Penn Mutual is an excellent company and makes up the elite class of the best whole life insurance companies for cash value growth. But, is it going to be the right insurance company for you? And that’s the real question! And one that we hope you’ll be better able to answer for yourself after reading I&E’s complete review of Penn Mutual where we will discuss the companyโs history, ratings, products and benefits.
Comprehensive Review of Penn Mutual
Penn Mutual, established in 1847, stands as a beacon of stability and innovation in the life insurance industry, serving over 1.1 million clients across the United States. With more than 175 years of experience, this mutual company has consistently demonstrated its commitment to policyholders’ best interests, a principle deeply rooted in its unique ownership structure where policyholders, not outside shareholders, own the company.
As of 2023, Penn Mutual’s financial strength is evident in its impressive $200 billion in assets under control and a robust total surplus of $3.3 billion. This financial prowess enables the company to fulfill its promises, as demonstrated by the $2.8 billion paid out in life insurance and annuity benefits in 2023 alone. The company’s product portfolio spans a comprehensive range of offerings, including life insurance, annuities, wealth management, and institutional asset management solutions, all designed to meet the evolving financial needs of individuals, families, and businesses.
Penn Mutual’s success is built on the dedication of its 3,200 employees and a network of 9,100 financial professionals who provide personalized guidance to clients. This commitment to excellence is reflected in the company’s consistently high ratings from major agencies, including an A+ (Superior) rating from AM Best. As Penn Mutual looks to the future, it continues to balance its rich heritage with forward-thinking strategies, adapting to changing financial landscapes while maintaining its core values of integrity, trust, and putting policyholders first.
Highlights from Penn Mutual’s 2023 Annual Report include:
Company Overview:
* Established in 1847, now over 175 years old.
* Serves 1.1 million clients.
* Employs 3,200 people.
* Has 9,100 financial professionals.
Financial Performance:
* Total revenue: $5.3 billion.
* Total assets under control: $200 billion.
* Life insurance and annuity benefits paid: $2.8 billion.
* Total surplus (capital): $3.3 billion as of December 31, 2023.
Business Segments and Products:
* Offers life insurance and annuities.
* Comprehensive product portfolio including wealth management and institutional asset management.
Company Strengths:
* Statutory assets under management: $41.6 billion.
* Life insurance in force: $287 billion.
* 498K total policy count.
Investment Portfolio:
* Diversified with a focus on asset/liability management, liquidity, and conservative risk approach.
* 79.4% in cash and short-term/investment-grade bonds.
* Also includes stocks, venture capital, private equity, and real estate.
Sales Performance:
* New life insurance sales: $386 million.
* New annuity sales: $945 million.
* Total GAAP assets: $46.7 billion.
Ratings and Recognition:
- – AM Best: A+ (Superior)
- – KBRA: AA (Very Strong)
- – Moody’s: Aa3 (High Quality)
- – Standard & Poor’s: A+ (Strong)
- – Fitch: AA- (Very Strong)
Family of Companies:
* The Penn Insurance and Annuity Company (PIA)
* The Penn Insurance and Annuity Company of New York (PIA-NY)
* Vantis Life Insurance Company
* Janney Montgomery Scott LLC
* Hornor, Townsend & Kent, LLC (HTK)
* Penn Mutual Asset Management, LLC (PMAM)
Penn Mutual’s 2023 Annual Report showcases the company’s strong financial performance, commitment to policyholders, and focus on long-term stability and growth.
About Penn Mutual
2024 Penn Mutual Dividend Interest Rate for AWL
For 2024, Penn Mutual has increased its dividend interest credit rate for the new Accumulation Whole Life (AWL) product. The updated rates are as follows:
1. Non-loaned values: 6.00% (increased from 5.75% in 2023)
2. Loaned values (Years 1-10): 5.55%
3. Loaned values (Years 11+): 6.20%
Penn Mutual continues to offer a preferred loan provision. As you can see, policies with 11+ years are now credited 6.20% on the loaned value, which is actually higher than the loan interest rate (also 6.20% for 2024). This effectively creates a positive arbitrage situation for policyholders after year 11, enhancing the policy’s value and flexibility.
