Liberty Mutual Life Insurance Review - Ratings and Coverage Options
As an independent life insurance agency, JRC Insurance Group works directly with more than 50 top-rated insurance companies, and we have access to dozens more.
Since we are not “captive agents” working directly for Liberty Mutual, we are able to compare their life insurance products to all of the other companies out there—and that’s exactly what we’re going to do here in this article. Read on for tips and tidbits to keep in mind when considering Liberty Mutual’s life insurance products.
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Liberty Mutual was founded in 1912 as the Massachusetts Employees Insurance Association (MEIA) to meet the State of Massachusetts’ then-newly enacted law requiring employers to provide workers’ compensation insurance.
After selling its first automobile policy in 1914 and changing its name to Liberty Mutual Insurance Company in 1917, the company quickly became a prolific automobile insurer across the United States.
It wasn’t until 1964 that Liberty Mutual began offering life insurance under a separate branch that is now the Liberty Assurance Company of Boston, or Liberty Life, which offers term life insurance, whole life insurance, and universal life insurance.
Over the years, Liberty Mutual has grown to become a Fortune 100 U.S. company employing more than 45,000 people across 900 global offices while maintaining its status as a mutual company (meaning its policyholders are shareholders). From their website:
“Since 1912, we at Liberty Mutual Insurance have committed ourselves to providing broad, useful and competitively-priced insurance products and services to meet our customers' ever-changing needs.We provide historical context to illustrate how influential Liberty Mutual has been in the American insurance industry over the past century. Any negative aspects of their life insurance products divulged in this article are meant not to question Liberty Mutual’s proud brand, but simply to help consumers make informed decisions involving life insurance.
Our delivery on this commitment is the reason we’re now the third largest property and casualty insurer in the U.S. based on 2012 direct premium written according to the National Association of Insurance Commissioners.”
As a provider of many different types of insurance, Liberty Mutual is an A rated insurer by both A.M. Best and Standard and Poor’s ratings, the two main rating agencies for insurance in the U.S.
These are solid ratings, but not the best, as Consumers Advocate notes that Liberty Mutual “suffers from less than average financial ratings compared to the other leading life insurance services reviewed.”
We see on Liberty Mutual’s website that they are the third largest property and casualty insurer in the U.S. And on their Wikipedia page, you’ll find that life insurance is not even listed among the core services, which include everything from auto and home insurance to workers’ compensation, general liability, and about a half dozen other products.
Liberty Mutual is indeed a top insurance company, but like many big-box insurers, they do not specialize in life insurance. This is why we always recommend working with an independent life insurance agency like JRC when shopping for life insurance—we know which companies offer the best life insurance products and can compare them against each other to find the best rates.
If you are looking for life insurance only with Liberty Mutual, you are missing the majority of the market, including some very solid companies that are smaller by name but offer the same products with more leniency on health issues and more favorable rates.
One of the interesting things about Liberty Mutual is that they strongly push their simplified issue life insurance policies, which do not require a medical exam and instead only ask that you answer a few brief questions about your medical history.
Liberty Mutual’s simplified issue policies offer up to $250k in coverage, which is not a huge amount when you consider the cost of funeral and burial expenses plus financial support for your family in the months and years after you pass away.
If you are looking to buy more than $250,000 of term insurance with Liberty Mutual, they will recommend that you buy a simplified issue term policy plus an additional fully-underwritten term life insurance policy. In this case, you would be paying two premiums instead of one, neither convenient nor cost-effective.
Oftentimes, a Liberty Mutual insurance agent won’t even ask you standard qualifying questions that most companies use to streamline the application process. Not taking a medical exam for life insurance might sound nice, but if you truly want the best policy and rate, we highly recommend taking the medical exam.
Perhaps the most notable drawback in Liberty Mutual life insurance is in some cases, their rates were more than double other insurance companies’ rates for applicants in less than perfect health.
To confirm this fact, we actually called them and asked for a quote for a relatively healthy 43-year-old male seeking a 20-year term policy with a $500k death benefit. The quote was $108.00 per month. Meanwhile, many other companies like Prudential (A+ rated) offer the exact same policy for the exact same applicant at around $50 per month.
