Perhaps not as well-known as some of the other top 10 dividend paying whole life insurance companies we have profiled, Lafayette Life is a great life insurance company that you should familiarize yourself with.
In the following Lafayette Life review we will focus on the companyโs history, strong ratings, life insurance policies, and the unique features offered.
Review of Lafayette Life Insurance Company
When seeking out the best life insurance policies and companies it is important that you get familiar with the various companies available in order to find the right fit for you.
The team at Insurance and Estates has put together many life insurance reviews from the top participating whole life insurance companies to help our clients in their search for the company that best meets their needs, goals, and objectives.
About Lafayette Life
Lafayette Life Insurance Company is a member of Western and Southern Financial Group. Lafayette Life was founded in 1905 as a mutual insurance company.
Being a mutual insurance company means that Lafayette Life is owned by participating policyholders, who share in the ownership rights of the company, as well as take part in the companyโs profits through dividends. In contrast, stock companies are owned by the shareholders and are operated in a way as to maximize shareholder value.
Lafayette Life is available in 48 states and the District of Colombia. It currently does not do business in New York or Alaska.
Highlights from The Lafayette Life Insurance Company’s 2022 Annual Report include:
Financial Performance:
- Record operating gain from life and annuity operations: Nearly $70.3 million.
- Marked the eighth consecutive year of growth.
- Life insurance sales experienced double-digit growth for the fourth straight year.
Dividends:
- Paid record dividends totaling $92 million to eligible policyholders in 2022.
- Marked the 117th consecutive year of paying a dividend.
Revenue and Expenses:
- Revenue from insurance premiums, net investment income, and fees: $766.351 million.
- Total benefits and expenses: $836.605 million.
- Operating income: $70.254 million.
Assets and Liabilities:
- Total invested assets: $6.023 billion.
- Total assets: $6.682 billion.
- Future policy benefits and claims: $5.885 billion.
- Total liabilities and equity: $6.682 billion.
Board of Directors and Senior Management:
- Led by John H. Bultema III, President and CEO.
- Includes executives from Western & Southern Financial Group.
Financial Strength Ratings:
- A+ Superior rating by A.M. Best.
- AAโ Very Strong rating by Standard & Poorโs.
- AA Very Strong rating by Fitch.
- Comdex Ranking of 96 out of 100.
Forward-Looking Approach:
- Emphasis on a sound, disciplined, and forward-looking approach.
- Committed to meeting customer needs and maintaining financial strength.
Policyholder Benefits:
- Benefits paid to policyholders: $256.5 million in 2022.
Life First-Year Premiums:
- Life first-year premiums showed significant growth, reaching $82.1 million in 2022.
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Lafayette Life’s Products and Services
Lafayette Life is focused on retirement services, annuities and life insurance.
Retirement Services
- Defined Benefit Plans
- 401k Profit Sharing Plans
Annuity Products
- Deferred Annuities
- Fixed Annuities
- Immediate Annuities
Life Insurance
- Term Life Insurance
- Whole Life Insurance
Types of Life Insurance Policies Offered
Although Lafayette Life is known more for its stellar whole life insurance, the company offers both term life and whole life.
Each type of coverage serves a unique purpose. However, in the debate between term life insurance vs whole life, we believe one product outshines the other.
Lafayette Life Insurance Policies [Plans and Features]
Lafayette Life offers two primary life insurance types: term and whole.
Lafayette Life Term Life Insurance
Lafayette Life offers convertible term life insurance which allows you to have a large guaranteed death benefit for a lower initial cost than whole life insurance. The policy is convertible which allows the owner to convert the policy to whole life prior to the end of the term.
Why consider convertible term life insurance?
Some of the primary reasons to consider convertible term life are the low initial costs and the ability to convert to permanent life insurance with no evidence of insurability required.
Lafayette Life Whole Life Insurance
Whole life is a type of permanent coverage that lasts your entire life and offers specific guarantees, including:
- Guaranteed death benefit,
- Guaranteed cash accumulation and
- Guaranteed level premiums.