The increase in the dividend interest credit rate from 5.75% to 6.00% for non-loaned values demonstrates Penn Mutual’s commitment to providing competitive returns for policyholders. This rate, combined with the strong base policy and enhanced riders of the AWL product, positions it as a powerful tool for cash value accumulation and long-term financial planning.
David O’Malley
The great success of Penn Mutual in recent years has to be attributed, at least in part, to David O’Malley, the the president and chief executive officer of The Penn Mutual Life Insurance Company. According to Penn Mutual’s website, O’Malley began his career with the company in 1994 as an intern. Over the course of time he was promoted to executive leadership, having held the roles of chief risk officer, chief financial officer and, most recently, president and chief operating officer. It is good to see companies that still value promoting from within.
New Automated, Accelerated Experience
Penn Mutual is an innovator in the life insurance industry. Nowhere is that more evident that in the Company’s latest move towards automated accelerated underwriting which provides no medical exam life insurance. Penn Mutual offers no medical testing required policies with approvals in as quick as 24 hours, in contrast the the industry average of around a month. The policy is available for individuals ages 20-65 with face amounts up to $10,000,000.
According to Penn Mutual,
[The innovative new no exam required accelerated experience] has the automated intelligence to make key decisions and integrate with online tools and databases to quickly verify, authenticate and confirm, speeding decision making and approvals.
Complimentary Webinar on High Cash Value Whole Life
Accumulation Whole Life (new for 2024)
Penn Mutual, a stalwart in the life insurance industry for over 175 years, has once again demonstrated its commitment to innovation and policyholder value with the introduction of its new Accumulation Whole Life (AWL) product. Launched in September 2024, this cutting-edge offering is set to redefine the landscape of high cash value whole life insurance.
The AWL product is designed to meet the evolving needs of clients seeking a robust financial foundation, particularly business owners and individuals looking to maximize cash value growth. It combines the stability and guarantees of traditional whole life insurance with enhanced features that accelerate cash value accumulation and provide unparalleled flexibility.
Key features of the new AWL product include:
1. Increased Dividend Rate: Penn Mutual has raised its dividend rate to an impressive 6.00%, positioning the AWL product at the forefront of competitive whole life offerings.
2. Superior Base Policy: The AWL boasts one of the strongest base policies in the industry, outperforming major carriers in 20-year and 30-year cash value Internal Rate of Return (IRR).
3. Enhanced Paid-Up Additions (PUA) Riders: With reduced PUA charges (10% in year 1, 6% thereafter) and increased maximum PUA premiums, the AWL allows for significant acceleration of cash value growth.
4. Flexible Protection Rider (FPR) Improvements: The maximum term blend ratio has been doubled to 2:1, offering greater design flexibility and potential for improved early cash values.
5. Long-Term Performance: The AWL is designed to outperform many competitors in long-term cash value and death benefit IRRs, particularly in 10-pay and max-funded designs.
This new product reflects Penn Mutual’s understanding of the market’s demand for policies that not only provide death benefit protection but also serve as versatile financial tools. The AWL’s design allows it to adapt to changing needs throughout a policyholder’s lifetime, from providing a financial safety net for a growing business to offering tax-advantaged retirement income.
As we delve deeper into the specifics of the Accumulation Whole Life product, it becomes clear that Penn Mutual has created a powerful solution for those seeking to build a strong financial foundation with the potential for significant long-term growth.
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Additional Penn Mutual Products
Penn Mutual focuses on both annuities and life insurance.
Annuity Products
- Fixed Annuities
- Immediate Annuities
- Variable Annuities
Life Insurance
- Term Life Insurance
- Whole Life Insurance
- Universal Life Insurance
- Variable Life Insurance
- Joint or Survivorship
Penn Mutual Life Insurance
Although Penn Mutual focuses more on the permanent life insurance and the benefits therein, the company offers both term life and permanent life insurance.
Term Life Insurance
Term life insurance allows you to have a large guaranteed death benefit for a lower initial cost than permanent life insurance.
Penn Mutual offers 10, 15 and 20 year term lengths.
Penn Mutualโs convertible term life insurance allows the insured to convert all or a portion of the policy to permanent coverage prior to the end of the term or age 70.
