Allstate Life Insurance Company Review 2018

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Are you asking yourself if you should buy life insurance from Allstate? After all, you have your car and homeowner insurance with them, and you trust your agent, so why not? In this Allstate Life Insurance review, I’ll attempt to answer just that. Throughout the years, we can confidently say that the majority of life insurance policies sold to individuals are the wrong type of plans.

They might have too much or too little in death benefit, but mostly, people are just paying too much because they don’t shop around, or they’ll buy their life policy from companies who specialize in car and homeowner insurance like State Farm or Farmers. If you want to get the best possible rate for life insurance, read on. I will compare Allstate against the best in our industry to see how they stand up in terms of prices, underwriting, and product types.

Related: Why it isn’t a good idea to buy life insurance from Costco?

Disclaimer: I am not an Allstate agent. I am a licensed broker who gives his personal opinion about their life insurance products and services.

Allstate History

Allstate was founded in 1931 by Robert E. Wood, the president and board Chairman of Sears. He had this great idea of selling personal lines insurance by mail. Allstate is based in Northbrook Illinois and is the nation’s largest publicly held personal lines insurer. Their goal has always been to help consumers prepare for tomorrow and protect what’s most important to them.

Allstate Financial Ratings

According to A.M. Best, Allstate has a rating of A+ (Superior). Financial rating only indicates if a company can pay its claims and does not reflect anything that has to do with the quality of products or services they offer. Nonetheless, having a high financial rating is a good start.

Life Insurance Products Offered by Allstate

Allstate offers two basic life insurance products from which to choose: Term and Permanent coverages. Let’s review each one.

Allstate’s Term Life Insurance

Term life insurance is the most straightforward and economical coverage you can find. You buy protection for a specific length of time, and the premium and the death benefit are guaranteed to stay level for the length of the term.

At the end of the term period, you may convert the policy to whole life without evidence of insurability, renew it on an annual basis, or drop it. Allstate’s term life insurance comes in two flavors: Basic Term and TrueFit. Let’s take a look at the benefits of each one.

Basic Term Life Insurance

  • Death benefit amounts are $50,000, $100,000, or $150,000
  • Term contract is for 15 years
  • It doesn’t require an exam as part of the underwriting process, but your final rate is dependent on your answers to the health-related questions on the application

TrueFit Term Life Insurance

This is a term life coverage for individuals who are seeking a higher level of customization. Since most term life insurance is available in 5- or 10-year increments, TrueFit uses 1-year increases to fit your specific scenario in life. Hence, if you have 16 years left on your mortgage, you can buy a 16-year term instead of 20-year.

You can also personalize your protection through a ladder strategy called “layer coverage”. This concept isn’t new. In essence, the younger you are, the more coverage you need (due to obligations such as mortgage, family, school loans, etc.), and as you get older, the less you need (the kids are grown up and out of the house, the mortgage is paid off).

So, instead of buying one large policy and being stuck with the payments for 30 years, you could buy smaller policies based on your life events and their time frames. For instance, you can buy $250,000 for 15 years to cover your mortgage and another $500,000 for ten years as an income replacement. Once the 10-year mark has passed, the policy drops and so does your premium. Allstate allows up to five layers of coverages.

  • Term contract from 10–30 years
  • Minimum death benefit
    • Ages 18–45: $200,000
    • Ages 46+: $50,000

Related: Sample term life insurance rates

Optional Riders

Life insurance riders are add-ons to your coverage to personalize it even more. Allstate offers the following riders at an additional cost:

  • Living benefit: If diagnosed with a terminal illness, you can access some of your death benefit while you are still alive.
  • Additional insured term insurance: Can get additional coverage for one of your family members such as a spouse or domestic partner.
  • Accidental death benefit: This rider pays an additional benefit if you die as a result of an accident.
  • Children’s level term: You can buy a term policy for your child if he or she is under 18.
  • Waiver of premium: Your monthly premium to keep the policy current will be waived should you become disabled and can’t pay for it.
  • Primary insured term insurance: You can add up to five additional term layers.

Allstate’s Permanent Life Insurance

As the name implies, permanent life insurance lasts for your entire life. The premium and the death benefit stay the same. The policy also contains a cash value component which grows every year. This can be used through a loan or when you surrender the policy (once you cancel the coverage, you are entitled to the cash value). Allstate offers three types of permanent plans: whole life, universal life, and variable universal life.

Whole Life Insurance

  • Coverage lasts for entire life
  • Cash value is guaranteed to increase regardless of market conditions
  • Death benefit and premium remains level throughout the policy

Universal Life Insurance

Universal life is another form of whole life policy with an added feature called flexibility. Unlike whole life where the premium and death benefit are set in stone, with Universal Life, you can change the premium payment amount or the death benefit later on in life if your circumstances change. The cash value accumulation is tax-deferred and may be different every year depending on the interest rate, but it will never be lower than the guaranteed rate per year.

Variable Universal Life Insurance

Variable Universal Life offers the same permanent protection should you die prematurely and has the same flexibility and choices as Universal Life. However, the cash value in the account is prone to market risks and movements. The cash value in your account is invested in separate accounts like mutual funds, options, and such. The risk is high but so is the reward.

