Penn Mutual is undoubtedly one of the best life insurance companies in the US, thanks to its strong financial foundation and excellent policy offerings. However, it’s important to recognize that while Penn Mutual is an outstanding choice for many people, not every life insurance company will be a perfect fit for everyone.
That’s why we want to take a moment to discuss some of the strengths and weaknesses of Penn Mutual, so you can determine if it’s the right choice for you.
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About Penn Mutual
Penn Mutual Life Insurance Company is a well-established and historic life insurance carrier that has been chartered in Pennsylvania since 1847. It has a rich history of growth and success, and by the early 20th century, the company had over $100 million in assets and $1 billion in force life insurance.
Today, Penn Mutual continues to offer life insurance and annuities through a network of independent agents across the country. While some other companies have started accepting direct insurance applications, Penn Mutual policies are only available through agents. Given that Penn Mutual focuses on more complex permanent policies, it’s better to work with experienced independent agents when considering their policies. Penn Mutual was among the first carriers to offer universal life insurance policies in the 1980s and continues to provide a variety of UL options with numerous cash-value-growth metrics. Additionally, Penn Mutual offers a classic whole life policy that consistently earns dividends.
Penn Mutual recently introduced an accelerated underwriting process, known as ACE, for many of its policies. The accelerated process effectively works like the no exam life insurance currently offered by many other carriers.
Eligible new applicants up to age 65 can obtain as much as $5 million in coverage without undergoing a medical exam—and may receive a coverage decision in as little as a day.
Penn Mutual Group Financial Ratings
With a Comdex ranking of 93, Penn Mutual is a top rated life insurance company, ranking higher than many of its peers.
A.M. Best: A+
S&P Global: A+
Comdex Ranking: 93
Penn Mutual is an excellent company in terms of financial stability, which means policyholders face little risk of non-payment. The current “A+” rating from A.M. Best is the second-highest score available, and Penn Mutual has consistently rated “A” or better for the better part of a century.
Fortune 1000 Member
Penn Mutual comes in at lucky number 667 on the Fortune 1,000 list, with nearly $37 billion in total assets and annual revenue of $3.7 billion.
Like most insurers, Penn Mutual has a highly conservative investment philosophy. Over 80 percent of its holdings are in investment-grade bonds. A small percentage is committed to venture capital and private equity, which have more risk but greater upside potential.
Because Penn Mutual is a mutual company, whole life policyholders get to benefit from any strong investment returns—generally in the form of dividends.
J.D. Power & NAIC
In terms of customer satisfaction, Penn Mutual ranked in the bottom half of J.D. Power’s most recent survey of the life insurance industry. However, the company elicits fewer consumer complaints compared to similarly positioned insurers according to the National Association of Insurance Commissioners.
Penn Mutual is not accredited by the Better Business Bureau, and BBB’s site has insufficient data to draw any meaningful conclusions.
Products Offered by Penn Mutual:
- Term Life Insurance
- Whole Life Insurance
- Indexed, Variable, and Guaranteed Universal Life Insurance
- Fixed, Indexed, and Variable Annuities
- Money Market Funds
Life Insurance Policies Offered by Penn Mutual
Term Life Insurance
Although Penn Mutual’s forte is permanent life insurance, the company does offer a couple fixed-premium term policies. The term policies are intended for prospective insureds in need of relatively inexpensive life insurance protection over a finite period.
Guaranteed Convertible Term is a level-term life insurance policy available with initial term periods of 10, 15, 20, or 30 years. The policy is intended for policyholders who anticipate eventually converting the term coverage into a permanent policy.
If the conversion is elected, a built-in conversion credit applies one year’s worth of premium payments toward the new policy.
A unique optional Disability Waiver with Automatic Conversion Rider waives premiums and converts a term policy into permanent coverage if the insured becomes disabled for at least three years. The premium waiver stays effective for the new policy for as long as the insured remains disabled.
Another term option, Protection Non-Convertible Term, is a straight-forward level-term policy with no conversion option. Term periods of 10, 15, 20, and 30 years are available, and premiums are guaranteed not to increase during the initial term.
Permanent Life Insurance
Guaranteed Whole Life:
Penn Mutual’s flagship whole life insurance policy, Guaranteed Whole Life, features fixed premiums, guaranteed-for-life coverage, and cash value accrual that grows tax-deferred.
Dividend eligibility is a key selling point for Guaranteed Whole Life, as Penn Mutual has a solid track record of paying annual dividends at good rates—consistently over 6.00%.
Terminal illness and chronic illness riders—both of which allow acceleration of policy proceeds—come standard with Guaranteed Whole Life.
And an optional rider allows policyholders the contractual right to purchase permanent paid-up additions. When purchased, paid up additions increase a policy’s face value and cash value, and the additional coverage is eligible for dividends.
Used in conjunction with regular dividends paid out on the primary policy, the permanent paid-up addition rider can substantially increase a policy’s cash value growth potential.
Other available options include the Flexible Protection Rider, which lets the policyholder supplement the permanent whole life policy with early term coverage that gradually converts to whole life.
And a guaranteed insurability rider gives younger policyholders the contractual right to purchase increased coverage at future dates or life events, with no underwriting required.
Survivorship Choice Whole Life:
Survivorship Choice is a whole life policy that covers two insureds—typically spouses. The policy is designed as an estate-planning tool, providing a cost-effective means for a couple to provide a substantial, tax-free legacy to heirs.