The advantage is that you can get a lot of coverage for a low cost while your income is lower, and then convert that coverage to a superior policy down the road once you become more established.
Permanent Life Insurance
Permanent life insurance, and whole life in particular, offers many lifelong benefits. One of the primary benefits is that under IRC Section 7702, cash value life insurance is offered many tax advantages.
Anytime the internal revenue code offers tax incentives it makes sense to utilize those tax incentives to the fullest.
Addition benefits of cash value life insurance:
- Income tax free death benefit
- Tax deferred cash value growth
- Tax free life insurance loans
- Tax free cash withdrawals up to basis
Guaranteed Whole Life
Whole life insurance lasts your entire life and offers specific guarantees, including a guaranteed death benefit, guaranteed cash accumulation and guaranteed level premiums.
Additional cash value growth is available through dividends. Although not guaranteed, Penn Mutual has paid dividends each year since the company was founded in 1847.
Dividends are valuable and can be used to:
- Purchase paid up additions
- Pay Premiums
- Earn interest with the company
- Cash Out
Penn Mutual’s Guaranteed Choice Whole Life offers many flexible options, such as ordinary whole life to age 100, as well as limited pay life insurance, such as 20 pay and paid-up at age 65.
Direct Recognition in Penn Mutual’s AWL Product
Penn Mutual practices direct recognition when calculating dividends for policies with outstanding loans. Here’s how it works for the new Accumulation Whole Life (AWL) product:
- Direct Recognition Explained: When a policy loan is taken, Penn Mutual adjusts the dividend interest rate on the portion of cash value that is borrowed against. This means the dividend calculation recognizes the presence of the loan.
- Dividend Interest Rates:
- Non-loaned values: 6.00%
- Loaned values (Years 1-10): 5.55%
- Loaned values (Years 11+): 6.20%
- Impact on Dividends: The dividend received when there is an outstanding policy loan may differ from a policy without loans. However, Penn Mutual’s approach is designed to be fair and transparent.
- Preferred Loan Provision: After year 11, the dividend interest rate on loaned values (6.20%) actually exceeds the loan interest rate (also 6.20% for 2024). This creates a favorable situation for policyholders, effectively negating any negative impact of direct recognition and potentially creating a positive arbitrage.
- Partial Recognition: It’s important to note that dividends are only adjusted on the loaned portion of the cash value. The non-loaned portion continues to receive the full dividend interest rate of 6.00%.
This direct recognition approach allows Penn Mutual to maintain the integrity of its dividend structure while still offering competitive rates and favorable loan provisions, especially in the long term. It’s designed to balance the interests of all policyholders while providing flexibility for those who choose to utilize policy loans.
High Early Cash Value
Penn Mutual’s cash value whole life insurance policy excels above the competition in most areas but it may not always be the king when it comes to early high cash value availability. There are other mutual insurance companies that offer policies that may be superior for the person who is looking to have as much cash value available as soon as possible.
With that said, for those with a long term horizon beyond the first few years, Penn Mutual will most likely match or outperform the competition.
Now let’s take a look at yet another benefit of Penn Mutual, the Chronic Illness Accelerated Benefit Rider.
Chronic Illness Accelerated Benefit Rider
One of the biggest concerns people have as they age is how will they pay for long term care. And not just any long term care, but long term care in the home.
Most people prefer to remain in their home rather than a nursing home or assisted living facility. One of the more affordable options is life insurance with living benefits.
There are two types of accelerated benefit riders that can be added to permanent life insurance and used to help cover the costs associated with long term care: long term care rider and chronic illness rider.
Chronic Illness Rider
With a chronic illness rider, if you qualify for the benefit, you can access a portion of your death benefit in advance. It is considered a “living benefit” because you use it while you are living, unlike the death benefit that goes to your beneficiary when you die.
Penn Mutual’s Chronic Illness Rider is automatically included in newly issued policies where eligible. If you qualify, you can receive a tax free income benefit (based on Internal Revenue Section 101(g)), which is an acceleration of your death benefit for tax purposes and generally not a taxable event.
