It’s not an easy task to find the best life insurance policy that fits all your health and financial needs—especially considering there are over 700 life insurance companies in the US to file through.
Purchasing life insurance is a long-term commitment with serious financial variables to think about. That’s why we’ve taken two of the top life insurance companies and compared them for you.
In this article, we take a look at Penn Mutual vs. MassMutual. Keep on reading to find out what they have to offer.
Penn Mutual Life Insurance Co.
Originating in Philadelphia, Pen Mutual Life Insurance came about in 1847 and has sold life insurance to people for over 170 years. So if you’re looking for a life insurance company with a long solid record, they’ve got it.
They’re also one of the highest-rated insurance companies in their field.
- A.M. Best rating of A+ (Superior)
- Moody’s Investors Service rating of Aa3 (Excellent)
- Standard & Poor’s rating of A+ (Strong)
- Comdex rating of 93
Due to its extensive history and financial strength, Penn Mutual is a good investment for anyone looking to buy life insurance policies or annuity products for individuals and families. Penn Mutual also offers business life insurance for small businesses.
Penn Mutual Life Insurance Policies
Not all life insurance policies are one-size-fits-all. That’s why it’s essential to have options when it comes to choosing an insurance plan. For example, Penn Mutual offers three different life insurance plans—term life insurance, universal life insurance, and whole life insurance.
Term Life Insurance
Purchase term life insurance policies at Penn Mutual of 10, 15, 20, and 30-year terms. Term life insurance is purchasable for customers up to the age of 70.
Penn’s term life policy has a fixed value that is decided at the time of purchase. The money is distributed as a death benefit on the condition that the policy is in effect when the policyholder passes away. If the customer lives past the policy term, the policy is converted into permanent life insurance.
With their Guaranteed Convertible term policy, Penn Mutual allows policyholders to convert all or some of the policy to permanent coverage without updating their current health. This allows you to get a lot of coverage during a low-income period and then convert to a better policy once you’re more financially able.
Term policies do not build cash value. This means no loans or access to cash value is available.
Universal Life Insurance
Penn Mutual offers several types of permanent life insurance policies, including universal life insurance. They also offer variable universal life, survivorship universal life, guaranteed universal life, and current assumption universal life.
Universal life policies offer flexible premiums. It also allows customers to use the cash value of the policy to cover missed payments.
Variable Universal life policies have premiums that change throughout the lifespan of the policy. This allows you to customize your payments to fit your financial needs.
With an indexed universal life policy, you get to base the cash value growth of your policy on an index—for example, the S&P 500. In this plan, the cash value is based on investments you decide on. You get to build your own portfolio depending on your risk tolerance.
Whole Life Insurance
Penn Mutual offers a whole life and a survivorship whole life policy. With a whole life policy, you see guaranteed premiums while the cash value grows at a guaranteed rate.
On top of the guaranteed rate, additional value is added when dividends are paid. Although dividends are not a guaranteed thing, Penn Mutual has a record of paying policyholders dividends every year since it was founded.
It’s also good to note that Penn has critical care included in all life policies above a table D rating. This means that if you fall terminally ill, Penn Mutual will give you a lump sum payment.
Universal and whole life insurance are types of permanent life insurance. Permanent life insurance provides death benefit protection for life and the ability to grow cash value that you can access at any time. In addition, Penn Mutual offers policyholders the ability to borrow money against the policy’s cash value whenever they want.
Penn Mutual Rates
Unfortunately, Penn Mutual doesn’t offer an option for online quotes. To find out insurance quotes in your area, you’ll have to call an agent in your region.
Paid Dividends
Pen Mutual is a mutual company. This means it’s a private insurance company that its policyholders own.
When you buy a whole life insurance plan, you get to share in dividend payouts if and when the company profits. In 2020 alone, Penn Mutual’s dividend payout to policy owners was $100 million total.
The average dividend rate from the past 15 years is 6.25%. There was a high of 6.34% between 2008 and 2018 and a low of 5.75% currently in 2021. Penn Mutual’s current total share of the market is just over 1%.
NOTE: A dividend rate is a percentage paid out each year relative to the companies stock price.
Direct Recognition
Penn Mutual uses direct recognition when calculating dividends in cases of an outstanding policy loan. What this means is the policy loan reduces the amount of cash value recognized by Penn Mutual.