Lafayette Life offers six different whole life policies.
- Heritage 15
- Contender 15
- Patriot 15
- Sentinel 15
- 10 Pay Whole Life
- Liberty 15
10 Pay Whole Life: the advantage of a 10 pay limited pay whole life insurance policy is that you get permanent coverage after only 10 years of level premium payments. The policy can be designed to maximize high cash value growth. After 10 years of premium payments you have a solid lifetime insurance plan that provides much utility.
Whole Life Insurance Dividends
Additional cash value and death benefit growth is possible through the use of dividends paid on participating whole life policies. Dividends are not guaranteed. However, Lafayette Life has paid dividends to participating policyholders since the companyโs inception back in 1905.
Life insurance dividends from a mutual company can be used to:
- Purchase paid up additions to increase your coverage and cash value
- Use dividends to pay premiums
- Earn interest with the company via dividend accumulation
- Receive cash in the amount of the dividend
Additional Benefits of Whole Life Insurance
Tax free life insurance policy loans
Using your cash value as collateral, you can take out a life insurance loan to be used for whatever you need..
Lafayette Life practices non-direct recognition. When you take out a loan, Lafayette Life continues to credit interest and dividends to your total cash value, not the cash value minus your loan. This is a huge advantage for anyone who uses a policy loan and wants to maximize the potential arbitrage available to purchase other income producing assets.
Tax deferred cash value growth
The Internal Revenue Code has a special section for cash value life insurance tax benefits. Under IRC 7702 cash value life insurance grows tax deferred. By taking out policy loans, rather than outright withdrawing your cash value, you can avoid ever paying taxes on your cash value growth.
Tax free death benefit
The life insurance death benefit is paid income tax free to your beneficiary. The death benefit is taxed is if your estate exceeds the federal estate tax exemption limit or if your estate exceeds your stateโs inheritance tax. Therefore, if your estate is large, proactive asset protection planning is necessary.
Lafayette Life Whole Life Insurance Riders
ย Accelerated Death Benefit Plus Rider: can access a portion of the death benefit for a qualifying terminal illness, medical condition, or chronic illness.
Long Term Care Rider: the long term care rider provides a monthly benefit if the insured cannot perform two of six ADLs.
Paid Up Additions: allows you to purchase additional “paid-up” insurance.
Guaranteed Purchase Option: allows the purchase of additional life insurance without needing to prove insurability. This is a great rider to add to life insurance for children.
Term Insurance Rider: Provides additional death benefit protection at a fraction of the cost of whole life.
Lafayette Life Insurance Company Review Conclusion
Lafayette Life is a solid choice when considering whole life insurance from a mutual company that practices non direct recognition. Although the company has some great policies available, a prudent shopper still needs to consider comparable options available in the marketplace.
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4 comments
Terry W Noble
I have several whole life insurance policies through LaFayette Life. I try to maximize the amount I am able to pay toward annual policy premiums but am able to pay about 1/2 of the amount. So I’ve been taking out policy loans to pay the other 1/2 of the maximum annual premiums. Is this a good strategy? If so, why?
Insurance&Estates
Hello Terry, thanks for commenting. One of our IBC experts will reach out to you to discuss if they haven’t already. If you haven’t received an inquiry from either Jason or Barry, feel free to e-mail your scenario to barry@insuranceandestates.com.
Best, I&E
James Pitts
To Company Historian: This is not your ordinary request for information. My Great Grandfather, John Willis Pitts, we believe was an Agent for Lafayette life Insurance Company, Circa 1905-20. I have a very old post card street scene with the company name on a banner. I also have a picture of a group of men sitting on a bench which I have no idea of the occasion but it may be a graduation from a class or a company photograph. I am willing to send these in digital format to you. I am looking for any information on John Willis Pitts. I know the following: His wife was Lilly Griffin Pitts, children; Milton Eugene, Clara May and George Willis . Any information would be greatly appreciated. Jim Pitts
Insurance&Estates
Hello James, thank you for commenting. Unfortunately we have no access to those records. Best of luck in your search!
I&E