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Penn Mutual is a historic company with a strong dividend-paying history, a low incidence of complaints, solid financial ratings, high-coverage no-exam life insurance, and affordable term policies.
It’s our pick for best whole life insurance company for dividends, in part, because it’s paid them for 174 consecutive years. The company offers life insurance policies to suit many people’s financial needs, investment goals, and budgets. But it falls short when it comes to website features and online information.
- Pros and Cons
- Company Overview
Well-priced term policies
Generous term conversion options
High coverage no-medical-exam life insurance
Strong dividend-paying history
Very few customer complaints
Limited website information
Online applications not available
Online quotes not available on the website
The Penn Mutual Life Insurance Company (“Penn Mutual”) was incorporated in February 1847 and is located in Philadelphia, Pennsylvania. As a mutual company, it is fully owned by policyholders, not stockholders; as owners, policyholders are eligible to receive annual dividends. In fact, Penn Mutual has consistently paid dividends to eligible policyholders for almost 175 years.
With annual premiums in excess of $2.5 billion, Penn Mutual ranks among the 25 largest life insurance companies in the U.S. by premium. Penn Mutual’s plans are available in all 50 states and the District of Columbia.
- Year Founded 1847
- Kinds of Policies Whole, term, universal, variable universal, indexed universal
- Payment Options ACH transfer, check, credit card
- Customer Service Email (firstname.lastname@example.org) or phone (1-800-523-0650)
- Official Website pennmutual.com
- Well-priced term policies: Penn Mutual has the fourth-cheapest term policies of the 32 companies we collected rates for. We gathered quotes across a range of ages for healthy males and females for 30-year $250,000 policies; Penn Mutual did well across all age groups.
- Generous term conversion options: Penn Mutual lets you convert its Guaranteed Convertible Term policy to any of its whole life products. This is a nice feature compared to some companies that don’t make their entire portfolio available for term conversion. Plus, you can convert the death benefit to permanent coverage during the term period selected, up to 20 years, or until you turn 70 (whichever happens first). Other companies may require you to convert within the first 10 years of the policy, for example.
- Strong dividend-paying history: The company has the longest dividend-paying history of the 91 life insurance companies we reviewed. It’s paid them for the past 174 years. New York Life comes in at a close second with 168 straight years of life insurance dividend payments.
- High coverage no-medical-exam life insurance available: A number of Penn Mutual policies can be opened without a medical exam for coverage up to $7.5 million, and coverage may be approved the same day. This is the highest amount we encountered for no-medical-exam life insurance in our research, and Penn Mutual claims it’s the highest amount out there.
- Very few customer complaints: Only 10 customer complaints were filed against Penn Mutual for life insurance in 2021, and only seven in 2020. As one of the country’s largest insurance companies, this is impressive.
- Limited website information: Coverage summaries on Penn Mutual’s website are overly general. Customers will have to explore the site carefully or call a company representative to get more detailed descriptions of the various policy offerings.
- Online applications not available: Some companies let you apply for term policies or guaranteed issue policies online without the help of an agent. But to open a new plan with Penn Mutual, customers must reach out to a representative.
- Online quotes not available on the website: While many other insurers’ websites provide quick life insurance quotes for term coverage, Penn Mutual’s does not. For pricing information on any policy, you’ll need to contact an agent.
Penn Mutual is in the top 15% of all companies we reviewed in terms of low numbers of complaints. This is based on data from the National Association of Insurance Commissioners (NAIC).
The NAIC annually releases a complaint index for U.S.-based insurance companies. This index is a means by which to compare companies in terms of the number of complaints filed by policyholders and the company’s size.
A company that receives an expected number of complaints for its size will have a complaint index of 1.0. A number less than 1 means the company received fewer complaints than expected, while a number greater than 1 means it received more. An index of 2, for example, would indicate twice the expected number of complaints.
Over three years, Penn Mutual’s complaint index averaged 0.126, meaning the company received far fewer complaints than expected.
AM Best publishes a yearly list rating U.S. insurance companies on their financial strength. Penn Mutual has an A+ rating, the second-highest of AM Best’s rating categories. An A+ indicates the company has a superior ability to honor its ongoing insurance obligations, such as paying claims.
When shopping for life insurance, it’s crucial to choose a strong company that has the features you want. It’s also helpful to see how the company stacks up against its competitors.
|Penn Mutual||Guardian Life Insurance||Mutual of Omaha|
|Types of Coverage||Whole, term, universal, indexed universal, variable universal||Whole, term, universal, variable universal||Term, universal, indexed universal, variable universal, final expense|
|Dividends for 2022||$123 million||$1.13 billion||Not applicable|
|Online Application||No||No||Yes, for guaranteed issue whole life|
|AM Best Rating||A+||A++||A+|
|Price for Term Policies||Very good||Average||Average|
|NAIC Complaint Index (averaged over 3 years)||0.126||0.110||1.067|
Our ratings take into account NAIC complaint index scores and AM Best ratings. The NAIC complaint index indicates how many complaints a company receives relative to its size. AM Best assesses a company's ability to pay its claims on a graded scale, with A++ being the highest. All our best life insurance companies have at least an A rating.