Premiums can be scheduled so that the policy is paid up either within 20 years or when the younger insured reaches age 100.
Survivorship Choice is dividend-eligible and is available with policy enhancements similar to Guaranteed Whole Life.
Indexed Universal Life Insurance:
Penn Mutual offers two indexed UL policies: Accumulation Builder Flex and Survivorship Plus Select.
Accumulation Builder Flex is designed to serve as both permanent life insurance coverage and a wealth building asset.
Like most UL policies, it offers premium flexibility, subject to minimum requirements. Premium payments are apportioned between the cost of the death benefit and cash value that accrues tax-deferred interest.
Amounts representing cash value can be apportioned between several index options—which link growth to performance of the S&P 500—or a fixed account that grows at a minimum rate of at least 2.00%
Indexed accounts mirror the equity index’s performance from year to year. In down years, cash-value accounts have minimum guaranteed return rates or no risk of loss, depending on the index option selected.
In good market years, returns correspond to market returns but are subject to an annual growth cap and/or participation rate (i.e., the percentage of market increases credited to the account). The specific terms depend on the individual index options chosen.
Death Benefit Option
Penn Mutual gives IUL policyholders the choice between a fixed death benefit that stays the same through the life of the policy or a death benefit that increases gradually as the policy appreciates.
A built-in 30-year no lapse guaranty ensures protection will remain in place at least 30 years—provided no loans are taken and minimum premium obligations are met.
Penn Mutual offers an impressive menu of optional riders that can (among other things) extend term coverage to family members, waive premiums in the event of disability, or allow purchase of additional coverage with no underwriting.
For policyholders that are businesses, Penn Mutual provides a standard Supplemental Exchange Rider that lets the policyholder switch the policy’s insured.
And optional riders are available to reduce or eliminate early surrender charges or provide cash-value accrual guarantees in the initial six years after a policy is issued.
Survivorship Plus is designed as an estate-planning tool, covering two insureds and paying out upon the death of the second.
The indexed growth structure is similar to Accumulation Builder Flex, though Survivorship Plus includes enhanced crediting and growth guarantees.
The policy is available with many of the assorted riders offered for Accumulation Builder Flex and is also designed to provide the surviving insured with financial protection via ready access to guaranteed cash value if needed.
Diversified Advantage Variable Universal Life:
Diversified Advantage is a VUL policy intended for policyholders who want to emphasize the tax-deferred growth potential of a UL policy over its death benefit. Though the death benefit remains present if needed, Diversified Advantage’s highlight is the 33 flavors of investments on the menu.
Policyholders choose from among the various options when apportioning cash value, and the wide assortment of growth metrics lets individual policyholders customize a policy’s risk exposure to individual preference.
Choices range from fixed-rate growth comparable to a CD, to indexed growth tied to S&P 500 performance like IUL, to variable growth based on performance of more specialized investments akin to mutual funds.
Guaranteed Protection Universal Life:
The opposite side of the coin from Diversified Advantage VUL is Guaranteed Protection UL—a universal life policy that puts its emphasis on the permanent death benefit. Coverage is guaranteed to remain intact through age 121, suiting the policy for use as an estate-planning asset that efficiently transfers wealth to the next generation.
The policy does have cash value that can be tapped—and a built-in chronic illness rider can help pay for healthcare costs if needed—but Guaranteed Protection is designed for policyholders who want to be certain a substantial death benefit (and the resultant liquidity) will be available for beneficiaries or the insured’s estate.
Available Life Insurance Riders
Penn Mutual offers an impressive collection of riders that let policyholders customize coverage to individual needs and preferences. Not every rider is available with every policy, but, all in all, Penn Mutual’s rider line-up is among the most comprehensive in the industry.
Terminal Illness Rider: This rider, which comes standard with most policies, allows acceleration of a policy’s death benefit if the insured is diagnosed with less than 12 months to live.
Chronic Illness Accelerated Benefit Rider: If the insured is medically unable to perform at least 2 of 6 activities of daily living, this rider allows acceleration of a portion of a policy’s death benefit via regular periodic payments.
Child’s Term Rider: This rider provides term coverage for an insured’s minor children until they reach age 23, at which point the term rider can be converted to a permanent policy without additional underwriting.
Disability Completion Benefit Rider: If the insured becomes totally disabled, premium obligations and policy fees are waived while the insured remains disabled.
Accidental Death Benefit Rider: If the insured’s death results from a qualifying accident, this rider provides a supplemental death benefit.
Additional Insured Term Rider: Available with some permanent policies, this rider provides term coverage for a member of the insured’s family.
Guaranteed Increase Option Rider: If purchased, this rider allows the policyholder to purchase additional coverage, with no additional underwriting, when the insured reaches certain ages or when named life events occur.
Return of Premium Term Rider: Available with some permanent policies, this rider provides a supplemental death benefit equal to the total premiums paid.
While Penn Mutual has a strong reputation as one of the oldest and most established life insurance carriers in the US, it’s important to remember that every individual’s life insurance needs are unique. While Penn Mutual may be the best option for some people, it may not be the best fit for everyone. That’s why it’s essential to do your research and compare policies and pricing from multiple insurers before making a final decision. By shopping around, you can find the best life insurance policy that fits your needs and budget.