Columbian Mutual Life Insurance Review [Recent Downgrade Included]

Columbian Mutual Life Insurance is one of the hundreds of life insurance companies operating in the United States. Sorting through all the companies can be difficult, but that is what we do. We review life insurance companies to take that work off your plate.

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When evaluating a life insurance company, you need to consider more than just rates. You want a company that is reliable and has a proven track record of making good on its promises. The company needs to be worthy of your trust.

The Columbian Mutual Life Insurance Company has been servicing its policyholders for over 135 years. In our Columbian Mutual Life Insurance Review, we will discuss all the pros and cons of using Columbian Mutual to protect your life.

Shall we begin?

Columbian Mutual Life Insurance Company History

The Columbian Financial Group includes the parent company, Columbian Mutual Life Insurance Company, along with Columbian Life Insurance Company has been established for over 137 years of service.

Columbian Mutual Life Insurance Company was founded in 1882 in Brooklyn, New York as the American Protective Association. In 1907, the name changed to the Columbian Protective Association, and the home office moved to Binghampton, New York.

In 1952, Columbian Protective Mutualized, which means the policyholders own the insurance company, not stockholder, and the company was subsequently renamed Columbian Mutual Life.

Columbian Mutual Life grew rapidly and between 1970 to 1990 expanded its services to all 50 United States! From 1990 to 1996 Columbian Mutual adds a wholly owned stock life insurance company when they acquired Washington National Life Insurance Company of New York.

From the mid-nineties and on, Columbian Mutual Life continues to expand through mergers and acquisitions. In 2007, Columbian Mutual celebrated its 125th year in business and doubled its size by merging with Farmers and Traders Life Insurance Company.

After the merger, the Combined organization had an excess of $1 billion and a strong surplus position that exceeded $70 million. Afterward, Columbia Mutual Life continued to acquire the Mutual of Detroit and merged with Unity Mutual Life Insurance Company.

The merger of Columbia Mutual Life and Unity Mutual Life created a combined organization of $1.4 billion in assets and over $100 million in capital and surplus. As of the writing of this article, the combined assets of Columbian Financial Group are in excess of $1.64 billion.

Columbian Mutual Life Ratings and Financial Strength

A.M. BestBBB
B++
A+

Columbian Mutual Life does not display any ratings from third-party rating agencies on its website from what we can see.  After doing some digging, we think we know why.

It seemed that in 2015, A.M. Best downgraded the ratings of the Columbian Financial Group to B++ (Good) from A-.  This downgrade would knock Columbian Mutual Life out of investment grade; although, they are knocking at the door. Still, a downgrade is a downgrade.

The reason for the downgrade was Columbian Financial Group’s declining level of capital and fluctuation operating performance that is inconsistent with a-rated peers. A.M. Best also noted that Columbian Financial Group has taken measures to mitigate the decline.

A.M. Best also stated that even though Columbian Financial Group’s capital has declined, the group still remains adequately capitalized for its current business and investment risks.

Columbian Mutual Life is not an accredited business of the Better Business Bureau (BBB).  However, they do have an open file with the BBB, and resolve any customer disputes promptly. The BBB gave Columbian Mutual Life a rating of A+.

Columbian Mutual Life Insurance Solutions

Columbian Mutual Life offers a wide selection of life insurance products for various needs and ages. Columbian Mutual Life is structured as a Mutual Company.

Mutual life insurance companies tend to focus on participating whole life products. Columbian Mutual Life also offers term, universal life, and final expense products.

Columbian Mutual Term Life Insurance

Columbian Mutual Life offers two term life insurance options. The first is a simplified issue term product that can be purchased without a medical exam. The second is traditional fully-underwritten term insurance.

TermLife Simplified Issue Term Features:

  • No medical exam
  • Living benefits rider for critical, chronic, and terminal illness
  • Plus option returns 50% of base premiums after the term

Columbian Mutual Life offers an express issue product. However, it did not make our list of best no exam life insurance companies. We were surprised that Columbia Mutual Life did not add a 10-year term option.

Additionally, the plus option is nice, but we are curious about why they only refund 50 percent of premiums paid. We feel if you are going to offer a return of premium option, you might as well go all the way.

You can also purchase your standard optional riders with the TermLife Simplified Issue Term. You can buy an accidental death rider, children’s term rider, and waiver of premium disability rider as optional add ons.

