In our continuing series of reviewing life insurance companies that you’ll likely consider for final expense or burial coverage, we are pleased to discuss Prosperity Life Group and the subsidiary companies that offer their insurance products.
Although Prosperity Life Group is considered very young when compared to more established life insurers, they are a leading provider of life insurance products, retirement planning products, and Medicare Supplements.
Prosperity uses the following subsidiary companies to offer their products in certain niches throughout the country:
- SBLI USA Life Insurance Company
- USA Life Insurance Company
- Shenandoah Life Insurance Company
These insurance companies distribute their products using independent insurance agents, banks, and career and worksite channels.
We will always encourage our prospective clients to learn about an insurance company they are considering so the company will mean more to them than just an insurance payment. It’s important to know if your insurance company will be there when you and your surviving loved ones will need them most.
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About Prosperity Life Group
It’s important for consumers to know whether an insurer is financially stable before they purchase coverage and not at the time of a claim. Life insurance is simply a promise to pay a death benefit in exchange for a periodic premium and consumers should make certain that the insurer they choose can keep that promise.
A.M. Best, a leading national insurer rating service, has assigned an A- (Excellent) rating to the Prosperity Life Group. This rating means that Prosperity and their subsidiary companies will be able to pay their claims going forward.
The company is currently servicing over 300 thousand policyholders and has more than $15 billion of life insurance in force.
Prosperity Life Group Products
Although Prosperity Life offers a complete portfolio of life insurance products, annuities, Medicare Supplements, and various workplace products, in this article we will focus on the company’s final expense and burial insurance products.
Final expense insurance (also known as burial insurance and funeral insurance) is whole life insurance that is purchased to cover the final expenses that everyone leaves when they die. Typically final expenses are made up of funeral and burial expenses, unpaid medical bills, and nursing home costs that may not have been covered by Medicare or other health insurance.
The purpose of having final expense insurance is so you will not pass these costs on to your surviving loved ones when you eventually die. By using whole life insurance, you will have peace of mind knowing that your insurance policy will cover your final expenses and that you will have the same guarantees and benefits that traditional whole life insurance offers.
- Your Life Insurance is non-cancellable – As long as you pay your periodic premiums, your insurance company cannot cancel your policy for any reason. Even if you are diagnosed with a terminal illness or forced to live in a nursing home, your insurance policy will not be canceled.
- No Payment Surprises – Once your insurance policy is issued, your company cannot increase the periodic premium for any reason, Age, health issues, or diseases cannot increase your periodic premium.
- Asset Accumulation – Your final expense insurance policy will build an asset (cash value) over time. This cash value is your money that you can access for any reason via policy loans or withdrawals. In fact, you do not have to repay a loan if you choose not to. Any outstanding loan amount will be simply deducted from the death benefit when you die.
Prosperity Life Final Expense Whole Life Insurance
Understanding that seniors may have health issues to deal with, Prosperity offers three different final expense products to accommodate healthy applicants and those who have health issues. All of these plans are considered “simple issue” because no medical exams are required are policies are generally issue quickly.
Level Benefit Plan
The level benefit plan is the most affordable coverage because only applicants in good health will qualify for coverage. This plan has no waiting period and the full death benefit is payable from the first day of coverage.
Eligible issue ages are 50 to 80-years-old with coverage amounts of $1,500 to $35,000. The company offers four payment methods and an Accidental Death Benefit rider can be added to the policy at the time of application.
Graded Benefit Plan
The graded benefit plan was designed to accommodate applicants who do not medically qualify for the level benefit plan. This plan has a two year period when the death benefit is graded if death is a result of natural causes:
First Year Death Benefit – If the insured dies from natural causes in the first year of the policy, the insurance company will pay 30% of the full death benefit to the beneficiary listed on the policy. For example, if you have a $20,000 graded benefit plan and die in the first year of the policy, your beneficiary would receive $6,000 rather than the full death benefit of $20,000.
Second Year Death Benefit – If the insured dies from natural causes during the second year, the insurance company would pay 70% of the full death benefit to the beneficiary.
Third and Subsequent Years – Beginning the year of the policy and thereafter, the insurance company would pay the full death benefit to the beneficiary.
It’s important to note that death resulting from an accident is not subject to the waiting period and would pay the full death benefit from the first day of coverage.
Eligible issue ages for the graded benefit plan is 50 to 75-years-old with available face amounts of $1,500 to $35,000.
Modified Benefit Plan
The modified benefit plan was created for applicants who do not medically qualify for the level benefit or graded benefit plans. This plan is typically chosen by applicants who have severe or multiple medical conditions and it also has a two-year waiting period that effects death by natural causes.
First Year Death Benefit – If the insured dies during the first year from natural causes, the insurance company would pay 110% of the annual policy premium.
Second Year Death Benefit – If the insured dies from natural causes in the second year, the insurance company would pay the beneficiary 231% of the policy’s annual premium.
Third and Subsequent Years – If the insured dies during the third year or thereafter, the insurance company would pay the full death benefit to the beneficiary.
As with the graded benefit plan, if the insured dies because of an accident, the full death benefit is payable from the first day of coverage.
Eligible issue ages for the modified benefit plan is 50 to 80-years-old with face amounts of $1,500 to $35,000.
Here is a rate comparison of the level, graded, and modified benefit plans for $10,000 final expense insurance for a male non-smoker:
Age of Applicant Level Benefit Graded Benefit Modified Benefit
50 $34.52 $48.44 $77.10
55 $37.62 $61.61 $92.16
60 $45.77 $76.99 $113.96
65 $58.10 $95.63 $125.05
70 $79.58 $115.49 $154.07
75 $113.68 $165.55 $194.15
80 $147.96 $233.26 $294.99
We consider Prosperity Life Group an important tool for offering affordable final expense insurance. Since they offer three types of final expense plans, we have found that in most cases we can provide affordable final expense insurance for almost any applicant.
Doug Mitchell, President of Ogletree Financial, holds a BA degree in Finance from Auburn University as well as having obtained a Chartered Life Underwriter (CLU) designation from The American College in Bryn Mahr, PA. Doug has spent over 20 years in the life insurance industry and has also held licenses to sell securities, long-term care insurance, and home and auto insurance. For two years, Doug served as President of the Auburn Opelika Association of Financial Advisors and has been a member of the Million Dollar Round Table. He obtained Life Millionaire status at Horace Mann Insurance Company and was awarded the Life Agent of the Year Award. Later in his career with New York Life, he was an Executive Council Member. Doug currently serves as President of Ogletree Financial, a life insurance marketing organization with over 1000 life insurance agents. Today, Doug’s main focus is servicing 1000s of policyholders and growing his agency through the reach of several insurance-related websites.