Navy Federal Life Insurance Review

Pros Explained

• Online quotes and application process: Some members can get quotes for coverage—including term, permanent, and child life insurance—in just a few seconds online. You can also begin your application, if a specific policy result meets your needs. 
• Potential dividends on whole life coverage: Flagship Whole Life policies offer potential dividends, helping you grow your policy’s cash value faster.
• Multiple riders included at no charge: Depending on the policy you purchase, you can also receive extra coverage from certain riders at no additional charge. This may include accelerated death benefits and chronic/terminal illness benefits. 
• Wide variety of terms to choose from: Through Navy Federal, you can shop for term life insurance coverage ranging from 10 to 40 years in length.

Cons Explained

• Coverage is only offered to Navy Federal members: To purchase coverage through Navy Federal, you will need to be a NFCU member. In order to qualify, you will either need to be an active member of the military, veteran, or retiree; DoD civilian; or eligible family member of military personnel.
• Policies are not underwritten by Navy Federal: Military members’ life insurance coverage is issued by Navy Mutual. Policies for other Navy Federal members are offered by various partner carriers.
• Military member policies require a medical exam: Military member policies offered by Navy Mutual require a medical exam prior to issue. However, if you convert your term policy to whole life coverage down the line, or are recently separated from the military and previously held SGLI coverage, you may be able to avoid the paramedical exam.

Available Plans

Through Navy Federal, members can purchase either term, whole life, or accidental death and dismemberment (AD&D) policies to suit their needs. Coverage is available to all members, military or not, though the policy specifics may vary.

Flex Term Plan (Military)

Offered to military members through Navy Mutual, the Flex Term plan provides between $50,000 and $1 million in low-cost, temporary life insurance protection. This policy is available for applicants between the ages of 18 and 49 (or 39, for nicotine users) and can be purchased as supplemental coverage to an existing Servicemembers’ Group Life Insurance (SGLI) plan. Flex Term life insurance coverage provides a level death benefit with level premiums and can be converted to whole life coverage at any time before the policyholder’s 48th birthday (38th birthday, if a nicotine user) without a medical exam.

Level II Plus Term (Military)

Designed to replace Veterans’ Group Life Insurance (VGLI) policies, the Level II Plus Term coverage offers affordable term life insurance up to age 85 (issue ages are 20 through 75). Unlike VGLI, this policy has level premiums for a term period of 10 years or more and is available for between $50,000 and $1.5 million in coverage (offered in $10,000 increments). Until age 71, this policy can also be converted to whole life coverage without the need for a medical exam, as long as the policy has at least five years of coverage remaining.

Flagship Whole Life Plan (Military)

The Flagship Whole Life policy is available to military members through Navy Mutual, offering up to $1.5 million in permanent life insurance coverage along with a cash value that grows over time. This whole life policy can earn dividends, offers affordable level premiums, and can be issued to applicants ages six months through 80 years. This policy generally requires a medical exam, but up to $400,000 in coverage is offered to recently separated servicemembers without the need for underwriting. This is only available if you are within 120 days of separation from the service and had SGLI coverage at the time of separation.

Term Life Insurance (All Members)

Offered to all Navy Federal members (including non-military), term life insurance provides affordable coverage for a specific period of time, with a level death benefit and level premiums. Coverage is available in terms of 10, 15, 20, 25, and 30 years, and you can get quotes for $100,000 to $10 million in coverage online. 

Though Navy Federal facilitates the shopping process, they actually act as an aggregator for non-military member policies. Rather than Navy Federal issuing policies to non-military members, term policies are actually underwritten by partner providers such as Transamerica, Haven Life, Prudential, AIG, and others. Depending on the provider chosen, issue ages, term lengths, and coverage limits may vary.

Whole Life (All Members)

Navy Federal offers whole life coverage to all members between the ages of 18 and 65. You can get a quote online for anywhere from $10,000 to $150,000 in permanent life insurance coverage, and two riders (the accelerated death benefit and the automatic premium loan provision) are included at no extra cost. The policy builds a cash value over time that offers a guaranteed 4% interest rate.

Children’s Whole Life (All Members)

Navy Federal offers children’s life insurance coverage to all members, in the form of a whole life policy. This lifelong coverage can be issued from ages 14 days to 17 years, with coverage limits ranging from $10,000 to $75,000. No medical exam is required and the policy offers level premiums as well as two riders (accelerated death benefit and automatic premium loan provision) at no additional charge. There are opportunities to increase coverage up to 10 times the original amount without underwriting also.

Available Riders

Riders provide additional coverage on top of the life insurance policy’s death benefit. Some riders can be utilized while you’re still living, while others may provide added benefits to your loved ones after your death. Depending on the policy you choose, certain riders may be provided at no cost, while others involve an additional charge.

Accelerated Death Benefit

Available at no additional cost, the accelerated death benefit provides early access to the policy’s death benefit if the insured member is diagnosed with a terminal illness. In order to utilize the accelerated death benefit, the policy will need to be in place for at least five years. 

Child Benefit Rider

The child benefit rider offers $10,000 in term coverage to all of your dependent, unmarried children up to age 26. Children can be added well into young adulthood (applications just have to be submitted before their 21st birthday), and this rider only costs an additional $2.50 per month. 

Accidental Death Benefit

Though the death of any loved one is painful, accidental death is usually sudden and unexpected, adding even more trauma (and financial complexity) to the situation. With the accidental death benefit rider, beneficiaries will receive an additional benefit—on top of the policy’s existing death benefit—if the insured’s death is the result of a covered accident. 

