Group, which also includes investment-focused Ohio National Equities, Inc., and The O.N. Equity Sales Company, along with South American-oriented carrier Ohio National Seguros de Vida.
Ohio National spent the first half of its existence as a stockholder-owned company, but, in the 1950s converted to the mutual company model. The general trend in the industry has moved in the other direction—with mutual companies converting to stockholder companies. So, Ohio National’s decision to switch to and remain a mutual company is noteworthy.*
*2021 Update: Ohio National is “de-mutualizing” and will now be a stock company going forward. Source.
As a mutual company, Ohio National is technically owned by its policyholders, and the company’s directors “don’t have to cater to Wall Street” (as they put it).
The mutual company structure also means that participating life insurance policies are eligible for annual dividend payments, which Ohio National has an excellent track record of paying. Indeed, whole life is a featured product for Ohio National.
Ohio National sells life insurance and annuities in all fifty states, plus D.C. The company, which recently elected to reduce its annuity offerings, currently has more than 362,000 outstanding life insurance policies providing over $180 billion in combined coverage.
In the U.S., Ohio National products are available through the company’s nationwide network of independent agents and financial advisers. Ohio National Group subsidiary Ohio National Seguros de Vida, S.A., markets life insurance in Brazil, Chile, and Peru and is based in Santiago, Chile.
Ohio National engages in charitable giving through its Ohio National Foundation. Since 1987, the foundation has helped fund organizations such as the United Way, Habitat for Humanity, and a Taft Museum of Art program highlighting African-American modern art.
Ohio National Financial Ratings
- A.M. Best: A
- S&P: A-
- Moody’s: A3
- Fitch: NR
- Comdex Ranking: 74
Ohio National’s 74 score from Comdex places it among the top 30% of the top rated U.S. life insurance companies.
While the “A” grade from A.M. Best is a strong score suggesting long-term financial strength and stability, Ohio National enjoyed an A+ rating until two years ago.
In 2019, A.M. Best reduced Ohio National’s score by one notch due to the company’s decision to reduce its annuity offerings. According to the ratings service, the move limits long-term diversification of Ohio National’s revenue sources.
Even with a slightly decreased score, Ohio National’s financial ratings are solid, and policyholders face very little risk that the company will become unable to meet policy obligations in the foreseeable future.
In 2020, Ohio National increased its capital, equity, and assets under management—and its marketing network increased by 1,500 representatives.
Ohio National Consumer Ratings:
Ohio National has been accredited by the Better Business Bureau since all the way back in 1938 and currently holds an A+ rating from BBB, the top score available. The strong rating indicates that Ohio National does a very good job responding to and resolving consumer complaints lodged with BBB.
According to the National Association of Insurance Commissioners, state insurance commissioners receive significantly fewer consumer complaints about Ohio National compared to similar carriers.
Unfortunately, Ohio National is not included in J.D. Power’s annual consumer-satisfaction study of the life insurance industry, though, in general, Ohio National seems to have a good reputation for customer service.
What Products Does Ohio National Offer?
Ohio National is a life insurance company first and foremost and currently offers several varieties of term, whole life, and universal life coverage. Though the company recently decided to limit is presence in the annuity market, it is still marketing fixed indexed annuities and servicing existing contracts.
Along with life insurance and annuities, Ohio National offers disability coverage, investment products such as mutual funds, and administration of group retirement plans.
Life Insurance from Ohio National:
Ohio National offers term, whole life, and universal life coverage. With its mutual company model and strong dividend-paying track record, it’s not surprising that whole life is Ohio National’s focus.
Whole Life Insurance from Ohio National
Ohio National offers several different variations on the general whole life insurance theme.
All whole life insurance policies include coverage guaranteed to remain in place for life (as long as required premiums are paid).
Whole life policies also have fixed premiums and gradually increasing cash value, which earns tax-deferred interest.
Most of Ohio National’s whole life offerings are eligible for dividends, which, when issued, can be taken as cash, applied toward future premiums, or invested back into a policy to increase its cash value and death benefit.
The main distinctions between Ohio National’s whole life policies have to do with the premium-payment structure and whether cash-value accrual or death benefits are emphasized.
Prestige Value IV and Prestige 100 II focus on guaranteed, long-term coverage—premiums are comparably lower but so is cash-value growth potential.
While most whole life policies schedule premiums to be paid over the course of the insured’s life, Ohio National offers policies with limited premium payment periods. Policies with shorter premium periods typically have higher premiums at first.
However, when the premium obligations end, the policy is “paid up,” at which point coverage stays in place but no additional premiums are owed. Paid-up policies continue to grow and receive dividends (if eligible).
Prestige 10 Pay II schedules premiums over ten years, and Prestige 20 Pay has a twenty-year premium period. Premiums for Prestige Max III continue until the insured reaches age 65.
Term Life Insurance from Ohio National
Ohio National provides level term life insurance policies with 10, 15, and 20-year coverage periods. The company’s marketing of its term policies emphasizes the built-in conversion options, which allow policyholders to convert term coverage into one of Ohio National’s permanent policies (either whole life or universal life).
FlexTerm Plus & Basic
The FlexTerm Plus policy’s conversion option allows for conversion to any Ohio National permanent policy, while the FlexTerm Basic places more limitations on the policyholder’s choices.
Ohio National also markets term coverage as a complement to a whole life or universal life policy.
Basically, if a policyholder purchases a term policy to go with a whole life policy, the overall coverage amount will be higher (at least, during the term), but the premiums are substantially less than with a single, whole life policy providing the same total coverage.
Of course, a term policy alone would have the lowest premiums, but then you don’t get the cash-value accumulation or guaranteed-for-life coverage.
Universal Life Insurance from Ohio National
Ohio National offers standard universal life insurance (called “current assumption universal life”) and indexed universal life (IUL) but does not have a variable universal life policy currently available.
Both universal life varieties allow for flexibility in the amounts of premium payments and in the available death benefit. Policies have a minimum cost of insurance that must be paid to keep coverage in place, and payments above the minimum contribute toward cash value.
IUL vs UL
The main difference between standard UL and IUL coverage is how cash-value growth is measured. UL policies grow at guaranteed minimum interest rates. The growth rate can go up depending on market conditions and the company’s portfolio, but growth will never be less than the minimum rate.
Ohio National notes that its V-Pro UL policy is designed to provide long-term coverage at affordable rates, with less potential for growth.
IUL policies, on the other hand, link growth to the performance of one or more equity indexes (such as the S&P 500) selected by the policyholder.
Growth is subject to caps and floors. In soaring markets, the interest credited to the policy can’t go over the cap.
But, in sour markets, cash value won’t decrease or will grow at a guaranteed minimum rate (depending on the individual policy’s terms).
The Virtus IUL II policy emphasizes cash-value accumulation, with five account options (4 indexed + 1 fixed) for policyholders to choose from.
Ohio National has several optional riders that can be added to a life insurance policy for an additional premium. Not every rider is available with every policy or with every type of coverage.
Ohio National’s rider selection includes:
- Accelerated Benefit Rider (allows early access to a policy’s death benefit if the insured is diagnosed with a terminal or chronic illness);
- Disability Rider (if the insured becomes totally disabled, the premium obligations are waived during the period of disability);
- Children’s Term Rider (extends term coverage to the insured’s children that can ultimately be converted to permanent coverage);
- Guaranteed-Insurability (gives the policyholder the contractual right to purchase additional coverage at future dates without further underwriting).