Many people think that life insurance is just another way to leave our heirs some money when we die, a way to provide them a safety net should the family suffer a loss of income. And while that is the primary reason for having a life insurance policy, it’s certainly not the only one.
Depending on the policy you select, it can also be a tool for retirement planning and long-term financial planning.
But not all life insurance policies are the same. There are many distinctions and variables that can make it hard to choose one.
As part of our continuing series of life insurance provider reviews, today we’re profiling Nationwide.
This Nationwide Life Insurance review can be used as a guide to help you learn more about what types of insurance Nationwide offers and if they are the right insurer for you.
Who is Nationwide?
Nationwide has provided insurance products in the United States since 1926. The company began as the Farm Bureau Mutual Automobile Insurance Company selling auto insurance. They changed their name to Nationwide in 1955 when they began selling a wide range of insurance policies from coast to coast.
Today, Nationwide is a publicly-traded company headquartered in Columbus, Ohio. Over the years, they have acquired several other insurance companies, expanding their offerings to provide coverage in many different categories, including life insurance.
In addition to providing auto, life, and homeowners insurance, Nationwide also offers annuities, retirement plans, and mutual funds. They are a Fortune 100 company with an A+ rating from A.M. Best, an A1 rating at Moody’s, and an A+ rating with S&P.
Nationwide Life Insurance Company has sound financial strength and is a reliable provider of life insurance and other financial services.
What Type of Life Insurance Does Nationwide Offer?
Like most national insurance companies, Nationwide sells a variety of different types of life insurance policies. From term life to permanent life, here is a breakdown of their most popular insurance products and what each one has to offer.
Of all the types of life insurance policies that exist, term life is by far the easiest to understand. With a term life policy, you get X amount of coverage and pay X amount of dollars each month, quarter, every six months or year for the length of the term you choose.
Nationwide allows you to choose policies with 10-year, 15-year, 20-year, or 30-year terms. You select a coverage amount and, upon your death, your beneficiaries will receive that payout, which is usually tax-free. If you outlive the term of your policy, your heirs get nothing.
Term life insurance is uncomplicated, easy to get, and affordable. But it is not a way to build wealth.
Permanent Life Insurance
Unlike term life, permanent life insurance provides you with coverage for the duration of your life. It doesn’t matter when you die; your heirs will receive your death benefit when you pass away.
If you outlive the term of a term life policy, the money you’ve paid for insurance premiums will be a waste. With permanent life insurance, it will never go to waste. There will always be a payout when you die.
Nationwide offers four different types of permanent life insurance:
With a universal life policy, one portion of your insurance premium goes towards paying for your life insurance coverage and one portion goes into a cash account.
As your account grows in cash value, it also accumulates interest at a fixed rate. You can withdraw from your cash account or borrow against it as a way to have additional cash in retirement.
Like universal life, whole life policies accumulate a cash value that you can borrow against. Nationwide offers whole life policies with fixed insurance premiums, so the premium rate you lock in at the start of your policy won’t increase over time.
Instead of just accumulating cash value, a variable whole life policy allows you to invest that cash value into various growth vehicles, such as mutual funds.
What makes this an attractive option is that the money you invest can potentially earn higher interest than the cash value alone, which is tied to a fixed interest rate.
Indexed life insurance accumulates cash value, but the interest you earn on that cash is based on the current stock market interest rate.
The upside to this type of policy is that it protects you from market losses, as opposed to a variable life policy where you could see losses based on where your cash funds get invested.
Further reading: Life Insurance for Retirement: The Right (and Wrong) Approach
Which Type of Policy is the Best?
While there is some flexibility in the specific type of policy you can take, we may recommend that physicians seek a permanent life insurance policy, such as whole, universal, or variable depending on your goals.
The reason that permanent life insurance wins over term life is that permanent policies offer a cash value component.
But there’s one added benefit as well:
Nationwide Life Insurance Insurance Premiums
From your age to your coverage amount, there are a variety of factors used to determine how much your policy will cost.
Here are the key factors that will affect the cost of your policy and why they have such an effect on how much you’ll pay.
Type of Policy
The type of policy you select will make a huge difference in your monthly payment. Term life insurance is the most affordable option. Whole, universal, and variable policies, which can accumulate cash value and provide investment opportunities, are considerably more because there is a cash component in addition to the insurance expense.
For term insurance policies, the term limit you select will play a factor in determining your monthly cost. In general, the shorter the term, the less you’re likely to pay.