Chronic/Terminal Illness Option

Available at no cost on Flagship Whole Life policies, this rider allows the insured to access up to 100% of the policy’s death benefit if diagnosed with a chronic or terminal illness, including those needing long-term care. The chronic illness option is only available to policyholders ages 60 or above, and the terminal illness option is only available to those with a life expectancy of 24 months or less.

Guaranteed Insurability Option (GIO) Agreement

Offered on whole life policies, this optional rider allows the insured to add more coverage to the policy at certain points in life. This includes ages 25, 28, 31, and 34, as well as when they get married and when they give birth to or adopt a child.

Extended Guaranteed Convertibility Rider

With this rider, you can extend your term life policy’s guaranteed insurability period—without the need for a medical exam—through age 70 or five years before the policy’s termination date, whichever is first.

Customer Service

You can contact Navy Federal Financial Group by phone at 877-221-8108. Representatives are available from 8 a.m. to 8 p.m. EST, Monday through Friday. The company encourages reaching out to their social media channels if you have questions or need help with an issue. The company’s Twitter handle is @navyfederal and their Meta page can be found at facebook.com/navyfederal. 

Once coverage is issued, you can manage your policy, make changes, or request information through your chosen carrier. Customer service options and hours will vary.

Complaint Index

The National Association of Insurance Commissioners (NAIC) assigns a complaint index to insurance carriers each year, which helps identify the number of complaints that a carrier receives compared to what was expected according to their size and market share. 

A company with an average number of complaints would receive a complaint index score of 1.0. An index below one means the company received fewer than the expected number of complaints, while an index higher than one represents more complaints than expected.

Though Navy Mutual writes life insurance policies, it does not have an NAIC complaint index score. However, the carriers that underwrite the policies offered through Covr do have individual complaint index scores. We checked the scores for each of these carriers, which tend to be about average if not better. The only notable outlier was Prudential, with a score of 8.65 for 2021.

Third-Party Ratings

Third-party ratings allow you to gauge a company’s reputation among consumers and stability within the industry. One of the most trusted third-party scores comes from AM Best, which offers financial strength and credit ratings to insurance carriers.

AM Best does not provide a rating for Navy Federal Financial Group, as it does not underwrite life insurance policies. Though Navy Mutual does issue coverage, it also does not have an AM Best financial strength rating as of February 2023. 

The policies offered to Navy Federal customers through Covr come from a variety of trusted carriers. We looked at the AM Best ratings for each of these carriers and found that the majority of them currently hold an A (Excellent) or A+ (Superior) financial strength rating.

Another trusted third-party rating comes from J.D. Power, which assesses consumer satisfaction trends among companies and carriers each year. Reports are published annually, rating overall top carriers on factors such as product availability, pricing, consumer satisfaction, and communication.

Though neither Navy Federal nor Navy Mutual is named in this study, many of the carriers offered through Covr are included. Mutual of Omaha, for instance, ranks third in the 2022 U.S. Life Insurance Study, Pacific Life boasts fifth place, and Nationwide takes sixth. 

Cancellation Policy

You are generally able to cancel a life insurance policy at any time, for any reason. Depending on the type of policy it is, though, there may be penalties and fees involved.

Term coverage can be canceled whenever you choose, without penalty. Since this type of policy doesn’t build a cash value, there is no return of funds once the coverage is canceled. There is a cash value component with whole life insurance, however, a portion of which will be returned to you if you decide to terminate coverage. This amount is usually subject to a surrender fee, which will reduce the amount you receive back.

The surrender fee and cancellation policies for your Navy Federal life insurance will depend on which policy you hold and which carrier underwrites the coverage.

Price

Navy Federal Credit Union members can get life insurance quotes online, whether they are military members or not.

Military member coverage is provided through Navy Mutual, which offers term and whole life protection. To get an idea of pricing, we requested a quote for term coverage through the Navy Mutual website. Our quote involved both a 35-year-old male and female, both non-smokers with no medical conditions or health concerns. Both sample quotes were for $500,000 in coverage with a 15-year term period; the male was 6’0” and 200 pounds, while the female was 5’5” and 145 pounds. Both were quoted a premium of $22.00 per month.

To get an idea of pricing for non-military members, we used the same sample criteria. Our quotes for the male applicant ranged from $20.94 (AIG) to $42.00 (Prudential) per month, while the female was quoted anywhere from $16.00 (Bestow) to $31.50 (Prudential) per month.

Competition

When it comes to buying life insurance coverage as a military servicemember (or eligible family member), both Navy Federal and USAA are dedicated to providing the necessary resources. Both companies have membership requirements—like being an active-duty or retired servicemember, being a DoD civilian, or qualifying as an eligible family member—but offer a range of financial products (including life insurance) once you join.

Both Navy Federal and USAA offer term and whole life insurance options, though USAA also offers universal life coverage. Both are available in all 50 states and Washington, D.C., but only Navy Federal offers the potential for dividends.

Navy Federal allows both military and non-military applicants to get term and whole life insurance quotes online, without needing to join or even sign in. By contrast, USAA offers limited pricing information online, but not until members log in to their existing accounts. 

Navy Federal’s policies, offered through Covr, are issued by companies like Bestow, which may provide coverage without the need for a medical exam. USAA generally requires a medical exam of all applicants.

If you’re looking for military-centered life insurance options, both Navy Federal and USAA are worthwhile companies. However, if you’re interested in comparing prices from multiple different carriers, getting quick online quotes, and potentially avoiding a medical exam, Navy Federal is the better option.

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Our Methodology: How We Review Life Insurance Carriers

In order to provide you with the most accurate and complete life insurance carrier reviews, we implement a comprehensive methodology. This includes looking at a carrier’s product availability, plans, personalization options, and pricing. We also consider factors such as consumer satisfaction, third-party ratings, and trusted industry scores.