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American National [ANICO] Life Insurance Review

May 7, 2018

Review of American National (ANICO) Life Insurance

American National Insurance Company (ANICO) offers a comprehensive suite of many of the different types of life insurance policies available in the marketplace. In the following American National review, we will take a close look at the company’s products and ratings to help you decide if American National is the right fit for you, based on your own need, goals and objectives.

Review of American National Life Insurance Company

Before we proceed to our review of the various products American National offers, let’s take a moment to learn more about the Company.

About American National

American National was founded in 1905. The Company is based out of Galveston, Texas.

American National is a stock insurance company and trades on the NASDAQ exchange under the symbol ANAT. The Company currently has a market cap of over $3 billion. The Company currently trades around $119 a share and reached an all time closing high of 158.65 a share on July 9, 2007.

In the first quarter of 2018, American National’s total life insurance in force increased by $1.8 billion to reach $104.9 billion as of March 31, 2018.

American National Life Insurance Company Ratings

Of the 4 major life insurance ratings agencies, American National has ratings from A.M. Best and S&P.

American National Ratings as of April 2018:

  • A.M. Best rating: A
  • Fitch rating: N/A
  • Moody’s Investor Service rating: N/A
  • Standard and Poor’s rating: A
  • Comdex Ranking: 78

American National Insurance Products

American National and its group of companies are focused on 4 main insurance arenas: Life, Annuity, Health and Property & Casualty.

Life

  • Whole Life
  • Term Life
  • Universal Life
  • Indexed Universal Life
  • Credit Life

Annuity

  • Fixed Deferred Annuity
  • Indexed Deferred Annuity
  • Single Premium Immediate Annuity

Health

  • Medicare Supplement
  • Supplemental Health
  • Credit Disability
  • Employer Stop Loss

Property & Casualty

  • Auto Insurance
  • Homeowner
  • Renters
  • Collector Car
  • Recreational Vehicles
  • Business Insurance
  • Agribusiness Insurance
  • Umbrella Insurance

American National Life Insurance Policies

Many financial pundits lump life insurance into term vs whole life, the reality is the life insurance market is much more nuanced. American National Insurance Company offers five types of life insurance coverage, term, whole, universal, variable and credit.

Benefits of Term Life Insurance

  • Lower Premiums Initially
  • Income Replacement
  • Mortgage Loan Protection
  • Convertible

Benefits of Permanent Life Insurance

  • Tax Benefits
    • Tax Deferred Cash Value Growth
    • Tax Free Death Benefit
  • Business Continuation and Succession
    • Buy Sell Agreements
    • Key Man Insurance
  • Corporate Incentives
    • Executive Bonus (Section 162) Plans
    • Non-Qualified Deferred Compensation Plans
    • Split Dollar Life Insurance
  • Estate Planning
    • Estate Preservation
    • Legacy Creation
  • Wealth Building
    • Infinite Banking

American National Life Insurance Policies [Plans and Features]

Life insurance products are issued by American National Insurance Company, Galveston, Texas or American National Life Insurance Company of New York, Glenmont, New York

Term Life Insurance

ANICO Signature Term™ Life Insurance provides the option for no medical exam life insurance for face amounts up to $250,000 for annual renewable term limits as well as 10, 15, 20 and 30 year terms.

Signature Term is convertible term life insurance. The policy can be converted from term to permanent coverage. The conversion option must be exercised by the end of the 5th policy anniversary or age 65.

Terminal illness, chronic illness and critical illness accelerated benefit riders may also be available.

Permanent Life Insurance

ANICO and American National Life Insurance Company of New York offers whole, universal and indexed universal life insurance coverage.

Whole Life

American National whole life insurance is available in a couple different policy options, including guaranteed issue, no exam whole life and participating whole life.

ANICO Signature Whole Life is a participating insurance policy, meaning the policy may potentially pay out dividends on top of the guaranteed cash value growth.

You can use your whole life insurance dividends for cash, to pay premiums, earn interest with the carrier or purchase paid-up additional insurance coverage.

ANICO Whole Life offers several different riders, such as Accelerated Benefit Riders, Guaranteed Insurance Option Rider, Paid up Additions Rider, Disability Premium Waiver, ANICO Signature Term Rider and Children’s Term Rider.