The amount of life insurance coverage you need will directly affect the amount of your monthly cost. The more coverage you need, the more you’ll pay each month.
Most experts recommend that your policy payout be 20 times your annual income, but it’s up to the individual to decide if they want a lesser or a higher amount.
Like most insurance providers, Nationwide allows you to add a series of optional riders to your policy. These riders offer added benefits, but for every one you select, additional charges will be applied to your monthly cost.
Age and Health
You have control over your policy type, coverage amount, riders, and term limits. But how your age and health are rated by the company, which you cannot control, play a huge role in determining monthly rates.
The younger and healthier you are, the less you’ll pay.
Most policyholders will need to undergo a series of evaluations, including medical evaluations, before underwriting can begin. For this reason alone, it is always best to lock in rates when you’re young and healthy. As you age and your health diminishes, you will pay more.
It is common for life insurers to include some built-in benefits with their life insurance policies. These are used as an incentive to attract new policyholders, but they also provide the policy owner with additional protection and coverage.
Accelerated Death Benefit
If you are diagnosed with a terminal illness, the accelerated death benefit allows you to use a portion of your death benefit for your own care. This rider kicks into effect when your life expectancy is twelve months or less, and it offers a way to pay for your own extensive care in your final days.
The amount you borrow at the end of your life will reduce your death benefit dollar for dollar. For example, if you have a $500,000 death benefit and take $100,000 out on the accelerated death benefit, your beneficiaries will only receive $400,000.
With Nationwide, the accelerated death benefit rider can be added to a variety of term, universal, whole, and variable policies.
Children’s Term Insurance Benefit
The children’s term insurance benefit provides you with additional benefits for your children on top of your death benefit. Should you experience the loss of a child, this benefit can be used to cover medical bills and pay for funeral expenses, and it applies to both biological and adopted children.
Long-Term Care Benefit
The long-term care benefit allows you to collect some of your death benefits prior to death in order to pay for necessary long-term care. You can use this benefit to pay for an assisted living facility, home health care, or even to pay a family member to provide the care you need.
In addition to offering built-in benefits, Nationwide allows you the option to add a series of riders to your policy for added protection. Each rider you add will increase the cost, but they can be quite beneficial, depending on your needs and concerns for your family’s future.
Here are some of the optional riders that you can add to a Nationwide life insurance policy:
Waiver of Premium Rider
Should you become disabled and suffer a loss of income, the waiver of premium rider allows you to continue your policy without paying after six months of disability.
Nationwide allows its policyholders to add this rider to most permanent life insurance policies as well as term life policies.
Guaranteed Insurability Benefit Rider
Certain events in life, such as getting married, having a child, or adopting a child, often require you to rethink your life insurance plans. With the guaranteed insurability benefit rider, you can purchase additional life insurance should one of these life-changing events occur. Nationwide offers this optional rider with select whole life policies.
Accidental Death Benefit Rider
With the accidental death benefit rider, your beneficiaries can receive an additional payout if you die as the result of a fatal accident. This rider can be added to whole, universal, and variable policies.
Is Nationwide Life Insurance a Good Option for Physicians?
We’re all familiar with the slogan “Nationwide is on your side.” But do they really have your best interests at heart?
It’s no secret that insurance companies are in business to make money, but Nationwide does have a good reputation for offering fair pricing and making it easy to file a claim. According to a 2019 study conducted by J.D. Power, Nationwide life insurance ranks at #6 out of 25 companies, based on overall customer satisfaction.
Plus, Nationwide offers everything from auto and homeowners insurance to pet insurance to flood insurance, making it a viable option for any physician looking to secure a wide range of insurance policies at the same time.
If you haven’t already protected your family with life insurance, now is the time to do so. Nationwide is a good provider that’s certainly worth considering. But what’s more important than the insurer is the specific policy you select.
As a physician, you want to build wealth and have long-term financial freedom. And that means you’ll want a permanent life insurance policy with a cash value component.
There’s much more to life insurance than simply leaving money for your loved ones when you die. Before you sign a life insurance contract or select an insurance agent, seek the advice of a compensation specialist.
A financial planner will be able to guide you into the type of policy that can actually help you build wealth, enjoy tax-deferred and tax-free income, and leave your heirs in the best financial position possible.
Everyone has different long-term life insurance needs. For more guidance or advice on which type of policy you should select, contact Physicians Thrive now.
Subscribe to our email newsletter for expert tips about finances, insurance, employment contracts, and more!