Are you looking for a Nationwide life insurance review to help guide your decision on buying life insurance? This article offers a wealth of unbiased information on Nationwide life insurance from the independent agents at JRC Insurance Group.
Being an independent life insurance agency means that we can access rates, underwriting guidelines, and requirements from more than 40 top-rated insurance companies, including Nationwide. This allows us to see the benefits and drawbacks of every company’s life insurance offerings, and since we only sell life insurance, we are able to provide a high level of consultancy on the many different policies that are out there.
Read on for insider’s info on Nationwide life insurance.
Quick Article Guide:
1. A Solid Company Overall
2. Big Ad Spend
3. Higher Life Insurance Rates Than Other Companies
4. Nationwide Term Life Insurance
5. Nationwide Whole Life Insurance
6. Nationwide Universal Life Insurance
7. Nationwide Variable Life Insurance
8. Underwriting Strengths
9. Underwriting Weaknesses
10. Shop Nationwide and Beyond
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Nationwide doesn’t have the century-plus history that some of its competitors boast—but it comes close. The company was founded more than 90 years ago as Farm Bureau Mutual Insurance Company in Columbus, Ohio, where a law at the time required at least 100 people to pledge to become policyholders before the company was formed. The first agents with Farm Bureau Mutual were actually able to secure more than 1,000 pledges, and on April 12, 1926, the company officially opened its doors and began first selling auto insurance to Ohio farmers. Fire insurance followed as the second product offered and helped the company expand its reach outward to a dozen states and Washington, D.C.
In 1966, Farm Bureau Mutual changed its name to Nationwide Mutual Insurance Company (or as most customers today know it, simply, Nationwide). By 1965, Nationwide had a presence in 32 states from coast to coast. Today, Nationwide is a Fortune 500 company with more than 30,000 employees and an instantly recognizable brand name. The company remains loyal to its roots in Columbus, where it was instrumental in bringing the city its first professional sports team, the NHL’s Columbus Blue Jackets, by building Nationwide Arena adjacent to its offices at One Nationwide Plaza. The arena sparked tremendous growth in Downtown Columbus, creating what is now the thriving Arena District.
We provide this background info as a preface to our nitty-gritty life insurance review. Even when we discuss some of the drawbacks of Nationwide life insurance, we want to be clear that we have tremendous respect for the Nationwide brand and its place in the American insurance industry. Nationwide is rated A+ by A.M. Best, an indicator of the company’s financial strength and commitment to consumers, and has also become a mutually owned company (meaning its policyholders are shareholders in the company). From the Nationwide website:
“Our core values help us stay true to being More Than a Business:
- We value people
- We are member-focused
- We act with honesty and integrity
- We trust and respect each other”
We all see and hear countless insurance ads every day, Nationwide being among the most recognizable of them with the “On Your Side®” jingle. Insurance giants are constantly jockeying for brand recognition and market share in advertising. Nationwide is competing with the best of them thanks to the fifth largest ad spend among U.S. insurers. In 2015, Nationwide spent nearly $300 million on advertising, placing it among the likes of Geico, State Farm, Progressive, Liberty Mutual, and Allstate (which Nationwide surpassed in ad spend starting in 2014-2015).
The problem with a large ad spend like Nationwide’s is that it can trickle down to customers’ wallets. In 2015, Insurance Business Magazine published an article titled, “Auto insurers blasted for inflating rates with astronomic advertising budgets.” The article did not mention Nationwide specifically, but made some alarming points. J. Robert Hunter of the Consumer Federation of America told the magazine:
“It drives rates up since every penny of the ads is built into the rates. Also, lobbying expenses and other such anti-consumer expenses are in the rates in all states except California.”
The article continues:
“It’s hard to argue that advertisements don’t take up a significant portion of a carrier’s revenue. According to 2013 SNL Financial report, GEICO spends about $6 of every $100 it collects in premiums on advertising, totaling $1.2 billion annually. Allstate increased its budget last year by 5.7% to reach $900 million, and State Farm pushed its spending up 5.1% to $800 million.”
To reiterate, we cannot confirm a correlation between Nationwide’s ad spend and insurance rates. However, just as with any business, it is reasonable to assume that higher costs for the company might trigger higher costs for customers.
While we can’t say outright that Nationwide’s ad spend affects customers, we can confirm that Nationwide’s life insurance rates are notably higher than many other companies. To support this statement, we ran quotes for different ages between 30 and 65 with varying degrees of health, and found that Nationwide’s rates are typically 30 to 35 percent more expensive than its A+ Rated counterparts.