Because your dividend amount is calculated using your policy’s total cash value, you receive fewer dividends when you have an outstanding loan policy. So, in the end, direct vs. non-direct recognition are just two different ways to calculate the same thing.
MassMutual Life Insurance Co.
MassMutual is another company with a long, rich history. Founded in 1851, they’ve provided life insurance to people around the country for over 160 years.
They’re also one of the highest-rated insurance companies in their field.
- A.M. Best Company rating of A++ (Superior)
- Fitch Ratings gives AA+ (Very Strong)
- Moody’s Investors Service rating of Aa3 (High Quality)
- Standard & Poor’s rating of AA+ (Very Strong)
Given their prudent investment strategies over the past 160 years, they hold long-term commitments in mind. MassMutual is another insurance company that has a good record of financial strength and stability.
MassMutual Life Insurance Policies
Although MassMutual doesn’t seem to offer as many types of insurance policies, they offer term life, universal life, and whole life policies.
Term Life Insurance
Most MassMutual term life policies have guaranteed level premiums for a specific time. However, after 10 or 20 years, these premiums usually increase significantly.
Term life applicants must be 18 years of age or older. The age eligibility goes up to 75 years on 10-year term and annual renewable term policies. Generally speaking, every five years added to the term, the max-age reduces by five years.
They also offer convertible term life without asking any medical questions or charging fees. With this feature, you can easily access policies that offer financial benefits when the time is right.
With MassMutual Direct Term, you can apply online and receive an immediate decision. This policy is designed for people between the ages of 18 and 64 and offers coverage from $100,000 to $3,000,000. All other policies are only available through an agent.
Universal Life Insurance
MassMutual allows you to decide how much premium you pay and how often with their variable universal life insurance plan. As long as you have enough value in your policy to cover costs, you can pay less in premiums when you need to.
Also, depending on the premium you pay, your account can build value. Once your account builds enough value, you can then borrow money from your policy for any reason.
Participating Whole Life Insurance
MassMutual’s whole life policies ensure a guaranteed death benefit paid in a lump sum upon the policy holder’s death. In addition, they offer longer-term care, which is similar to Penn Mutuals’ critical care policy.
Whole life insurance policies offer the opportunity to earn dividends and a cash value guaranteed to build over time. In addition, eligible universal and whole life insurance policies allow you to borrow money from the accrued cash value of the policy.
Paid Dividends
Mass mutual has a current dividend of 6.0% and ranks #1 in the US. Over the past 15 years, they’ve averaged a rating of 7.14%.
Just in 2020, the company paid $1.7 billion to its members who qualified to receive dividends. The reason for MassMutual’s large payout to policyholders is because it controls 6.4% of the entire life insurance market share. This is a pretty big chunk considering there are hundreds of life insurance companies in the US.
Penn Mutual vs MassMutual
When comparing the two companies side by side, you see that Penn Mutual and MassMutual have an extensive history of good business practices. Both companies have been very consistent in their ability to pay dividends to their policyholders while seeing growth within the business.
MassMutual is the bigger of the two and ranks higher in dividend payouts. They also receive slightly higher company ratings than Penn Mutual.
It’s also noted that MassMutual offers greater cash value for specific policies within the first ten years than Penn Mutual. So if you’re a customer looking to become your own banker by borrowing cash from your policy, this could be reason enough for choosing them over Penn Mutual. Additionally, MassMutual also has a low loan rate of 4%, whereas other insurance companies are around 5%.
Both companies offer a wide variety of life insurance policies with plenty of riders to choose from. Riders allow you to customize your loan policy to fit your needs and financial ability to pay premiums.
Choosing the Right Insurance Plan
Choosing the right insurance plan for you comes down to asking yourself the right questions. For example, how much coverage do you need, and for how long do you need it?
How high of a premium can you afford, and what kind of benefits would you expect from your policy? Would you like to borrow cash from your policy eventually?
These are some questions to consider when picking the right insurance plan. In addition, the company you choose your plan from should have a good history of stable investments, dividend rates, and company ratings.
If you need help finding the right insurance plan for you, reach out to us! We’re here to help you compare policies and receive quotes—all online!