To qualify for Penn Mutual’s chronic illness accelerated benefit rider you must be unable to perform 2 of 6 activities of daily living, or have a severe cognitive impairment for a period of 90 consecutive days, and continuous care in an eligible facility or at home is expected to be required for the rest of your life.
Accessing the death benefit to pay for long term care costs decreases your death benefit, but it is a valuable resource to have, rather than tapping into your nest egg. You spouse and beneficiaries will thank you for your proactive planning.
Once you qualify for the income benefit, you can use the money for whatever you need. That includes in home care, home modifications, etc.
Typically, your daily income benefit is subject to the current IRS per diem maximum of $360 a day. You can receive income benefits monthly, quarterly, semi-annually or annually.
Another benefit of Penn Mutual’s Chronic Illness Rider is that you can use it with either a level death benefit or increasing death benefit. So your policy death benefit can grow over time, increasing the amount of chronic illness income benefit you would have access to later in life.
Please note: Not all states have approved the rider.
Additional Whole Life Insurance Riders
โ Accelerated death benefit – offers the option of taking a portion of the death benefit early if the insured is diagnosed as terminally ill.
โ Child’s Term Insurance – term rider providing life insurance for children until age 23, at which point the policy can be converted to permanent coverage.
โ
Chronic Illness Accelerated Benefit Rider – as mentioned above, the chronic illness rider offers tax free accelerated benefit if you are diagnosed as chronically ill.
โ
Disability Waiver of Premium – Your premiums are waived if you are determined to be permanently disabled.
โ Guaranteed Purchase Option – option (7) to purchase additional coverage up to $100,000 with no evidence of insurability
โ Flexible Protection Agreement – Balances the death benefit with term life, offering a unique blend of whole life and term life.
โ Enhanced Permanent Paid Up Additions – Through the addition of extra premiums, this rider allows you to increase your cash value, potential dividends and death benefit based on the length of time you choose to implement this benefit.
Universal Life Insurance
Universal life insurance is permanent coverage that offers flexible premiums, guaranteed death benefit, and cash value growth. Penn Mutual offers four different universal life policies.
Accumulation Builder Select Indexed Universal Life Accumulation Builder Advantage Indexed Universal Life and
Indexed account to either the S&P 500 Index or the S&P Global Broad Market Index.
Provides an annual fixed interest rate that will never drop below 1%, despite negative return in the stock market.
- Death benefit protection
- Premium flexibility
- Potential for strong cash value growth
Protection Guard Universal Life Guaranteed Protection Universal Life
- Primarily focused on providing a lifetime death benefit for a lower cost
Protection Universal Life (PUL)
- Current assumption UL with a no-lapse guarantee up to age 100
- Excellent Pricing vs the Competition
- Cash Value Accumulation
- Beginning in year 11, 0.25% Policy Value Enhancement
- Available in all states, including New York
Survivorship Plus Indexed Universal Life
Second to die life insurance. Covers the lives of two people and the death benefit is paid upon the death of the surviving spouse or partner.
- Provides lifetime coverage at a lower cost than insuring only one person
- Provides cash value growth
Diversified Growth Variable Universal Life (VUL) & Diversified Advantage VUL
Variable life insurance provides policy cash value growth through separate investment options.
- Lifetime Protection
- Potential for high cash value accumulation
- Flexible coverage and premium options
- Greater upside potential/greater risk
Penn Mutual vs Northwestern Mutual
Penn Mutual offers some of the best dividend paying whole life insurance in the U.S. Northwestern Mutual has consistently been the leader in whole life insurance sales for the better part of the last decade.
Both companies are highly rated. Penn Mutual has a total Comdex ranking of 92 out of 100, while Northwestern Mutual has an industry leading Comdex ranking of 100.
Northwestern Mutual is a captive company, which means only agents under the Northwestern Mutual banner may sell the company’s whole life policies. Penn Mutual is a non-captive company, which allows outside agents to offer Penn Mutual’s policies to their clients.
Below is a snapshot of the two companies head to head. But at the end of the day, the best whole life insurance company for you will be the one that best meets your specific needs and goals.
