Life insurance should be a financial safety net for your dependents. If you died unexpectedly, the insurance payout could help your loved ones survive without your income.
But how do you find the right safety net? Hundreds of life insurance companies offer dozens of different policy types. Choosing the right policy could take weeks or months of research.
In this post, I’ll review Brighthouse Life Insurance’s policies to see how they would fit your needs. We’ll look at the pros and cons to find out what kind of customer would do best with Brighthouse.
Brighthouse Financial: What You Need To Know
Reviewing Brighthouse Life Insurance Company
Brighthouse Life sounds like a new company. But only the name is new. The company actually dates back to the 1860s.
For most of the past century and a half, Brighthouse was known by its old name, MetLife. MetLife still provides other kinds of insurance, including life insurance policies built into employee benefit packages.
Brighthouse Life focuses on individual, consumer life insurance policies which is probably what you’re looking for.
Any time you shop for insurance, be sure to check out the company’s A.M. Best rating which predicts the company’s financial stability.
Brighthouse checks out with A.M. Best, earning an A+ rating. The Better Business Bureau also rates Brighthouse A+.
These ratings measure Brighthouse’s financial stability and its reputation dealing with existing customers — both important boxes to check.
But these ratings do not measure whether the company would be your best option. To answer that question, we’ll have to dig a little deeper.
Brighthouse Life Insurance Policy Types
You’ll find all sorts of variations when comparing types of life insurance policies.
But no matter how complex or confusing, a policy will fit into one of these two categories:
- Term Life Insurance: Coverage lasts for a specific period of time, known as a term. After the term ends, the insurance contract will expire. Term policies offer the simplest, and usually the cheapest, options for coverage. With term life, you trade regular premium payments for having the coverage in place for your dependents.
- Permanent Life Insurance: Coverage lasts the rest of your life. Along with providing coverage, permanent policies also accrue an additional cash value you can redeem or leverage later in life.
Most young adults opt for term policies because they’re simpler and cheaper than permanent life insurance. They offer the most coverage at the lowest cost.
Brighthouse does not sell term policies with coverage less than $1 million, so if you’re looking for a smaller policy, look elsewhere.
But if you have a growing family, there’s a pretty good chance you may need at least $1 million in coverage. Your coverage should be able to replace your annual income for seven to 10 years.
With Brighthouse you can get terms lasting:
- 1 year
- 5 years
- 10 years
- 20 years
- 30 years
The 1-year or even 5-year policy wouldn’t provide a long-term solution. Such a policy could, however, buy some time if you’ve lost your employer-provided policy and need coverage while you seek a permanent solution.
Longer-term policies cost more, but your premium (insurance-speak for payment) will stay the same throughout the term. This means you can lock in a low rate now — while you’re young and healthy — and keep it for decades.
At the end of your term, you can renew the coverage at a significantly higher price or convert the policy to permanent insurance which also costs more but offers more flexibility.
Universal life insurance is a form of permanent coverage. Your premiums will almost always cost more compared to term coverage.
One reason for the extra money: Your premiums also fund a separate cash value attached to your policy.
Over time, as the cash value grows, you could use the money in a variety of ways:
- Cashing Out: If you no longer need coverage, you could cash out the policy’s value.
- Borrowing: You could use the cash value as collateral on a loan.
- Paying Premiums: Some policyholders use their cash value to defray the cost of the policy’s premiums in the future.
- Adjusting Benefit: You could use the cash value to adjust the policy’s coverage amount, also known in the industry as your “death benefit.”
- Donations: Some people even surrender their universal policies to a favorite charity later in life.
Brighthouse’s universal policies guarantee a gain of 2 percent annually on your cash value component, an amount comparable to what you’d get in a high-yield savings account.
The company also charges no surrender fees which is unusual. This means you wouldn’t have to pay a fee if you cashed out the policy.
Brighthouse does not sell a universal policy with coverage of less than $50,000. Lower coverage amounts like $50,000 make the most sense when you want to provide final expenses or leave money to pay off smaller debts.
Life Insurance Riders
With term or universal coverage, you can customize your policy with added extras known in the insurance industry as “riders.”
Brighthouse Life offers a standard assortment of riders, including:
- Disability Waiver of Premium: If you become disabled and can’t work, this rider could keep you from losing the coverage even if you can’t pay the premiums.
- Accelerated Death Benefit: You could access your death benefit while still alive to help pay medical bills related to a terminal diagnosis.
- Options to Convert or Renew: This rider would let you convert a 1-year policy to a 5-year policy without going through the underwriting process, though your premiums would increase. You could also convert a term policy to a whole policy, again with an increase in premiums.
Riders will increase your regular premium payments, so don’t overdo it with riders.
Pros and Cons of Brighthouse Financial
- No Surrender Fees: If you get a universal policy, avoiding surrender fees gives you more flexibility you’d like to claim your cash value sooner rather than later.
- Fast-Track Process: Millennials with no complex health histories can get a fast-track coverage decision from Brighthouse. If you use tobacco or have an underlying health condition such as high blood pressure, you won’t qualify for fast-tracking.
- $1 Million+ Term Policies: Brighthouse has competitive rates on higher face value term policies.
- No Smaller Term Policies: If you need only $350,000 or $500,000 in term coverage, you’ll need to find another insurer.
- Not All Online Process: You can apply for coverage electronically, but your decision will come in the mail. Also, you can’t currently change a beneficiary or cancel your coverage online. You’d need to send in paper forms.
- No Direct Access for Consumers: You’d still need to work with a financial planner or agent to buy even the simplest Brighthouse policy. Other leading carriers sell insurance directly to consumers online.
- No Full Line of Whole Policies: Looking for variable or indexed universal whole life policies? You’ll need to look beyond Brighthouse’s simpler universal policies.
Does Brighthouse Fit Your Needs?
If you need a large term policy and don’t mind working with an agent or financial planner, you’ll likely do well with Brighthouse.
You’ll also like Brighthouse if you want a smaller, universal life policy with easier access to the policy’s cash value.
Other insurance shoppers can do just as well or better with another carrier.