Liberty Mutual Life Insurance Review – Can they Compete?

When most people hear the name Liberty Mutual, life insurance is not always the first thing that comes to mind.  Liberty Mutal has grown quite the reputation nationwide as a leader in home and auto insurance, but are they the right life insurance company for you?

Liberty Mutual Life Insurance Review

We compare the rates of hundreds of life insurance companies looking for the best that industry has to offer.  If you are considering purchasing life insurance, do not make a final decision without reading our Liberty Mutual Life Insurance Review first.

Liberty Mutual Insurance History

Liberty Mutual was founded in 1912 as the Massachusetts Employees Insurance Association (MEIA), after the passage of a Massachusetts state law requiring employers to have workers’ compensation insurance in 1911. In 1917, the name was changed to the Liberty Mutual Insurance Company, and the company started offering automobile insurance.

In 1964, Liberty Mutual started offering life insurance through its Liberty Life Assurance Branch in addition to its property and casualty business. The company continued to grow into the 2000s.

In 2002, the company transformed into its current mutual structure, which means that the insurance company is owned by policyholders, not stockholders. This restructuring allowed the company to transform from a regional player to a top property and casualty insurer worldwide.

Liberty Mutual’s growth was both organic and through strategic additions. Liberty Mutual made a number of acquisitions recently including the Safeco Corporation in 2008. This acquisition accelerated the revenue growth of Liberty Mutual to over $30 billion!

Liberty Mutual Ratings and Financial Strength

Liberty Mutual life insurance business is part of the Liberty Mutual Insurance parent company. When evaluating a life insurance company, or any insurance company for that matter, you need to be confident that the insurance company has the financial means to make good on its promises.

Liberty Mutual has investment grade ratings from top rating agencies like the A.M. Best Company.  A.M. Best rates Liberty Mutual an A (Excellent) ratings. Additionally, Moody’s issued Liberty Mutual a rating of A2 and Standard and Poor’s issued a rating of A (Strong) indicating that Liberty Mutual has good financial health and a strong balance sheet.

A.M. BestMoody'sStandard & Poor's
A (Excellent)
A2 (Good)
A (Strong)

Liberty Mutual is also an accredited business of the Better Business Burea since 1931. That over 107 years!  Currently, Liberty Mutual is awarded an A- by the BBB, which is not the highest award of an A+ but still high on the scale of A+ to F.

Liberty Mutual Life Insurance Solutions

While Liberty Mutual is widely known for automobile insurance and other property and casualty lines, they do offer life insurance solutions to their clients. Liberty Mutual provides term life insurance options and permanent life insurance options like whole life to their clients.

Term life insurance is used for temporary needs.  For example, if you wanted to replace a portion or all of your income while you were working, term life insurance would be a cost-effective solution that allows you to get high death benefit amounts for affordable premiums.

If you were looking for a life insurance solution where the death benefit needed to payout, then whole life insurance would be more appropriate. Our agency uses whole life insurance to cover things like burial and final expenses and in legacy planning.

Liberty Mutual Term Life Insurance

Liberty Mutual term life insurance provides you with guaranteed death benefits and guaranteed level premiums for the length of term that you select.  You can select a term life insurance policy with a term period of 10, 15, 20, or 30 years.

With Liberty Mutual term life insurance you can continue the coverage at the end of your level-term period or use a built-in term conversion option to exchange the term life insurance policy with a whole life policy. The conversion option allows you to do the exchange without redoing underwriting no matter how much your health has changed.

You can add additional benefits in the form of riders to the life insurance policy. The disability waiver of premium rider waives your monthly premiums if you become disabled. You can also add on additional accidental death rider to your death benefits as well as a children’s term rider to cover your children.

Liberty Mutual term life insurance underwriting has both a fully-underwritten option and a no-exam express option. Fully-underwritten term life insurance requires that you take a medical examination and provide your doctor records to the life insurance company for them to verify your health.

Liberty Mutual’s simplified issue term life insurance option is much simpler. There are no invasive medical exams.  Instead, you answer some brief medical questions to see if you qualify. Additionally, Liberty Mutual will run a background check on things like your motor vehicle and prescription history to verify your eligibility. If all goes well, you can be approved within 10 minutes!

That being said, Liberty Mutual’s no-exam term life insurance did not make our list of best no-exam life insurance companies.  You can only apply for up to $250,000 of death benefits with Liberty Mutual without a medical exam, and their rates are not always the most competitive.  For example, Sagicor Life is crushing it right now with their chart-topping rates and non-medical underwriting.