The reason might be that Nationwide primarily sells home and auto insurance, among many other insurance products. Life insurance falls into that second tier of sales priorities, where you’ll also find everything from boat insurance to pet insurance. Since Nationwide does not necessarily specialize in life insurance, the company likely is not concerned about undercutting more life insurance-focused competitors such as Banner and Prudential.
Nationwide offers several different term life insurance policies. Term life is the most affordable life insurance available and ensures a death benefit (money paid to your spouse or heirs to cover income loss and assets in the event of your death) at a fixed premium, for a set period of time (your term). Most of Nationwide’s term policies are convertible to permanent life insurance.
For additional information on term life insurance, click here.
Whole life insurance is permanent, meaning it lasts your entire lifetime. Whole life policies usually come with a “cash value” component that acts as an investment attached to your life insurance policy. Nationwide’s flagship whole life insurance product is called “YourLife®.” Their website lists the benefits of YourLife® to be:
- “Permanent protection
- Predictable, fixed premiums
- The ability to customize policy with riders for an additional charge
- A guaranteed cash value and death benefits
- Access to your money through loans (for an additional charge, certain restrictions apply)
- Income tax-free death proceeds”
Because of the lifetime protection and fixed premium, whole life insurance such as YourLife® is usually much more expensive than a term life policy.
Nationwide also offers various types of universal life insurance. Universal life offers lifetime protection with greater flexibility than whole life insurance but can also be very complicated and even risky. Nationwide’s YourLife® line includes several different types of universal life, including:
- Nationwide YourLife® Indexed UL Accumulator
- Nationwide YourLife® Indexed UL Protector
- Nationwide YourLife® Indexed UL
- Nationwide YourLife® SUL II
- Nationwide YourLife® Current Assumption UL
- Nationwide YourLife® No-Lapse Guarantee UL
Even if you’re buying from a great company like Nationwide, we recommend reading this article before you commit to a cash value life insurance policy. Many people who buy these policies don’t fully understand how they work in terms of the cash value.
Variable life insurance is a type of universal life insurance that has the potential to fetch greater returns on your investment but with a higher risk involved. Investopedia explains:
“The premium amount for variable universal life insurance is flexible and may be changed by the consumer as needed, though these changes can result in a change in the coverage amount. The investment feature usually includes sub-accounts, which function very similar to mutual funds and can provide exposure to stocks and bonds. This exposure offers the possibility of an increased rate of return over a normal universal life or permanent insurance policy.”
Unfortunately, most of these policies across the board tend to underperform. Nationwide even addresses this risk directly on its variable universal web page, stating:
“However, a variable universal life policy puts greater responsibility on you. You assume the investment risk, and you select and monitor your own underlying investment options, instead of the insurance company doing it for you…
… Also, make sure you are able to continue premium payments so your policy doesn’t lapse if the market goes down. If you take a loan, withdrawal or partial or whole surrender, your death benefit may be reduced, your policy may lapse or you may face tax consequences…”
For an accurate rate based on your age, gender, and health profile, please feel free to call us directly at 855-247-9555. You can also request a free instant online quote here.
Nationwide does have some clear strong suits in life insurance, namely:
- Lenient build charts (used to assess your health and determine your rate class, which impacts how much you pay for coverage).
- Lenient with applicants who have high cholesterol. (Most companies want to see your cholesterol under 180. Nationwide will accept up to 230 for Preferred Best rates.)
- Lenient with family medical history (with the exception of early cardiac death).
Every insurance company has its strengths and weaknesses. While lenient with build charts, cholesterol, and family history, Nationwide has some clear drawbacks to its life insurance products, including:
- High rates (30-35 percent more than other carriers).
- No Standard Plus rate class (meaning if you’re moderately healthy with a mild health issue such as being overweight or having diabetes, you will still pay the rates of someone who has a much more serious health issue).
- No Preferred Best rates for anyone on blood pressure medication.
- Higher-than-average emphasis on driving record (one ticket in two years can hurt your rate class).
Now that you’ve done your homework on Nationwide, it’s time to get a quote. In the same time that a Nationwide agent will give you a handful of Nationwide life insurance quotes, JRC can source dozens of quotes from 40+ top rated insurers including Nationwide. And, our services are completely free of charge to you, with no obligations.
We’re here to help you find affordable, reliable life insurance protection for your family, whether through Nationwide or another carrier. Click the button below to receive an instant quote list, or call us toll-free at 855-247-9555 to speak with one of our agents.
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