Penn Mutual offers a wide range of insurance policies, which are described below, and most of its life insurance products are eligible for no-med-exam underwriting for up to $7.5 million in coverage.
Term life insurance pays a benefit to designated beneficiaries if you die within a specified period of time (e.g., 15 or 30 years). It offers coverage at a fixed premium rate but does not earn cash value and expires at the end of the designated term. Penn Mutual offers the following term policies:
Guaranteed Convertible Term: These policies offer short-term protection in 10-, 15-, 20-, and 30-year terms with an option to convert to permanent coverage before the age of 70, or for the first 20 years of a 30-year term.
Protection Non-Convertible Term: As its name suggests, this plan offers terms of 10, 15, 20, and 30 years without the option to convert to permanent coverage. These are Penn Mutual’s most affordable term policies.
One-Year Term: This policy renews annually at a higher rate each year. But you can convert it up to age 84 to any Penn Mutual permanent product.
Whole life insurance pays a benefit to beneficiaries when the policyholder dies. It is guaranteed to remain in place for the insured’s entire lifetime if the premiums are paid. Over time, the policy builds cash value, which the insured can borrow against or withdraw from if necessary. Here are Penn Mutual’s whole life offerings:
Guaranteed Whole Life II: This policy gives death benefit protection to age 121 with locked-in premiums. Policies can be opened from birth to age 85 inclusive, with the option to pay off the premiums early, so you can avoid paying them during retirement. Payment periods are up to every five years until age 100. The policy can be customized with a host of available riders.
Survivorship Whole Life: This whole life insurance policy covers two people (for example, spouses or business partners), and transfers to the surviving person insured after the death of the first. It features a 10-year payment plan, an option to spread out premium payments until age 100 of the surviving insured, and a guaranteed death benefit to age 121 of the surviving insured.
Universal life (UL) insurance is a permanent life insurance policy that, like whole life, has a cash value. It grows according to an interest rate that’s determined by the insurer, and often has a contractually guaranteed low-end rate. UL policies are more flexible than whole life; the policyholder can vary the amount of the death benefit or the premium payment as long as certain other conditions are met. However, in some cases, premiums may need to be increased in the policy’s later years to continue coverage.
Penn Mutual offers the following UL policies:
Guaranteed Protection UL: This plan offers lifetime death benefits at a competitive price and has no-lapse guarantees until age 121. It also features the ability to change the payment approach at any time. A chronic illness accelerated death benefit is automatically included at issue.
Protection UL: A lower-cost option than Guaranteed Protection UL, this policy offers no-lapse coverage until age 100 and favorable premium and coverage guarantees after age 90. Premium and death benefit flexibility, plus the ability to skip a premium payment and catch up if the policy has sufficient cash value, are other components of the plan. A no-cost chronic illness accelerated death benefit rider is included at time of issue.
A no-lapse guarantee and no-lapse rider keep a policy from lapsing, regardless of the policy’s net cash value.
Variable Life Insurance
Variable universal life (VUL) insurance is a type of permanent coverage that lets you invest the policy’s cash value in the stock market via subaccounts, which are like mutual funds. It’s considered the riskiest type of life insurance since the cash value can lose money if investments perform poorly. For this reason, the policy is more likely to lapse, relative to other types of permanent coverage.
Diversified Advantage Variable Universal Life (VUL): This policy offers income accumulation potential through variable accounts but also gives you the option to tie cash value gains to indexed accounts, which aren’t directly invested in the market. This is a unique offering in that it combines the features of a VUL policy and an IUL policy into one.
Protection VUL: Protection Variable Universal Life offers guaranteed lifetime protection via a no-lapse guarantee rider that is automatically included at no extra cost. Lower-cost investment options are available. The policy does not offer indexed accounts like the Diversified Advantage VUL.
Indexed Universal Life Insurance
Indexed universal life (IUL) insurance policies are designed to find a happy medium between the high-risk nature of VUL policies and the relative predictability and low-risk nature of UL and whole life policies. A common misconception is that the cash value in these policies is invested in a market index, like the S&P 500. But the cash value isn’t directly invested; rather, it’s credited gains (but not losses) based on the performance of the index it’s tied to.
Penn Mutual offers two IUL policies:
Accumulation Builder Flex Indexed Universal Life (IUL) : When a universal life policy is pegged to a financial indicator (e.g., a stock, bond, or interest rate), it is said to be indexed universal life insurance. This policy from Penn Mutual is tied to the Standard & Poor's 500 index. It features five indexed account options, including a high-capped and uncapped option, plus a fixed account. Its guaranteed minimum floor is 1%.