Penn Mutual Life Insurance Review Conclusion
At I&E, we are big fans of this mutual company. It offers many excellent high cash value growth life insurance policies. Further, the company has a long dividend history, even during the Great Depression and Great Recession. So, if you are looking for permanent coverage from a solid mutual company, Penn Mutual is one of the best options in the marketplace.
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A Modern Approach To The Infinite Banking Concept
18 comments
william C stewart
Dear Sir or Madam, I’m interested in establishing an infinite banking process using a whole life policy. If I funded the policy 100% up front how soon after initiating the policy could I withdraw money as a loan to purchase more real estate?
Thanks so much for your kind consideration.
Bill Stewart
Steven Gibbs
Hi William, thanks for connecting, we referred your question to our IBC expert Barry Brooksby so look for an email, or you can email him to request a call also at barry@insuranceandestates.com.
Best, I&E Pro Team
Kofi Amoh-Tonto
I want to know more about index universal life insurance
SJG
Hi and thanks for connecting. You can reach out directly to request a call from our IUL expert Jason Herring by emailing him at jason@insuranceandestates.com.
Best, I&E
Paul Dow
Looking to talk to an agent about IBC on a whole life policy. Do you have agents in AZ?
Insurance&Estates
Hello Paul, we serve folks in all 50 states. A great way to get started to request a call with Barry Brooksby at barry@insuranceandestates.com.
Best, Steve Gibbs for I&E
Garett Zorosky
I am an individual investor. I am extremy interesed in this product. How do I get started? Thanks
Garett Zorosky 724-550-5382
Steven Gibbs
Hello Garett, we have forwarded your request to our expert Denise Boisvert who has helped thousands of people set up great high cash value Penn policies. You can reach out to her at denise@insuranceandestates.com to request a call to review your goals. This first step would be followed by an application and approval period.
Best, Steve Gibbs for I&E
Steven Gibbs is a licensed insurance agent, and the following agent
license numbers of Steven Gibbs are provided as required by state law:
Resident License; AZ agent #17508301,
Non-resident Licenses: TX agent #2273189, CA agent #0K10610,
LA agent #769583, MA agent #2049963, MN agent #40563357,
UT agent #655544.
Albert Cosio
I would like to find a mutually owned company that pays dividends on a whole life insurance policy with high cash value and to walk me through infinite banking. Thank you
Insurance&Estates
Hello Albert and thanks for your inquiry. Your request has been for forwarded to our whole life expert Barry Brooksby and you can also connect with him at barry@insuranceandestates.com to get started.
Best, Steve Gibbs for I&E
Chad Yeager
I’m shopping around for whole life insurance that’s creating high cash value policies?
Insurance&Estates
Hi Chad, if you’re shopping, we have a lot of resources on our website to educate you and when you’re ready, you can connect with Barry Brooksby at barry@insuranceandestates.com.
Best, Steve Gibbs, for I&E.
Colette Alls
Interested in a whole life quote with a chronic illness rider.
Insurance&Estates
Hello Colette, if you haven’t yet connected with one of our experts, go ahead and e-mail Barry Brooksby at barry@insuranceandestates.com.
Best, Steve Gibbs for I&E
Damon Gardner
I tried to obtain a whole life cash value policy through a financial planner Ive used in past. After 3 months of questionnaires, inquires, medical survey and blood test I was advised Guardian would not make me an offer and that I needed to find a specialty insurance policy. Before I try again was I too honest on my health survey or am I banned forever in getting a ibc whole life policy because Im over 50 amd not in perfect health? I was very interested in the companies who have IBC policies with no medical exam
Bobby Glass
We are considering setting up WL policies for our grandchildren to help build future wealth for them. I would like to have five cash value illustrations, one for each grandchild, to share with them at a meeting we are planning with them to share our vision.
Would appreciate if you could generate these illustrations for us.
Thanks,
Bobby Glass
Insurance&Estates
Hello Bobby, awesome! We appreciate the opportunity to help you and one of our IBC experts should’ve reached out to you already. I you haven’t yet connected, e-mail barry@insuranceandestates.com. Best! Steve Gibbs for I&E
Tony spruill
Hi I m seeking more information about your company
I d like to purchase a whole life insurance policy and Iโd like to use your company
Thank you