Prudential Life Insurance Review 2020

Amid the COVID-19 pandemic, not all companies are accepting new life insurance applications. For the latest information on how to cope with financial stress during this emergency, see NerdWallet’s financial guide to COVID-19.

Founded in 1875, Prudential Financial is one of the largest life insurers in the U.S. The company offers a broad slate of universal and term life insurance policies. Extra features can be added to some policies to customize coverage.

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Prudential life insurance

Prudential ranked No. 12 out of the 20 best life insurance companies as scored by NerdWallet. NerdWallet’s life insurance company rankings take into account financial strength, customer satisfaction and consumer complaints. NerdWallet scores the largest life insurance companies that sell policies to individuals.

Several varieties of term life: They come with different features and options, and prices vary. The most basic and affordable is Term Essential. Other policies:

• SImplyTerm is sold online and policies can be approved within a few days without a medical exam for some applicants. Up to $500,000 in coverage is available for terms of 10, 20 or 30 years.
• TermElite and Term Essential offer more options, such as the ability to add life insurance coverage for minor children. If you convert a TermElite policy to permanent coverage within the first five years, you get a one-year premium credit.
• PruTerm One offers coverage for one year at a time. This may work for small-business owners who want coverage as they pay off short-term loans.

Wide selection of universal life policies: Several types of universal, indexed universal and variable universal life are offered, including survivorship policies. Survivorship life insurance insures two people on the same policy. The policy pays out when the second person dies. These permanent policies let you accumulate cash value. The potential for cash value growth varies among the products. The cash value growth in the indexed policies is based on the performance of a financial index, such as the S&P 500. With the variable policies, you pick the underlying investments that will be the basis for cash value growth.

Prudential complaints and customer service

Prudential’s life insurance subsidiaries drew fewer than the expected number of complaints to state regulators, compared with other life insurers according to three years’ worth of data from the National Association of Insurance Commissioners

Prudential scored “about average” for overall customer satisfaction in J.D. Power’s 2019 life insurance customer satisfaction study. The insurer scored “about average” across all six categories. Prudential ranked No. 11 overall among 24 companies surveyed.

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Prudential also offers additional products like annuities, investments and workplace benefits.

Methodology: Life insurance rankings

How we came up with our rankings: We started with a list of the largest life insurance companies and then calculated a total score based on three measurements, each with equal weight within the score. We then adjusted scores to a 300-point scale:

1. Customer satisfaction scores from J.D. Power, worth up to 100 points.
2. Complaint index scores from the National Association of Insurance Commissioners for individual life insurance, which measure each company’s share of complaints to state regulators relative to its share of total market premiums. We calculated each insurer’s complaint index, weighted for the market share of its subsidiaries, over a three-year period (2016-2018). We then adjusted those scores to a 100-point scale, with 100 meaning the fewest number of complaints and 1 equaling the expected number of complaints for companies of a similar size.
3. Financial strength ratings from A.M. Best, which indicate a company’s ability to pay future claims, worth up to 100 points. All of the companies shown have solid financial strength with ratings of “excellent” to “superior.”

Scores are based on the most recently released data as of Jan. 1, 2020.

Methodology: Insurer complaints

NerdWallet examined complaints received by state insurance regulators and reported to the National Association of Insurance Commissioners in 2016-2018. To assess how insurers compare to one another, the NAIC calculates a complaint index each year for each subsidiary, measuring its share of total complaints relative to its size, or share of total premiums in the industry. To evaluate a company’s complaint history, NerdWallet calculated a similar index for each insurer, weighted by market shares of each subsidiary, over the three-year period. Ratios are determined separately for auto, home and life insurance.