Put Simply, Liberty Mutual life insurance is expensive even for healthy applicants. Seniors, or those with health issues, will have an especially difficult time finding an affordable policy with Liberty Mutual. We will also note that Liberty Mutual does not offer a 25-year term policy—only 10, 15, and 20 years—nor do they offer term policies to applicants past the age of 70.
Larger insurers like Liberty Mutual offer the advantage of a “one-stop shop” for all of your insurance needs and encourage consumers to “bundling” their home, auto, and life insurance. However, most of the time, the life insurance product is the weak link in the bundle.
Remember, companies like Liberty Mutual, State Farm and the like are mostly focused on providing home and auto insurance. For them, life insurance is an add-on and not an area of complete expertise.
Additionally, there is technically no such thing as “discounted” life insurance. Rates for life insurance are standardized and regulated at the state level. Each state’s insurance commissioner is responsible for ensuring that all providers are charging the same rates, with no preferential treatment.
When a company advertises life insurance at a seemingly unbeatable price as part of a bundle deal, what they’re really doing is applying a discount on auto or home insurance to compensate for what is traditionally the weak link in their repertoire. We take a closer look at this common big-box marketing strategy here.
Big Advertising Spend and Public Controversy
Liberty Mutual is one of the most recognized names in the insurance industry thanks to their advertising spend. In 2020, the company spent roughly $435 millions dollars on advertising while collecting $39.5 billion in premiums. This means that for every $100 Liberty Mutual collected in premiums, more than $11 was spent on advertising.
According to J. Hunter Robert of the Consumer Federation of America, these advertising expenses ultimately fall to the consumer. "It drives rates up since every penny of the ads is built into the rates."
Liberty Mutual has also been the subject of controversy for their ties to the fossil fuel industry. As Elana Sulakshana from Run.org states, "... the insurance giant is a top fossil fuel insurer, backing tar sands pipelines, coal mines, and oil and fracked gas extraction that is polluting communities and fueling climate destruction globally."
Liberty Mutual’s strongest life insurance offering is its accelerated death benefit rider. In our guide to life insurance riders, we explain an accelerated death benefit rider as follows:
“An ADB rider allows you to access the death benefit in your life insurance policy before you die if you are diagnosed with a terminal illness and become unable to perform to six activities of daily living (ADLs), which are:
However, it's also important to note that any money you receive from your policy while you are alive will be subtracted from your policy’s final death benefit when you pass way. In other words, if you access 90% of your policy’s death benefit, your beneficiary will receive the remaining 10% after you die.
Below we’ve provided some sample rates for applicants that meet Liberty Mutual’s guidelines for being in “excellent” health. It’s important to note that Liberty Mutual’s health guidelines are more conservative than most companies that specialize primarily with life insurance.
As an example, to qualify for Liberty Mutual’s “excellent” health class, your total cholesterol must be 210 or less. On the other hand, many top-rated life insurers including; Mutual of Omaha, Lincoln Financial, and Prudential offer their top rate class to healthy applicants with a total cholesterol of 275 or less.
Highly-rated life insurance providers like these also tend to have more lenient guidelines for weight, blood pressure, medications, cholesterol, family health history, driving history, tobacco use, etc.
When shopping for Liberty Mutual life insurance, you will be able to receive an online quote after answering a few questions online, or you can call and speak with a local agent. Unfortunately, Liberty Mutual does not offer comparison shopping, so you will only be able to receive rates from their company when calling or shopping online.
Rather than calling multiple companies to compare rates and options, you are better off calling JRC and allowing one of our life insurance agents to be your personal life insurance consultant and shopper. We can compare rates from Liberty Mutual against more than 50 other top-rated insurers so that you can decide whether they are right for you.Again, we are not bashing Liberty Mutual in any way. However, for the overwhelming majority of the clients we work with, there are more cost-effective options available. If you're considering Liberty Mutual for your life insurance needs, why not compare your options to make sure your getting the best value?
Our shopping services are completely free to you, and all of our agents offer multiple years of experience. Click the button below to get an instant quote, or call us toll-free at 855-247-9555 to speak with one of our agents to get an accurate quote based on your health profile.
Managing Partner and Co-founder
Cliff is a licensed life insurance agent and one of the owners of JRC Insurance Group. He has helped thousands of families of businesses with their life insurance needs since 2012 and specializes with applicants who are less than perfect health. In his spare time he enjoys spending time with family, traveling, and the great outdoors.