Survivorship Plus Select IUL: This policy provides coverage for two people and benefits to beneficiaries when the last insured person dies. This policy is tied to the S&P 500 and/or the S&P Global Broad Market index. Five indexed account options are available. The plan features a 1% floor and guaranteed policy enhancement at age 51 or year 11 of the policy, whichever comes later. It includes a standard 20-year no-lapse guarantee and up to 13 riders to enhance value, including an extended no-lapse rider.
A “cap” limits gains in an IUL policy. For example, if your cash value is tied to the annual performance of the S&P 500, but the account is capped at 6%, then the most your cash value will be credited is 6% even if the index performs well above that amount.
Riders are provisions in an insurance policy that extend protection or provide additional coverage to a plan. While most riders are elective and require an additional payment on top of the regular premium, some are offered free of charge depending on the policy type, such as Penn Mutual’s Chronic Illness Accelerated Benefit.
Several of Penn Mutual’s riders are described below:
Guaranteed Increase Option
Penn Mutual’s guaranteed insurability rider allows the policyholder to increase coverage without taking a medical exam. The rider is available to be exercised at ages 22, 25, 28, 31, 34, 37, 40, 43 and 46; or if you get married or have a child (including legal adoption). You must be 40 or younger to add this rider.
Children’s Term Insurance Rider
This rider pays a benefit up to $25,000 upon the death of a child of a policyholder. It can be added for children up to age 17, and coverage stays in force until age 23. There is only one charge applied regardless of how many children you have. Each child can convert this term coverage to permanent life insurance on the policy anniversary nearest their 23rd birthday.
Disability Waiver of Premium Rider
Penn Mutual offers more than one waiver of premium rider for disability. Each waives premium charges if you become disabled, provided a four-month waiting period is met.
Accelerated Death Benefit (Terminal Illness Rider)
Penn Mutual’s terminal illness rider is triggered when policyholders have been diagnosed with a terminal illness and have 12 months or less to live. The amount is paid as a lump sum and cannot exceed 50% of the face amount of the policy or $250,000, whichever is less. Some Penn Mutual policies offer this rider at no additional cost.
Chronic Illness Accelerated Benefit
Similar to but distinct from the terminal illness benefit, the chronic illness benefit allows policyholders diagnosed with a long-term, chronic illness to access part of their death benefit while still living, regardless of their life expectancy. It’s triggered if you can’t perform at least two activities of daily living (ADLs) or suffer a severe cognitive impairment for at least 90 days. Most Penn Mutual permanent policies automatically include this benefit.
An accelerated death benefit, also known as a “living benefit,” is a provision in many life insurance policies that allows the insured to receive part of their death benefit while they are still alive.
Accidental Death Benefit Rider
Not to be confused with an accelerated death benefit, the accidental death benefit rider extends life insurance benefits to include an extra lump-sum amount if death of the insured is the direct result of an accident. The payment is determined by the amount of the policy’s coverage and the rider.
The Penn Mutual website may be accessed any time at pennmutual.com. A client service hotline (800-523-0650) is available Monday through Friday, from 8:30 a.m. to 6 p.m. Eastern Time. Customers can contact its support team 24 hours a day at email@example.com. Policyholders are able to manage their accounts or file claims online.
Penn Mutual offers some very affordable term policies. In our review of quotes from 32 life insurance companies, for males and females in excellent health, across three different age groups, Penn Mutual ranked fourth for cheapest term coverage for each age group and overall. It’s important to note, however, that of Penn Mutual’s two available term policies, its nonconvertible policies are the ones that have the cheapest coverage. Convertible policies may cost more.
Who Is Penn Mutual Best For?
If you don’t mind getting in touch with an agent for a quote and policy information, Penn Mutual is a solid choice to consider. Its wide range of products, policy perks, and no-exam options make it suitable for a wide swath of applicants. Most notable are its long history of dividend payments and ultra high-coverage no-medical-exam life insurance. In other words, if you want a multi-million-dollar dividend-paying policy and would prefer to avoid an exam, Penn Mutual could be the company for you.
At the other end of the spectrum, there are also a lot of reasons to love its term policies, including long-lasting conversion options, the ability to convert to any available permanent product, and the price.
But if you just can’t stomach a company that isn’t willing to provide policy details or a term quote on its consumer-facing website, you may want to check out our list of the best term life insurance companies to find those features.
Our Methodology: How We Review Life Insurance Carriers
We designed a comprehensive ranking methodology based on consumer priorities and life insurance company fundamentals to rank more than 90 insurers across five general categories: financial stability, customer satisfaction, product and feature variety, the overall buying experience, and cost.
In order to do this, we collected over 5,000 data points and scored each company based on 55 metrics. We grouped metrics by category to see how insurers performed in each; we then weighted category scores to determine how companies performed overall.
To learn more, read our full Life Insurance Methodology.