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At its core, purchasing life insurance is an investment in an uncertain future. The diverse range of life insurance policies helps buyers prepare for an unexpected death, accident, illness, and sometimes retirement. The Wisconsin-based American Family Insurance boasts award-winning insurance coupled with best-in-class customer service. It's a powerful punch designed to help individuals across the country protect what might be their most valuable asset: future dreams for those they love.
While many people think of life insurance as a death benefit, life insurance loans, accelerated death benefits, and other options are available. For example, American Family offers life insurance primarily to care for beneficiaries after the policyholder's death, but some plans also include accelerated death benefits. Finding the right policy can help you achieve your goals.
The company, founded in 1927, has proudly served 12 million customers (and counting!) in the ensuing nine decades. It's currently listed among Forbes' best insurance firms.
Types of Life Insurance Plans from American Family Insurance
Life insurance is a savvy way to financially (and proactively) protect the people you love in the event of your death. Consider these DreamSecure options when shopping for a policy with American Family:
Term Life Insurance: A term life policy delivers coverage for a specific time. Coverage remains in effect for the contracted term (10, 15, 20, or 30 years). If the policy is active at the time of the insured's death, a benefit will be paid. While qualified applicants may renew the policy at the end of the term, renewal premiums will be higher than the term policy's scheduled payments. Any conversion to a whole life insurance product goes through the same application as a new life insurance policy. Qualified applicants can apply for a no medical exam life insurance policy. But the death benefit could change, and acceptance is not guaranteed. A term life policy carries no cash value.
Simplified Term Life Insurance: Enjoy quick and easy application (no medical exam life insurance) and approval (subject to health history) with this no-nonsense option. Applicants can protect the financial future of loved ones with minimal hassle. Since life insurance policies are based on age and health, the earlier you act, the better. This option comes with customizable coverage ranging from $50,000 to $150,000, available over standard terms of 10, 15, 20, or 30 years. In addition, each premium is guaranteed to remain unchanged for the whole period, after which the policy expires if it is not converted to a whole life insurance policy (commonly referred to as permanent life insurance).
Whole Life Insurance: A whole life policy delivers life insurance coverage for an individual's entire life. This means a death benefit is promised to the beneficiary. Additionally, this policy accumulates cash value, meaning policyholders can use it for current financial needs. For example, money can be borrowed as a loan when purchasing a home or facing college tuition. Whole life policy premiums with American Family remain constant over the policy's life, regardless of age or health changes.
Child Whole Life Insurance: Parents can purchase additional coverage at specific milestones without a medical exam or further health questions. A trio of coverage options ($25,000, $50,000, and $75,000) coupled with two payment options (10- and 20-year plans) means coverage continues through significant life events, including marriage and homeownership long after the final monthly premium is paid.
Senior Whole Life Insurance: This simple, affordable policy is designed for adults between 50 and 80. While no medical exam is required, policy issuance is based on answers to health-related questions. Plus, coverage comes in small amounts. Policies are available with only $10,000 or $50,000 in death benefits. The limited payout makes it a good fit for final medical and funeral expenses after your death. Keep in mind American Family can also reference medical records.
Flexible Life Insurance: This long-term, flexible coverage is designed to evolve on par with your life. Both premiums and coverage are adjustable to meet changing needs, across various life stages, with a single life insurance policy. Living benefits are another attractive feature only available with American Family's flexible life insurance plans. Unlike traditional death benefits, living benefits allow the buyer to pull money out to pay medical bills and living expenses in the event of a severe illness or accident. Of course, this reduces your death benefit later on.
Additional Coverage Options
Some American Family life insurance plans offer additional insurance riders to meet your unique needs:
- Premium waiver for disability benefit rider: This add-on eliminates premiums if the insured experiences an accident or life event rendering them disabled. In other words, you keep your benefit without future payments.
- Accelerated death benefit/living benefits: This add-on allows a policy owner to receive partial death benefits if the policyholder is diagnosed with a terminal illness. This rider was referenced above as "living benefits" available with the flexible life insurance plan.
- Guaranteed purchase: This option allows customers to purchase additional whole life coverage without answering further medical questions or scheduling a physical exam. Increased benefits are only available at certain preset milestones.
- Children's insurance rider: This option offers coverage of $15,000 for biological, adopted, and step-children.
The type and amount of coverage you need are unique to your family's circumstances. A licensed life insurance agent is always the best resource for purchasing an appropriate life insurance plan. But the following equation can give you a basic idea of the minimum death benefit you might want to buy:
Expenses (inclusive of current/future debts, childcare expenses, education, and income replacement)-assets (spouse's income, investments, and any existing life insurance policy) = estimated life insurance needs
How Much Does American Family Insurance Life Insurance Cost?
Generally, term coverage is less expensive than permanent (whole life policy) coverage. The main caveat is the latter comes with a guaranteed benefit/payout while the former does not. In addition, a term policy expires at a specific time, meaning you're betting you'll die before that point or be healthy and financially stable enough to convert your policy to a whole life insurance policy. But, of course, your insurer is betting neither of those situations will apply. Remember, because you'd be applying at a later age with more health conditions, premiums will likely rise if you convert your term policy to a whole life policy.
That said, the cost of whole life insurance may be less expensive than you think if you buy early. Age, gender, health, and coverage amount are the main factors determining premium costs. So the younger and healthier you are, the lower your policy premium will be. In addition, when accounting for fixed premiums when you buy early instead of converting your term life insurance later, you could save money in the long run.
American Family offers a life insurance calculator to determine coverage needs and estimate costs.
How to File a Claim
The easiest way to file a claim with American Family Insurance is to contact your agent or call 1-800-MYAMFAM (1-800-692-6326), ext. 78080.
