Updated May 7th, 2020
Allstate Whole Life Insurance Review
Allstate was founded originally in 1931 and Domiciled in Northfield Township, Illinois.
Its famous slogan has been a great success: “You’re in good hands.”
However, in this Allstate Whole Life Insurance Review, we evaluate if you are in good hands?
Life Insurance is just one of the ways that Allstate is serving the public. Many will recognize the name Allstate more for Home/Auto insurance.
In this Allstate Whole Life Review, you will discover more about the company, its financials, and if you should be buying whole life insurance from them.
At TopWholeLife, we work with only the top whole life insurance companies.
We make sure you are an informed buyer before making critical decisions to protect your family with whole life insurance.
If you are looking for a quote, request one right here on our site.
Now let’s dig into the Allstate Whole Life Insurance Review 2018
Allstate Home and Auto
Allstate is a large company that has helped a lot of people through its various insurance products.
The company is best-known for Auto and Home insurance.
Over the years to stay more competitive, Allstate has expanded its product offerings to life insurance, in addition to its bread and butter.
Allstate was initially founded in 1967 by Sears, Roebuck & Co. Allstate company operates in a business model called ” Captive.” A captive company is where the agents who are working for Allstate are not allowed to offer you other products. They are only allowed to provide you with Allstate’s solutions.
Allstate has various recognition and accolades to note.
- America’s Most Admired Company by Fortune Magazine.
- Top 50 pick for Diversity.
- Best 100 Companies for Working Mothers.
- Acknowledgments for innovation and technology in the industry
Allstate has a history of keeping its promises. It makes sense that they coined the phrase “In Good Hands.”
Below you will find a quick graphical overview of Allstate’s financial asset distribution.
As you can see, the left-hand graph is showing the distribution of Allstate’s assets and Investments. The investment distribution is critical. Because it can help you decide if the company has spread its risk enough to offer you a stable policy that will be in force when you need it.
As with many life insurance companies, Allstate heavily invests in bonds with 64.3% of its total assets.
Also, graph number two on the right outlines the past five years of Allstate’s investment returns. The investment returns will give you some clarity as to what the company has accomplished with its assets. Follow the graph from the left 2013 to the right 2017, and you will see the company’s return percentages.
Over the past five years, Allstate has averaged a 4.71% return on their portfolio. Allstate’s performances may not sound too exciting, but the takeaway is this company produces consistent profits, and as a consumer, that is a good thing.
Net Yield on Mean Invested Assets
The following is a list of how Allstates has invested the money the collect. This is important because it gives us an idea of how well they will maintain their promises.
- 2017 – 4.69% (Industry Average 4.1%)
- 2016 – 4.62% (Industry Average 4.01%)
- 2015 – 4.78% (Industry Average 3.94%)
- 2014 – 4.52% (Industry Average 4.04%)
- 2013 – 4.94% (Industry Average 4.03%)
5 Year Average – 4.71% (Industry Average 4.02%)
As you can see they are above average which is good.
Allstate’s Asset Analysis
As we continue our analysis below, we have noted Allstate’s total admitted assets (what they own) and total liabilities (what they owe). These numbers are important because you will be able to see how large the company is.
You also want to make sure that the company’s assets will always cover their liabilities because this will protect you as a consumer. Think of the below information as the company’s NET WORTH.
- Total Admitted Assets: $31,567,314
- Total Liabilities: $28,159,175
- Separate Accounts: $3,406,576
- Total Surplus & AVR: $4,335,55
Allstate’s Operating Income Analysis
The operating income analysis may not be as important to you when deciding on what life insurance company to go with; however, we believe it is good to have as much information as you can.
The operating income analysis is a high-level view of Allstate’s budget. You can easily see their income and then expenses just like any household budget.
- Total Income: $2,083,285
- General Expenses: $251,742
- Total General Expenses/Total Income: 12.1%
- Earnings Before Policy Dividends & Taxes: $1,254,606 *
- Policy Dividends: $5
- Policy Dividends/Earnings: 0.0%
- Pretax Earnings from Operations: $1,254,601
- Federal Income Tax: $404,645
- Income Taxes/Pretax Earnings: 32.3%
- Earnings from Operations (Net): $849,956
- Realized Capital Gains (Net): ($3,215)
- Income (Net): $846,741 *
- As % of Admitted Assets: 2.7%
- Unrealized Capital Gains: $444,164
This part of the analysis is simple. Did Allstate make any money? Well, as a matter of fact, yes, they did. The income from their investments was a whopping $1.279M. Not bad for a year’s work.
