With so many insurance companies out there, it’s crucial to pick the right one when choosing a policy. William Penn Insurance of New York is one of the more highly rated options, with over 60 years of experience in the industry.
So, to help you make the best decision for yourself and your loved ones, we wanted to do a deep dive into this company and how it operates. We’ll also discuss the various life insurance options you can buy, and whether they would be an ideal choice for your needs.
William Penn Insurance Company Profile and History
Although the company was founded in 1949, it wasn’t called William Penn at the time. Instead, it was named the Government Employees Life Insurance Company, or GELICO for short. It was formed with a sister company that still exists today – GEICO.
In 1981, GELICO was bought by the Legal & General Group, who changed the name to Banner Life. If you’re looking for insurance from William Penn outside of New York, you can find it under the Banner name, or you can get a policy through Legal & General. The name William Penn is only in use in the state of New York, thanks to legal regulations for life insurance companies.
As of 2018, William Penn had over $670 billion of in-force life insurance, which is comparable to some of the biggest brands in the world. This number is particularly impressive because Legal & General doesn’t advertise itself as aggressively as other insurance companies.
William Penn Financial Ratings
If you’re not familiar with how insurance carriers are rated, there are a few standards to pay attention to. Here is a quick breakdown.
A.M. Best Rating: A+
This agency looks at life insurance companies specifically and grades them based on the brand’s capability to pay active policies. The highest rating one can get is A++, with the worst being an F. Very few insurers have an A++ rating, so William Penn is among the top in the industry.
Standard and Poor (S&P): AA-
Rather than looking at life insurance, the S&P rates businesses on their credit history and trustworthiness. The highest rank on the S&P is AAA, and the agency will assign a plus or minus within each grade. Although William Penn isn’t a triple-A company, the AA- rank is still a high mark. So, you can feel confident in buying from the brand since it has a strong credit history.
As a note, Moody’s Investors Service is another agency that weighs companies on their credit rating. William Penn doesn’t have a Moody’s score, though. Since not all businesses do, this lack of a grade shouldn’t be an issue.
Better Business Bureau: A+
If you want to see how well a company treats its customers and employees, a BBB rating is an excellent benchmark. If a business has too many complaints or doesn’t address them promptly, its score will go down. Although William Penn doesn’t have a flawless record, its BBB ranking is a valid indication of quality.
William Penn Insurance Offerings
As you can see, buying a policy from William Penn can be a smart move. However, each insurer has different options and coverage levels, so you need to be sure that it will work for your needs. This company has three types of life insurance: term, universal, and final expense. Here, we’ll break down each plan and discuss whether it might be right for you and your family.
Term Life Insurance
As the purest form of life insurance, most individuals will want to get a term policy. William Penn offers OPTerm coverage for 10, 15, 20, and 30 years. The company also allows policyholders to convert their plan to universal insurance within the first 20 years, or up to age 70.
The best part about converting with William Penn is that a medical exam isn’t required, so you’ll retain the same health rating as when you got the original policy. However, keep in mind that insurance companies are always trying to protect their assets, so this rule isn’t set in stone. If your agent believes a new life insurance exam is necessary, you might have to get one to reassess your level of risk.
One downside of OPTerm insurance is that it’s non-cancellable. So, if you buy a 20-year term and want to cancel before it expires, the company won’t allow you to. On the other hand, you can renew your policy as it gets closer to maturing, which can be a massive benefit for policyholders.
As far as pricing goes, it depends on several factors:
- Whether you’re male or female (women generally pay less)
- Whether you’re a smoker
- Your age and health rating
- How much coverage you want
For example, a 30-year-old woman, non-smoker, in good health, with a $500,000 policy, can expect to pay about $17 per month for coverage. A man with the same credentials would pay almost $20 instead.
Who Needs Term Life Insurance?
In many cases, a term policy is the best way to provide peace of mind for you and your loved ones. Because these plans are highly affordable and they can cover you for up to 30 years, they will work for almost any situation.
Before buying life insurance, the primary consideration is, “why do I need coverage?” Some example reasons can include:
- Family Protection – You have young children who would need financial care if you died.
- Asset Protection – Your spouse or significant other can’t afford to make house or car payments without financial assistance.
- Inheritance – Although life insurance policies can’t pay out to minors, you can put the money into a trust that your children will receive at a specific age.
Overall, the best thing to do is to determine how much coverage you need and for how long. For example, you may decide that life insurance isn’t as necessary once your kids are grown and out of the house.