Allstate Life Insurance Pros

 pros
  • We can’t ignore the fact that Allstate is a large and trusted company with an outstanding financial rating. If you bought life insurance and passed away, they will pay the benefit to your heirs.
  • It’s a one-stop shop for all your insurance needs. There is a familiarity aspect of doing all your insurance with one agent. Many times, you may know the agent personally, so there is the trust factor. Buying insurance is so complicated, you prefer to look to someone you trust to recommend the best life insurance for you.

Allstate Life Insurance Cons

 cons
  • They are too expensive. There, I said it. Allstate can’t compete with companies like Protective, AIG, or SBLI. They traditionally sell auto and homeowner insurance, and life insurance is just not their specialty.
  • I hate to break this to you, but your trusted Allstate agent is captive, which means he/she can only offer you one company. If you are not in the best of health, you will pay even more or get declined altogether. Even if you trust him, he can’t help but sell you only one company. A broker, on the other hand, represents many insurers from which to choose and his job is to place you with the right carrier for your unique health condition.
  • If you are looking for a no-exam life insurance and need more than $150,000 in death benefit, you will have to look somewhere else. The maximum Allstate offers is $150,000.

Allstate vs. Other Carriers’ Sample Monthly Rates

allstate life insurance sample rates

Male 20-year Term $250,000

CompanyAge 30Age 40Age 50Age 60
 Protective $13.12 $17.85 $41.50 $111.59
 Banner $13.33 $19.26 $40.85 $111.13
 AIG $13.54 $19.38 $42.73 $114.74
 Foresters $13.56 $18.81 $42.66 $114.84
 Lincoln$13.56 $18.38 $46.55 $190.53
 Mutual of Omaha $13.56 $20.08 $46.55 $134.05
 Principal $14.66 $19.03 $42.61 $110.03
 SBLI $14.79 $21.67 $51.68 $147.70
 Transamerica $20.34 $26.45 $51.17 $135.88
State Farm $18.70 $30.23 $58.95 $147.90
Allstate $31.46 $29.92 $60.50 $160.16

Female 20-year Term $250,000

CompanyAge 30Age 40Age 50Age 60
 Protective $11.83 $15.27 $31.18 $77.61
 Banner $11.74 $15.67 $31.17 $78.83
 AIG $11.81 $18.51 $35.59 $89.66
 Foresters $12.47 $16.63 $31.94 $85.97
 Lincoln$12.08 $16.14 $32.77 $160.13
 Mutual of Omaha $12.64 $19.21 $36.05 $94.02
 Principal $13.13 $16.63 $32.90 $77.92
 SBLI $13.31 $18.99 $36.46 $90.37
 Transamerica $13.98 $21.72 $40.64 $110.51
Allstate $14.74 $23.98 $46.64 $113.08
State Farm $22.40 $34.80 $66.35 $138.78

Male 20-year Term $500,000

CompanyAge 30Age 40Age 50Age 60
 Protective $20.21 $28.38 $75.68 $205.97
 Banner $20.12 $32.68 $74.39 $205.97
 AIG $20.24 $30.62 $77.76 $213.57
 Foresters $21.00 $31.50 $79.19 $223.56
 Lincoln$21.00 $30.28 $78.71 $214.33
 Mutual of Omaha $21.61 $33.42 $85.05 $249.55
 Principal $22.75 $31.50 $78.66 $213.50
 SBLI $21.32 $36.92 $96.06 $286.85
 Transamerica $23.65 $43.00 $95.46 $253.70
 State Farm $28.30 $41.75 $96.15 $273.20
Allstate $32.56 $52.80 $110.44 $281.16

Female 20-year Term $500,000

CompanyAge 30Age 40Age 50Age 60
 Protective $17.63 $24.94 $55.47 $139.32
 Banner $17.11 $25.49 $55.47 $145.00
 AIG $17.21 $27.16 $63.06 $163.40
 Foresters $18.81 $27.13 $57.75 $165.81
 Lincoln$18.16 $26.16 $58.41 $148.05
 Mutual of Omaha $18.99 $28.61 $64.05 $169.93
 Principal $19.69 $26.69 $59.24 $149.27
 SBLI $19.14 $29.67 $65.87 $173.03
 Transamerica $19.78 $34.83 $73.10 $204.68
Allstate $27.28 $40.92 $82.28 $190.08
State Farm $33.05 $53.50 $109.20 $258.85

*All rates quoted on this page are for a super-preferred healthy individual who does not use tobacco. Monthly rates are updated as of Feb 2018 and are subject to underwriting approval.*

Last Word

Saving money on life insurance starts with comparison shopping. Yes, I know this sounds elementary, but it’s a fact that’s mostly overlooked. Secondly, you can’t comparison shop with an agent because they only have one company to offer. I can’t really recommend Allstate Life Insurance because they are flat-out too expensive. If you would like to compare your Allstate insurance quote, give them a call, then run the quotes on this page. You can also give us a call at 866-326-3053 to get unbiased life insurance quotes.

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2018-07-13T03:13:45+00:00July 8th, 2018|Categories: Company Reviews|0 Comments

About the Author:

Ron is a licensed life & health insurance broker. He has two amazing rescued pit bull puppies. He also enjoys real food, heavy squats, critical thinking, and reading.

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