Return on Assets: 2.6%
Return on Equity 27.9%
Net Investment Income: $1,279,719
Required Interest: $1,009,896
Interest Margin: 16.3%
Allstate’s Life Insurance Products
We not only want to review whole life, but also Allstate’s other life policies. Allstate offers three different types of permanent life insurance (Whole Life, Universal Life, Variable Life). And they offer a term life insurance policy, which we will review later.
Whole Life Insurance
- Fixed premium payments.
- Excellent protection. Specially for people thinking about retiring or anyone who wants to guarantee money to their loved ones.
- There is potential to earn excess credits from the policy. These are in cash, accumulate interest, used to buy more life insurance, or it can help to reduce premium payments/outstanding loans.
- The cash value will increase regardless of market conditions.
Universal life Insurance
- Flexibility Premium, you can adjust your plan over time.
- The cash value will grow and offer the security of market downside protection.
- Excellent protection. Especially for people who are going into their prime earning years, especially if you need lifelong protection.
Variable Life Insurance
- Flexibility Premium, you can potentially adjust your plan over time.
- Excellent protection for investment-savvy individuals.
- It gives you the ability to choose where to invest your cash value.
- Potentially use your cash value as a retirement supplement.
Analysis of Face Amount of Insurance
What is the face amount? The face amount is a term used to describe the death benefit amount of an insurance policy. As you can see below, Allstate has a lot of insurance in force. It is interesting to note that the average-sized policy that Allstates sells is $187K.
Current overall Life Policies in Force: $2,056,550
Average overall Policy Size (in dollars): $186,411
Of Life Policies issues in 2017: Average Policy Size (in dollars): $80,855
In 2017 specifically, the average policy size seemed to have declined. It was $80,000, which falls below the overall average policy sold for the company.
Allstate’s Policy Lapse Ration
What is lapse?
When policy goes unpaid, the plan goes into what is called a grace period. If the customer does not pay a premium during their grace period, then the policy would then lapse for non-payment.
We like to keep an eye on companies’ lapse ratios, as this can be a sign of a company is not retaining its customer base from year to year. As you can see below Allstate’s last three-year average lapse ration is 6.9%
2017 Lapse Ratio: 6.8%
3-Year Average Lapse Ratio: 6.9%
The above numbers, particularly the average policy size, says a lot about what market Allstate provides solutions.
As we reviewed above, Allstate offers several different types of life insurance.
Their goal is to become somewhat of a one-stop-shop for all insurance needs, including homeowners and car insurance.
Allstate does provide permanent life insurance; however, one of their biggest product offerings is a term insurance policy.
Allstate, as every other company, offers term insurance. The great news is you can get quotes online very easily. So let’s review Allstate’s term options.
This Term Insurance Policy offered by Allstate is called TrueFit Term.
TrueFit is a basic policy providing a level premium and death benefit for 15 years, or 30 years.
It is an excellent policy, and by its design, it is their most popular.
Coverage amount varies from $200,000 to $2,000,000.
Next, we will give you a few quotes from Allstate’s website.
1. Healthy Female age 30 Non-Smoker — $ 250,000 of coverage for 15 years.
2. Healthy Female age 30 Non-Smoker — $ 250,000 of coverage for 30 years.
1. Healthy male age 30 Non-Smoker — $ 250,000 of coverage for 15 years.
2. Healthy male age 30 Non-Smoker — $ 250,000 of coverage for 30 years.
A huge reason why this option is so popular with customers is that TrueFit Term does not require a medical exam to qualify.
So if you are someone who is in desperate need of life insurance because you have some adverse health conditions, this could be a good option.
Be advised this is not a Guaranteed Issue Policy, and there will still be some health questions on the application.
Due to the simplified underwriting requirements, this policy can be approved and issued very quickly.
The TrueFit Term can be customized; however, this can alter the time it takes to be approved. You can choose different time frames for coverage (10 or 30 years). Allstate also offers riders that can be added to the policy (at additional cost) to fit your needs perfectly.
Allstate’s TruFit Term life insurance is a great option. However, the most significant downside is that the Term coverage is not convertible into Whole Life.
A non-convertible term policy means you cannot change it into whole life in the future. You may find yourself left without life insurance or a premium bill too costly to afford.
Finally, in this Allstate Whole Life Insurance Review 2018 has covered a lot of information. Allstate has a history of quality business practices. The company may be a great place to protect your home or car.
Potentially it is a good company for simplified life insurance, but we would say that if you are looking for a whole life insurance policy, it would be best to look elsewhere for this coverage.
Check out some of our other top whole life reviews: MassMutual Whole Life Insurance Review, Ohio National Whole Life Insurance Review & New York Life Whole Life Insurance Review. Geico Insurance Review.