Introduction
I’m rating life insurance companies on a scale of 1 to 10, specifically designed for infinite banking and high early cash value, while also giving you my reasons why. After seven years of intensive research studying these companies, I decided to give a rating to each of these companies based on my personal opinion. These aren’t in order, but at the very end, I will list them in order by ratings.
MassMutual has a variety of products ranging from death benefit to high early cash value focused. There’s no shortage of options. Because of their optionality, it also brings complexity. The riders and how they function are confusing relative to the marketplace and have some of the worst PUA flexibility comparatively as well. They have the best interface in the marketplace, though, by far making it super easy to know your cash value and the ability to take a loan. They aren’t huge fans of Infinite Banking, limiting the target audience of who would be a good fit for them. Their underwriting is good comparatively to the marketplace and they have some of the strongest financials and track record in the entire industry. Due to the company’s complexity and not being pro IBC, but great product offering and loan functionality, I will give them a seven.
Guardian
Guardian has a very strong business marketplace offering, making it advantageous for the advanced business marketplace. They have some of the best PUA flexibility with solid underwriting. Although they have great PUA flexibility and underwriting, their cash value product is very average relative to what is available in the marketplace. Their interface is above average, making it relatively easy to take a policy loan. They are also large in size, giving them strong financials. If you are an agent selling Guardian, upfront commissions are the lowest in the marketplace, making it challenging for new agents to survive, especially when optimizing it for high early cash value, even though they make up for it in the back end with renewals. Because of their flexibility with the policy designs, strong financials, never expressed concerns for IBC, but their very average cash value growth, I will give them a 7.5.
Northwestern Mutual
Northwestern Mutual’s claim to fame from a marketing perspective is that they pay out the largest dividend in the industry, which is true. As a whole, they pay the most because they have the largest consumer base. But relative to the marketplace, they also provide one of the lowest dividend scale rates at 5%, which personally, I don’t think how much dividend they pay or their scale really matters that much. Agents that work for Northwestern are taught a very specific style of financial planning. This planning is not advantageous for high early cash value. They even penalize their agents’ commissions if their clients take loans in the first year. Because Northwestern Mutual has upline managers and compensation has to be split between agents, it makes it hard for agents to design whole life policies to be super high cash value focused. 95% of all the policies I’ve ever seen from Northwestern have been all base policies or at most 50 base to PUA ratios. I do believe Northwestern is a great company with a great track record, great story, great financials, but because of the way they are set up from an agent model and the way they are taught financial planning, it makes it hard for agents to do high early cash value policies. So because of this, I will give them a five for Infinite Banking.
Penn Mutual
Penn Mutual has been making tremendous strides over the last 20 years. If I made this video in the early 2000s, my rating would be very different here. Penn Mutual has the best underwriting in the space by far, allowing up to 7 million of death benefit without blood and urine exams. Their cash value is very middle of the pack relative to what is available in the first few years, but their long-term performance is by far the best in the industry. They have great PUA flexibility and are by far the easiest to work with from an agent’s perspective. They currently are behind the eight ball for their user interface and usability to take a policy loan relative to the marketplace as well. But they shared they plan to make these changes in 2024. They currently have some of the cheapest death benefit rates relative to the marketplace, giving them an advantage over their competitors as well. Because of their superior long-term cash value growth, ease of underwriting, but lack of user interface that is currently being worked on, I will give them an eight.
- 5
- What is the primary purpose of insurance?
Lafayette Life Insurance
Lafayette Life Insurance is very pro infinite banking. They embrace it. They want the business. They have some of the strongest high early cash value products available in the first couple of years and have the best front-load product I have ever seen. Lafayette lacks in the underwriting department and is one of the worst in the industry. They have a very subpar dividend scale at 5.2 percent but like I shared before, I don’t put too much weight into that. Their whole life guarantee is two percent, which means they are focused on cash value growth, which makes the death benefit not so sexy. Their long-term growth is also very average, especially compared to how much early cash value is available. Because of their lack of death benefit, underwriting issues, average long-term growth, but exceptional early growth and ability to want IBC business, I will give them a 7.5.
One America
One America is probably the most consistent company across the board, which means that they do not do anything revolutionary that makes them stand out in the industry, but they do not have any glaring weaknesses. They also love IBC business, even putting together infinite banking symposiums. If they did have one downfall relative to the marketplace, I would say underwriting. But because of their ability to be right in the middle of the pack in every category and do things well, but also not do anything exceptional to the rest of the marketplace, I will give them a 6.5.
