Equitable Life Insurance: Is It Worth The Risk?

Equitable Life Insurance is one of the oldest life insurance companies in the world, with a long history of offering life insurance and reliably paying death benefits. The company has an excellent financial profile and fewer-than-expected customer complaints for its size. It also offers no-medical-exam policies and accepts digital wallet payments, such as Apple Pay. However, Equitable does not offer whole life insurance or online quotes, and its term life insurance rates are higher than some competitors. Overall, Equitable is a solid option for life insurance shoppers, but it may not be the right fit for those seeking whole life insurance or looking to purchase a policy quickly and easily online.

Equitable's financial stability and customer satisfaction

Equitable's Financial Stability

Equitable is one of the oldest life insurance companies in the world, with over 160 years of experience. The company has a long track record of offering life insurance and reliably paying death benefits. It has an excellent financial profile, with high marks from independent ratings agencies. Equitable Financial and Equitable Financial Life Insurance Company of America consistently earn top marks from these agencies. Insurance rating agency AM Best assigned the insurer an A (Excellent) rating for financial strength in 2022, indicating that Equitable has the financial resources necessary to meet its obligations to policyholders.

Customer Satisfaction

Equitable has received fewer-than-expected customer complaints for a company of its size. According to the National Association of Insurance Commissioners (NAIC), Equitable has an average complaint index of 0.10 over three years as of May 2023, indicating that there have been fewer customer complaints than expected for a company of its size.

However, J.D. Power ranked Equitable 17th out of 21 large insurers for overall customer satisfaction in 2021, and the company was not ranked in the 2022 study. Additionally, Equitable does not offer an online quote tool, which is becoming an industry standard, making it more difficult for customers to compare prices.

Equitable offers a wide range of term life options, but it does not offer permanent life insurance options with fixed rates or whole life insurance policies. Customers must also work with a financial professional to apply for any life insurance policy, even if they plan to buy it online. The Equitable website provides useful information about its life insurance policies but could improve the accessibility of its contact information.

Pros and cons of Equitable Life Insurance

Pros of Equitable Life Insurance:

Equitable has a long history of providing life insurance and reliably paying death benefits. Here are some advantages of choosing Equitable for life insurance:

• It offers a wide range of term life insurance options, including level term life, annual renewable term life, TermOne, and Term-in-10 policies.
• Equitable provides permanent life insurance options such as indexed universal life and variable universal life insurance.
• The company has an excellent financial profile and has received fewer customer complaints than expected for its size.
• Equitable offers no-medical-exam coverage, which is convenient for healthy applicants.
• Premiums can be paid using Apple Pay, catering to those who prefer digital wallets.
• Equitable has good term life insurance rates for older buyers.
• The company has highly reliable policy illustrations, providing peace of mind for senior buyers.
• Internal policy costs on cash value policies are generally low, allowing more money to go towards your cash value.

Cons of Equitable Life Insurance:

While Equitable has many positive attributes, there are also some drawbacks to consider:

• Equitable does not offer whole life insurance or regular universal life policies, limiting the types of policies available.
• The company does not provide an online quote tool, which is becoming an industry standard, making it less convenient to compare prices.
• Equitable's term life insurance rates are slightly higher compared to top competitors.
• The company's financial strength ratings have not always been as high as its top competitors.

Equitable's term life insurance options

All of Equitable's term life insurance policies offer level premiums for a specific time period of 1, 10, 15, or 20 years, or renewable premiums that increase annually. The death benefit provided is generally income-tax-free for the beneficiaries. Term life insurance from Equitable does not build up cash value but offers guaranteed protection at a low cost.

Term life insurance from Equitable can be a good option for those who need temporary coverage, such as protection for their family until major debts are paid off or for a specific period, like while children are still young or a business is growing. The proceeds from term life insurance can be used to pay off mortgages, fund a child's education, or transition a business.

Equitable's term life insurance policies can also be converted to permanent life insurance if needed. The company offers a conversion credit to reduce the initial cost of transitioning to a permanent policy, and clients won't have to answer additional health questions or undergo a medical exam.

Permanent life insurance options

Permanent life insurance is a type of insurance that covers you for your entire life, rather than for a fixed term. It is more expensive than term life insurance, but it also has a savings component that earns interest on a tax-deferred basis. This is called the cash value, and you can borrow against it or withdraw it while you are still alive. However, if you borrow from the cash value and don't pay it back, the insurer will usually reduce the death benefit by the same amount.

There are two primary types of permanent life insurance: whole life and universal life. Whole life insurance policies have fixed premiums and a cash value component that grows at a guaranteed rate. Universal life insurance, on the other hand, offers more flexible premium options, and its earnings are based on market interest rates.

Variable universal life insurance is a type of permanent life insurance that combines the features of variable and universal life policies. It offers the investment risks and rewards of variable life insurance, along with the ability to adjust premiums and death benefits that is characteristic of universal life insurance.

When considering permanent life insurance, it is important to remember that the premiums are much higher than those for term life insurance. Additionally, universal and variable policies require careful monitoring to ensure that the cash value performs well and the policy stays in force.

Additional coverage options

Equitable Life Insurance offers a range of additional coverage options in the form of riders. These riders can be added to certain policies to provide extra coverage or benefits. Here are some of the riders available:

• Option to Purchase Additional Insurance Rider: This rider allows policyholders to increase their coverage amount without providing proof of insurability, up to the age of 37.
• Charitable Legacy Rider: For policies with a minimum face amount of $1 million, this rider provides an additional benefit of up to 1% of the base policy amount to a qualified charitable organisation upon the policyholder's death.
• Child Term Insurance Rider: This rider provides term life insurance coverage for minor children, with a death benefit payable if a covered child dies before reaching a certain age. The coverage can be converted to a permanent policy when the child reaches adulthood.
• Disability Waiver of Monthly Deductions: This rider waives monthly deductions if the policyholder can prove disability for at least six continuous months.
• Early/Enhanced Cash Value Rider: This rider adjusts surrender charges to offer higher surrender values if the policy is surrendered within the first few years.
• Living Benefits Rider: This rider is an accelerated death benefit for terminal illnesses. It allows access to a portion of the death benefit if the policyholder is diagnosed with a terminal illness and has 12 months or less to live.
• Long-Term Care Services Rider: This rider provides a monthly benefit to assist with long-term care expenses if the policyholder has a chronic illness.
• Overloan Protection Rider: This rider helps prevent policy lapse if the policyholder borrows from their cash value and there isn't enough left to cover policy fees.
• Return of Premium Rider: If the policyholder outlives their term life insurance policy, this rider refunds a specified percentage of the premiums paid.
• Terminal Illness Accelerated Death Benefit Rider: This rider makes the death benefit accessible if the policyholder becomes terminally ill and has 24 months or less to live.
• Cash Value Plus Rider: This rider increases the available cash value on some permanent policies by reducing the surrender charge and may include partial refunds on other policy deductions.
• Children's Term Rider: This rider allows the addition of term life insurance coverage for underage dependents. Dependents can convert their policy to permanent life insurance once they reach adulthood.
• Disability Premium Waiver Rider: This rider provides an automatic waiver of life insurance premiums if the insured becomes fully disabled.
• Extended No-Lapse Guarantee: Ensures that the policy will not lapse throughout the lifetime of the insured.
• Return of Premium Death Benefit Rider: This rider provides an additional death benefit to the policy's beneficiaries, equal to a set percentage of the premiums paid.

Frequently asked questions