Universal Life

The main difference between universal life vs whole life is the flexibility inherent in universal life insurance.  With most universal life policies, the premium payments can be increased or decreased and the death benefit can be increased or decreased.

American National is one of the  best universal life insurance companies, particularly when it comes to the Companies GUL policy, Signature Guaranteed Universal Life Insurance.

Signature Guaranteed Universal Life (GUL) provides permanent coverage but at a huge discount to other types of permanent life insurance. This GUL policy often has one of the lowest premiums in the marketplace, making it an excellent choice when you are looking for permanent death benefit protection vs cash value accumulation.

ANICO’s GUL policy provides guaranteed death benefit protection as long as premium payments are made on time. Premiums are also fixed for the guaranteed policy length.

The Guaranteed Cash-Out Rider offers an additional cash-out guarantee. You can choose to surrender your policy for a partial or full refund on all your premiums paid on the 15th, 20th and 25th policy anniversary.

The policy may also include additional riders, such as terminal illness, chronic illness and critical illness accelerated benefit riders. A disability waiver of stipulated premiums and child rider may also be available.

Indexed Universal Life

American National’s Signature Indexed Universal Life provides lifetime coverage, with the potential for higher cash value growth than ordinary whole life.

One of the benefits of an IUL is that the interest is credited based in part on the performance of a particular index that the IUL tracks. If that index performs well, you have an opportunity to earn a higher return on your cash value based on the IUL’s participation rate and cap rate.

The participation rate of the policy determines how much your policy participates in the return of the tracked index. For example, a 100% participation rate would return 100% of the index gains, minus any fees or costs.

The cap rate is the maximum amount of return that will be credited to your policy. Cap rates vary by policy and index chosen, but typically range from 9-14%, with potential uncapped policies also available.

Another benefit of IUL policies is that there is also a floor, which is the minimum interest that will be credited. The floor prevents the policy from participating in negative market returns. For example, if the floor is 0% and the stock market crashed 40%, the policy will return 0%, rather than take the hit on the full 40% stock market loss.

In addition to flexible premium payments inherent with an IUL policy, you can also choose 3 different death benefit options. One option, return of premium, must be chosen before the policy is issued. You can also switch back and forth from a level death benefit to an increasing death benefit option.

ANICO’s Signature IUL offers both an indexed strategy account and fixed account. The indexed account tracks the performance of the S&P 500 Index. The fixed account has an interest rate periodically fixed by the Company.

The Signature IUL offers the following interest crediting options:

  • Fixed Account (2.5% cumulative interest guarantee)
  • Point to Point with Cap (0% floor)
  • Point to Point with Cap and Higher Floor (1.5% floor)
  • Point to Point with Specified Rate
  • Point to Point Uncapped with Interest Rate Spread

ANICO Signature IUL offers several different riders, such as Accelerated Benefit Riders, Guaranteed Increase Option Rider, Overloan Protection Rider, Disability Waiver of (Minimum or Stipulated) Premium, ANICO Signature Term Rider and Children’s Term Rider.

Additional Benefits of Permanent Life Insurance

When most people hear the word “life insurance” they think of a death benefit. However, the death benefit is only one of the many benefits of life insurance.

Tax free life insurance policy loans

Tax free life insurance loans are available, using your cash value as collateral. You can borrow directly from the insurance company. Another option is to borrow from a local bank that might provide more favorable terms on your loan, increasing your potential for positive arbitrage.

Tax deferred cash value growth

IRC 7702 governs cash value life insurance, and under the code, cash value accumulation grows tax deferred. And if you utilize the policy correctly you will never need to pay taxes on the cash value growth.

Tax free death benefit

The death benefit from life insurance is not taxable in most situations. However, one way a death benefit is taxed is if your estate exceeds the federal estate tax exemption limit, which is $11.2 million in 2018.

 

American National Insurance Review Conclusion

American National is a fantastic insurance company, offering many great life insurance policies to meet just about everyone’s needs. However,  the reality is there is no one size fits all company. Rather, the right company and policy design will depend on many factors, including your specific needs, goals and objectives. Give us a call today for a free strategy session and see if ANICO is the right fit for you.