Security Mutual Life is a top life insurance company, that focuses on providing participating life insurance throughout the U.S. A. In the following Review of Security Mutual Life, we will take a closer look at the company, its history, the products it offers and its financial ratings to give our readers a better idea on whether or not SML is the right company for you.
About Security Mutual Life Insurance
Binghamton, New York-based Security Mutual Life Insurance Company of New York (“Security Mutual”) is a mid-sized mutual insurer specializing in whole life insurance coverage.
Now marketing itself as “The Company that Cares,” Security Mutual was initially formed in 1886 as Security Mutual Life Association and has maintained the mutual insurer model since its founding.
Mutual Insurance Company
As opposed to a stockholder-owned corporation, a mutual company is owned by its policyholders and is not publicly traded.
In practical terms, the most important feature of mutual companies for most consumers is that participating life insurance policies are eligible for dividends—essentially a small slice of the company’s profits distributed to policyholders on an annual basis.
Life insurance dividends are never guaranteed, but Security Mutual Life has a well-established track record of consistent dividends, having issued them every year for more than 125 consecutive years.
Within the insurance industry, Security Mutual is viewed as a particularly strong company for policyholders interested in whole life coverage for cash-value accumulation.
In addition to paying regular dividends, the company also uses non-direct recognition in its accounting of policy loans received from cash value.
That means that, if a policyholder accepts a loan against the policy, dividend payments and policy growth are not reduced for the outstanding loan balance.
Through its history, Security Mutual has been ahead of the curve in providing premium discounts for healthy living. In the early 20th Century, the company offered “Total Abstinence” discounts for non-drinkers, and Security Mutual introduced non-smoker discounts in the 1970s.
Security Mutual’s charitable activity emphasizes the fight against cancer. The Sock Out Cancer initiative with which Security Mutual is closely involved provides financial assistance to needy cancer patients and their families.
Security Mutual sells life insurance and other financial products in all fifty states, along with D.C. and the U.S. Virgin Islands. The company markets its products through independent agents and company representatives available by phone or email.
Security Mutual Life Insurance Co. Financial Ratings
- A.M. Best: A-
- S&P: NR
- Moody’s: NR
- Fitch: NR
- Comdex Ranking: NR
Of the major financial ratings organizations, only A.M. Best provides a ranking for Security Mutual. The company’s A- score (the fourth highest available) is respectable, though not outstanding.
Security Mutual is comfortably rated within the top half of U.S. insurers but does not have the same financial heft as some of the bigger names in the industry.
Security Mutual reports over $2.7 billion in invested assets, predominately consisting of high-quality, fixed-maturity, investment-grade securities. The company’s conservative investment strategy is designed for long-term security and stability, minimizing policyholder risk while allowing enough growth potential to allow for policy growth and dividends.
Security Mutual Life Insurance Co. Consumer Ratings:
Unfortunately, there are very few consumer reviews available for Security Mutual. The Better Business Bureau gives the company an A+ grade, which generally means Security Mutual has a good record of responding to and resolving consumer complaints lodged with BBB. Security Mutual is not BBB accredited, and no consumer reviews are available for the company on BBB’s site.
With little publicly available information, its difficult to gage Security Mutual’s customer service. As a general rule, mutual companies tend to do a little better than stockholder-owned companies, and smaller insurers tend to do a little better than the industry behemoths. But these are only general trends, not hard-and-fast rules.
What Products Does Security Mutual Offer?
For individual consumers, Security Mutual sells term life, whole life, universal life, and survivorship life insurance coverage, along with several types of annuities.
The company also offers a variety of financial planning products and services for individuals and businesses, including retirement and estate planning, college savings plans, and key person coverage.
Security Mutual subsidiary Security Administrators, Inc. administers pension and profit-sharing benefits plans for small to medium-sized businesses. Another subsidiary, SML Agency Services, Inc., markets disability and long-term care insurance products.
Life Insurance from Security Mutual
Whole Life from Security Mutual:
Whole life is Security Mutual’s focus, and the company offers several variations on the classic whole life theme.
Whole life insurance policies provide a permanent death benefit, with level premiums and cash value accumulation.
Cash value earns guaranteed interest, and most Security Mutual whole life policies are also eligible for dividends.
Coverage is generally available for applicants between ages 18 and 80, with a minimum coverage amount of $100,000. However, certain policy types allow for lower coverage or modify the application age range (including by allowing coverage for minor insureds).
Security Mutual’s whole life policies differ primarily in the emphasis placed on cash-value versus death benefit, with premiums generally lower for policies more focused on death benefit.
A host of rider options are offered with whole life policies, including
- Terminal illness and chronic illness (accelerating policy proceeds if an insured is diagnosed with a terminal or chronic illness, respectively);
- Disability (waiving premiums if the insured becomes disabled);
- Accidental Death (providing a supplemental death benefit if the insured’s death results from a qualifying “accident”);
- Level Term (providing supplemental term coverage for a period of years); and,
- Paid-up Additions (giving the right to purchase paid-in-full policy additions that increase both cash value and death benefit).
Term Life from Security Mutual:
Security Mutual’s standard level term life insurance policy is available with initial term lengths of 10, 15, 20, and 30 years, in coverage amounts starting at $100,000.
The 20 and 30-year terms are not available for applicants over ages 65 and 50, respectively.
Upon conclusion of a policy’s initial term, it can be renewed annually through age 90, and all policies include a conversion option, which lets the policyholder swap term coverage for a permanent policy.
Terminal illness, accidental death, and disability riders are available with Security Mutual’s level-term policy.
Security Mutual also offers an Annual Renewable Term (ART) policy for applicants ages 18—79. Death benefits range from $100,000 to $500,000, and coverage can be renewed annually (for an increased premium) for up to ten years or through age 80.
Another term variation pays the death benefit as a regular monthly payment rather than a lump sum.
Universal Life from Security Mutual:
Security Mutual Universal Life Insurance policies allow for flexibility in the timing and amounts of premium payments and the death benefit provided. Security Mutual offers several different UL policies, though some are marketed to businesses for use in employee compensation and benefits plans.
Security Mutual’s standard UL policy for individual consumers is available for new insureds up to age 85 in minimum face value amounts starting at $25,000 or $50,000 (depending on the ratings class).
The Universal Life policy is designed to provide guaranteed extended coverage with long-term cash-value accumulation.
Interest rates credited to cash value depend on prevailing rates, subject to a guaranteed minimum.
A UL policy’s death benefit can be set up to remain level through the life of the policy or to gradually increase as cash-value accumulates.
Available riders include terminal illness, chronic illness, disability, and accidental death.
Security Mutual also offers a survivorship version of its UL coverage. The survivorship policy, which covers the lives of two insureds and pays out upon the death of the second, is designed for use in estate planning.