TermLife Optional Rider Features:

  • Accidental Death Rider - pays an additional death benefit if the cause of death is the result of an accident.
  • Children's Insurance Rider - provides level term insurance on all eligible children until the child’s age 25
  • Waiver of Premium (Disability Rider) - waives premiums for six months of total and continuous disability

Columbia Mutual Life also has a fully-underwritten option available in 10,15, or 20-year term periods, but we don’t like this product. The premiums are guaranteed to remain level for 10 years and expected to remain level after.

There are so many affordable term options available today that guarantee level premiums. Quite frankly, there is no reason to mess around with anything that does not. You do not want to be sick and have your life insurance premiums increase, and you cannot afford them.

Columbian Mutual Life Whole Life

Whole life is the bread and butter of mutual life insurance companies. Columbian Mutual Life has participating whole life policies as well as non-participating final expense policies for their policyholders.

A participating policy is eligible to receive a dividend from the companies profits. That dividend receives favorable tax treatment if it is reinvested in the policy as a paid-up addition. Paid-up additions increase the cash value and death benefits of the policy over time.

Whole life offers the most robust guarantees of any life insurance policy. You’ll get guaranteed cash value accumulation, your premiums are guaranteed to remain level for the rest of your life, and the death benefit is permanent.

You can remove money from the policy through tax-advantaged loans. The loan is secured by the death benefit. You do not have to pay it back, but if you do not, then it is subtracted from your death benefit when you die.

Columbian Mutual Life also offers various types of senior life insurance options. Columbian Mutual Life offers final expense, pre-need, and guaranteed issue whole life insurance to cover their policyholder’s final expense.

A final expense policy is a small whole life policy that usually has simplified underwriting and is not eligible for dividend payments. The death benefit proceeds can be used to pay your burial, funeral, and other remaining debts and obligations.

Pre-need is similar to final expense insurance but differs slightly. With a pre-need policy, the funeral parlor will guarantee the price of the goods and services they provide at the time of the contract. The insurance company pays the death benefits to the funeral parlor when you die.

If you cannot qualify medically for the pre-need or final expenses plan, Columbia Mutual Life has a guaranteed issue life insurance plan. This plan has no health questions. Anyone can purchase it.

Instead of medical underwriting, the guaranteed issue life insurance plan has a modified death benefit in the first 3 years of the policy. During the modified death benefit period, you receive a return of premiums plus 6 percent interest if you die of a medically-related death.

Accidental deaths pay the full death benefit in any year. After the third year, the full death benefit pays regardless of the cause of death.

Columbian Mutual Life Universal Life Insurance

Columbian Mutual Life offers a universal life insurance policy that provides flexibility with limited guarantees and a lifelong death benefit. Universal life has lower premiums compared to whole life but still can accumulate cash over the long-term.

Columbian allows you to select your premium during the policy. As long as they are within the legal limits of life insurance, you can pay more, pay less, or pay nothing at all. However, you need to fund the policy sufficiently if you want the coverage to last.

After the policy is issued, you can adjust the death benefit. You can increase or decrease the face amount as your needs change; although, proof of insurability may be requested on increases.

The money within the policy grows at a fixed interest rate. The policy will have a minimum interest rate guaranteed by the insurance company, but the actual rate is likely higher. Since the rate does change, it is wise to review the policy often to make sure it is funded adequately.

Your cash value grows tax-deferred. If you need the money in the policy, you can access it through tax-free withdrawals or loans. If you have a loan on the policy, your death benefit will be lowered as collateral.

Final Thoughts: Is Columbian Mutual Life Worth Consideration?

Columbian Mutual Life has been around for a long time. While a B rating from A.M. Best is not investment grade, there does not appear to be an immediate threat of Columbian Mutual Life defaulting on their policies.

That being said, with all of the great life insurance companies on the market today, there is no reason to take a chance. Columbian Mutual Life has some interesting products, but nothing that we have not seen before.

We suggest that you compare not only the rates of multiple life insurance companies but their financials, customer service, product features before making your final call. You can request a rate comparison through our site or give one of our agents a call today to assist you.

Thank you for reading our Columbian Mutual Life Insurance Review. If you have any questions, please contact us.

FILED UNDER – INSURANCE COMPANY REVIEWS

RESOURCES – BUSINESSWIRECOLUMBIAN MUTUAL

Joseph Cirillo of Good Life Protection

Joe is a lifelong learner with a passion for sharing what he has learned with others. Joe has publicly spoken on life insurance in the past to both colleagues at industry conferences and to consumers in educational settings and as a contributor to industry blogs.  Additionally, Joe is studying for certifications such as the CFP, CLU, and RICP to further his professional knowledge.