Emeritus
Emeritus has some of the strongest guarantees in the marketplace, making it super attractive for individuals that really value this. Their cash value growth and the dividend is below average in the space, though. They also have one of the lowest Comdex scores currently at an 83, which is just a representation of the company’s financial strength, which means they have the lowest score of any of the companies previously mentioned. Because of their strong guarantees, but below average cash value growth and low Comdex score, I will give them a six.
State Farm
State Farm is well known for being a good neighbor and creating a brand around Jake, the guy from State Farm. Although they do well in home and auto insurance, they also sell life insurance. I always discuss that it is important to use mutual carriers when using infinite banking or the end asset concept, but not all mutual carriers are created equal. The pros are they have a strong brand and are mutual, but their cons far outweigh their pros. The cons are they don’t have the ability to design a policy that I’m aware of to overfund and focus on cash value. Every time I’ve ever seen a State Farm policy, it has never been overfunded. Every single customer I’ve ever talked to that has shared their experience, they share their agent becomes confused when bringing up the proper way to design a whole life contract for cash value, or they try and they just don’t know how. Because they are also associated with property and casualty, it creates a lot of risk from a profitability standpoint, which makes it very disadvantageous for the consumer receiving any profits in the form of a dividend. You can’t be the master of all things to all people. Because of their lack of ability to design a policy correctly for high early cash value and their association with a home and auto line, I will give them a four for whole life policies focused on cash value growth.
World Financial Group (WFG) and PHP
Up next to review are going to be a couple of different companies and groups bundled into one. The two companies we will discuss are World Financial Group, known as WFG, and PHP. While these are not actually insurance companies, they represent an entire line of insurance companies. But who they are and what they sell is what we will focus on. These companies represent a group that focuses solely on indexed universal life products. They promote the truth and the way of life for cash value products is an IUL. Because of this, they work with predominantly 99.9% of stock companies. So even if they tried to provide a whole life product, it would not perform very well. Because they are multi-level marketing companies, some may know it as network marketing or others call it pyramid schemes. They become very, very challenging to provide the level of competency for appropriate education in the marketplace. I say this because a big bulk of people come into the space looking to just recruit and build a team focusing on passive income, which limits their ability to go all in on education and provide a certain level of expertise to their clients. While this isn’t the case for everyone that is associated with them, there are great people who do things well. The ratio is just low because of their business model. And because IUL provides a higher commission rate in 90% of the instances, it is the one product that provides the best ability for these companies to be profitable as they have to share commissions with multiple levels of their upline. Because of their business model, working with mainly stock companies, lack of education around whole life in the financial sector for a bulk of their agents, I will give a 4.5 for infinite banking focused financial planning.
Primerica
Last on the list and arguably the least is Primerica. Primerica is also known as a multi-level marketing company that focuses heavily on recruiting. They also have a very strong philosophy. Their philosophy is buy term and invest the difference. And this is the one-stop shop model for everyone. While I agree this model is great for the majority of people, I have a hard time with the model that one model is right for everyone. Because of this model, they disagree with permanent insurance altogether, obviously putting them in the camp of just not being able to work with them for high cash value products. Primerica agents are many soldiers of Dave Ramsey, following his philosophy to the T. So when Dave says, work with real financial advisors, this is who he is likely referring to. I do believe there are very smart, competent people who work for this company. I have actually talked to a few, but because of their heavy recruiting model, I also believe it is very far and in between. Because they have only been around since 1977 and their philosophy of not believing in permanent life insurance, of course, I can’t really give them a higher rating than a one. If the goal is high early cash value policies for infinite banking or the end asset.
Conclusion
There were other companies that I could have rated as there are hundreds of life insurance companies, but this list gave a wide range of 10 companies to hopefully help educate you on some of the marketplace and what is available and what to look for when shopping for life insurance companies. These are the rankings for today, currently in 2023. I plan to do one of these at least once a year and see how the rankings change. I also didn’t believe it was fair to rate any one company above an eight because I think every company currently has things to improve upon. And I’ve never seen one company that has everything that would be ideal from top to bottom. Therefore, if a company is a six and above, they are a very good candidate to accomplish this concept with. And I believe if you used any of the companies that were six and above, you’d be in a very good place for this type of concept. Also, depending on your goals and what you are trying to achieve, these ratings could change a couple of points up or down. This isn’t science and it isn’t the law. This is my current opinion and everyone will be different in their current thoughts. To wrap this up, here is the list of the companies in order with their current ratings. If anyone has anything they would like to add or has any questions, put it in the comments below.