Another consideration for term life insurance is to get a policy while you’re still relatively young and healthy. While a 30-year-old can pay $20 or less each month, that payment can go up to $70+ at age 50. The longer you wait, the more it will cost. Best of all, you can lock in lower premiums now that won’t increase as you get older.
Universal Life Insurance
When looking at life insurance coverage, the two primary options are term and permanent. Universal insurance is a form of permanent life insurance, but it does have one unique feature. Your policy will accrue cash value over time, which can be augmented by investing that cash into the stock market. As we’ll discuss in the next section, there are three options for managing your policy’s cash value: variable, indexed and guaranteed.
William Penn offers a lot of flexibility with a universal policy. One feature is the short pay option, which allows policyholders to prepay premiums over a shorter period. For example, you could pay extra for the next 10 or 15 years and use that money to cover your premium payments after that. This method allows you to save funds later on (i.e., in retirement) without losing coverage.
Another benefit is that you can lock in lower premiums that won’t increase throughout the life of the policy. However, the trade-off is that your plan will mature at an earlier age, like 95 or 100. So, if you outlive your insurance, you’ll receive any remaining cash value and lose your death benefit.
Because universal insurance comes with so many variables, you will have to talk to an agent for pricing. However, since William Penn was one of the first companies to offer this kind of coverage, they have some nice options available.
Who Needs Universal Life Insurance?
Overall, the primary benefit of paying for this type of coverage is to build cash value into the plan. You can use this fund for several reasons:
- Premium Payments – If you want to avoid paying for life insurance during retirement, you can dip into your cash value to cover your premiums. Just make sure you pay attention to how much is left so that you don’t run out and lapse your policy.
- Life Events – Since this money is yours, you can borrow against it for something like a home loan or college. Better yet, you don’t have to repay the loan – your cash value will just be smaller as a result.
- Retirement Annuities – For those who want guaranteed income in retirement, a universal policy can be a smart move. Annuities pay out annually once you reach 65, and you can set up how much you receive each year.
As we mentioned, universal policies are unique in that you can grow your money by investing it. Here is an overview of the three ways you can do this.
- Guaranteed Life Insurance – In this case, your funds can grow, but they can’t dip below the amount you’ve paid into the plan.
- Indexed Life Insurance – Your cash value is invested into some type of index.
- Variable Life Insurance – This is the riskiest option, as you could potentially lose money in a recession or stock market crash. However, your funds are tied to the market, so you can also earn a lot more in the long run.
When you make your premium payments each month, you have the option of adding extra. This overage goes into your cash value fund. Each insurance company has minimum and maximum payments for universal policies, so be sure to talk to your agent.
Overall, if you can contribute to your policy regularly, then this coverage can be better than putting money into a savings account. However, if you want to minimize your premium payments, it’s probably better to get a term policy instead.
Final Expense Insurance
The last coverage option offered by William Penn is final expense insurance. This is a unique policy type since it’s something of a mix between term and permanent coverage. These plans are much more limited in scope, but they can offer financial protection for vulnerable individuals.
Typically, those who are already 60 or older, or those with underlying medical conditions should consider final expense insurance. The reason for this is that William Penn won’t deny coverage as it would for term or whole policies.
For example, if you’re 70 years old, you can’t get term insurance anywhere. However, you can get a final expense policy to help cover things like your funeral and memorial service. Here are the primary benefits of this kind of coverage.
- Guaranteed Acceptance – If you have a terminal illness or your age prevents you from getting another policy, you can still get financial peace of mind.
- Lower Death Benefits – Typically, final expense insurance caps off at $25,000-$50,000, depending on the company. You will have to talk to William Penn to see what options they provide.
- Graded Benefits – Unless you’re in excellent health, you will likely have a two-year waiting period. If you die during this time, your beneficiaries will receive less than the full death benefit.
- Higher Premium Payments – In many cases, final expense insurance can cost a lot. However, if you’re worried about leaving financial burdens for your family when you pass, these plans can be worthwhile.
Overall, anyone who can’t get term or whole life insurance should consider this option. William Penn makes it easy to talk to an agent and get pricing details.
Contact NextGen Life Insurance Today
If you want to compare rates and plans from different companies, let us do the hard work for you. Call us to find out how we make buying life insurance easy. Don’t wait until it’s too late – let NextGen help you get the right coverage for you and your family.