You can find no-exam term life insurance with living benefits for chronic and critical illness included in the same ballpark price range, maybe even cheaper than Liberty Mutual. We would suggest looking at a company like Phoenix Life for a middle-market no-exam term life insurance solution with living benefits.

Liberty Mutual Whole Life Insurance

Liberty Mutual whole life insurance guarantees level premiums and death benefit for the rest of your life.  Unlike term life insurance that has no cash surrender value, whole life insurance accumulates cash value over time that grows tax-deferred. You can access this cash value while you are still alive in the form of tax-free loans, or you can cash in your whole life policy for its surrender value.

Liberty Mutual’s whole life insurance policy comes with the same optional riders as their term life insurance with a few additional add-ons that you can choose from like the guaranteed insurability option (GIO). The GIO rider allows you to purchase additional life insurance with no evidence of insurability in the future.  This is a great option to add on for either young children or young adults whose insurance needs can change considerably over time.

Liberty Mutual offers a number of different payment options ranging from lifetime payments to paying off the policy in one single payment.  Single premium whole life policies are rare and generally used for estate planning purposes where a certain amount of death benefit needed at the time of death.

Liberty Mutual Whole Life Payment Options:

  • Lifetime payments
  • 20-year paid-up option
  • Paid-up at age 65
  • Single-pay option

One of the negatives of Liberty Mutual’s whole life insurance policy is that it is not a participating policy. This means that the policy is not eligible to receive dividends.  Dividends are the secret sauce of whole life insurance because they can be reinvested into the policy as paid-up additions, which both increases the cash value accumulation and the death benefit of the policy.

If you are just looking for final expense insurance, then Liberty Mutal’s whole life insurance can be a convenient option since smaller death benefit amounts are issued with non-medical underwriting.  However, if you want a whole life insurance policy with a higher death benefit that accumulates cash value well, we would look at a company like Foresters Life that has a no-exam participating whole life policy.

Liberty Mutual Universal Life

Liberty Mutual in the past offered various types of universal life insurance policies.  However, of the writing of this Libert Mutual life insurance review, we cannot see any active universal life products displayed on the Liberty Mutual life insurance website.  However, this can change in the future.

Life insurance products, as well as life insurance companies, come and go. One of the drawbacks of using a company that does not specialize in life insurance as their core business is they may be more inclined to discontinue a life insurance product or life insurance altogether to focus on other more profitable business areas.

We will monitor the situation periodically. If Liberty Mutual updates their website or decides to reintroduce universal life insurance products, we will adjust this section of our review to reflect the new line of insurance.

Liberty Mutual Life Insurance Rates

Liberty Mutual life insurance is mostly sold by licensed Liberty Mutual agents. Liberty Mutual agents usually specialize in home, automobile, and other personal lines of property and casualty insurance.

If you are interested in a quote, you can visit the Liberty Mutual website.  The site has a quote engine that will refer you to a Liberty Mutual representative near you.  However, we always recommend comparing the rates of multiple companies before you decide to move forward.

You can request a quote on our site as well to compare the marketplace. We work with over 30 top-rated life insurance companies and specialize in field underwriting life insurance.  Every company has slightly different opinions on rates and underwriting requirements. We can help you determine what life insurance company will give you the best deal.

Final Thoughts: Is Liberty Mutual Life Insurance Legit?

Thank you for reading our Liberty Mutual life insurance review. Liberty Mutual is a quality insurance company that has been serving its policyholders for over 100 years!  They have a reputation as being a leader in property and casualty insurance, but the life insurance sector is an entirely different beast.

If you are just looking for a smaller death benefit policy and already have your auto/home insurance with Liberty Mutual, there is a particular convenience factor to applying for life with them as well.  Although, you may pay a premium rate for this convenience compared to other life insurance companies.

Liberty Mutual is a great company, but that does not mean they are great at all things. If you are looking for a life insurance policy with a higher death benefit or have a pre-existing medical condition, you want to work with a broker who can place you with the right company for your situation.

If you are looking for life insurance to protect your loved ones, request a quote today or give us a call. We have veteran life insurance agents that can provide you with a no obligation life insurance quote so you can compare your options before making a final decision.

FILED UNDER – LIFE INSURANCE COMPANY REVIEWS

Resources: Liberty 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.