Because the process of starting a death benefits claim begins with the insured person (and not the beneficiary), have the following information available:
- Their first and last name
- Their date of birth
- Their state of residence
- Their state of death
The following list of additional information may expedite the processing of your death benefit claim:
- Policy number
- Date and cause of death
- Contact details for each beneficiary
- Date of birth for each beneficiary
- Relationship of each beneficiary to the policyholder
Ultimately, you will be required to provide a copy of the death certificate and contact information for the funeral home handling arrangements. American Family agents can advise on the information required if you need to file a claim for accelerated death benefits.
American Family Insurance Life Insurance FAQs
People responsible for their loved ones' financial well-being will benefit from life insurance. This includes primary wage earners, homeowners with mortgages, and parents with children. It also includes non-wage earners who reduce household costs. For example, a stay-at-home parent may clean, provide child care, and other services that would otherwise raise the family's monthly expenses.
A beneficiary is an individual or organization receiving the proceeds of a life insurance policy when the insured person dies. Some companies allow a buyer to elect multiple beneficiaries.
Also known as accelerated death benefits, living benefits allow buyers to pull money out early. Early withdrawals depend on the life insurance holder suffering a severe illness or injury that prevents them from working. Policyholders can use it to pay medical bills or living expenses during that time.
Since the cost of life insurance largely depends on one's age and health, purchasing a life insurance policy for a child comes with benefits, the biggest of which is locking in at a low rate for the policy's life. Some policies for children are term policies that cannot be renewed as adults. So keep this in mind when setting your premium.
Seeing the limits on American Family life insurance policies, you might buy multiple life policies. Insider recommends getting quotes from at least three companies if you are not satisfied with the benefits any life insurance company provides. Whether you buy one or multiple life insurance policies, combined coverage is limited based on the age at which you purchase the policies. Adults 40 and younger can qualify for as much as 25-35 times their annual income. Adults between 60 and 70 could only purchase policies covering five times their yearly income.
Methodology: How We Reviewed American Family Insurance
We compare life insurance companies based on product quality, insurance riders available, net performance scores, pricing, and customer service. In addition, we look at the diverse range of life insurance products to compare death benefit plans with life insurance designed for long-term financial planning. Our opinions are wholly based on facts gathered.
Disclaimer: The information provided here is intended for review purposes only. Utilizing a licensed insurance agent to shop for life insurance is the best way to ensure you'll get the right policy, one inclusive of appropriate coverage (at a competitive price) that best meets the needs of you and your loved ones. Once an individual is denied a life insurance policy with any company, this information is reported within a more extensive network. Any denial exponentially increases the likelihood that future applications will be denied. A licensed insurance agent can help you prepare your application and review your options to apply for plans that make sense for you and the insurance company.
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Mutual of Omaha Life Insurance
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State Farm Life Insurance
Compare American Family Insurance vs. Mutual of Omaha
Mutual of Omaha Life Insurance offers guaranteed coverage without medical exams or health-related questions. This risk is offset by lower maximum coverage amounts across the board. In addition, the Nebraska-based Fortune 500 Company offers universal life and indexed universal life policies. These permanent insurance options may include accelerated death benefits to pay out after an illness or severe accident. Its universal life policies also build cash value via non-equity earned rates in the case of the former allowing for cash value growth through an equity index account.
As an industry giant, Mutual of Omaha offers more diverse life insurance plans than American Family, especially if your goal is your financial planning. Some of its underwriting guidelines may also be stricter. So while payouts would be smaller, more applicants may be eligible for American Family life insurance than with Mutual of Omaha. Buyers looking for life insurance plans to accomplish their retirement and investment goals will find better options with Mutual of Omaha.
Compare American Family Insurance vs. State Farm
According to J.D Power's yearly life insurance survey, State Farm consistently ranks first in customer satisfaction. In addition, State Farm's term life insurance offers high payouts with low premiums for qualifying applicants. Applicants with existing State Farm home, auto, or other insurance policies may also enjoy multi-policy discounts.
Its whole life policies come with living benefits for accidents or serious illnesses. A key thing to remember with State Farm is living benefits payments are restricted to four withdrawals ($500 minimum each) per year. American Family's guidelines for policies with living benefits can be more flexible. Both companies sell their policies through captive insurance agents who can advise on the benefits of individual life insurance policies. In other words, State Farm agents only sell State Farm insurance products. As such, if you want to compare life insurance policies from other companies, agents would have to contact a different insurance agent. Both companies offer good death benefits, but neither company provides competitive life insurance plans for financial planning.
Who Are The Ideal Customers for American Family Insurance?
The broad range of policy options at American Family runs the gamut from term to whole and simplified to flexible. These options make the company accessible to a diverse range of people as long as you're in relatively good health and a US citizen. Unfortunately, American Family does not offer life insurance for foreign nationals.
Like other major life insurance companies, American Family Insurance has an age cutoff that varies between policy types. At a certain point, term policies cannot be renewed or converted to whole life policies. So while it offers small senior plans, options become limited and disappear when you wait too long to apply. In addition, riders like American Family's accelerated death benefits are unavailable on some plans.
What Does "No Medical Exam" Mean with American Family Insurance?
Some life insurance policies require a physical exam. American Family determines eligibility for DreamSecure Simplified Term Life Insurance via a short health survey. According to company underwriting guidelines, children ages 0-17 do not require a medical exam for term life, whole life, or DreamSecure Flexible Life insurance policies. However, applicants will need to answer health-related questions to determine eligibility. As such, being transparent about preexisting conditions is essential. Given the company's access to basic health records, dishonesty can lead to a policy being canceled or death benefits being withheld. These two rules apply to life insurance policies in general.
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Read our editorial standards.
Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.
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