Shopping for Term? Heard of Savings Bank Life of Massachusetts (SBLI)?

Located in one of the beltway-ish suburbs of Boston, The Savings Bank Life Insurance Company of Massachusetts or SBLI as it's more commonly known is a somewhat unique little insurance company with a reputation for two main accomplishments:

1.  Having one of the highest 20 year internal rates of returns on its participating whole life policies

2.  Having some of the most competitively priced term insurance on the market

The first accomplishment is a topic for another day. Today we'll discuss SBLI's position as a player in the term at the lowest possible price game.

The No Nonsense Company

SBLISBLI markets itself as the no nonsense company. And while were not sure exactly what that's supposed to mean, we will give them credit for maintaining a simple and straight to the point web site.

The homepage of the SBLI web site is laser focused on one thing, helping you buy life insurance (preferably from them). It includes a term quoting engine–so you can see their rates–and a three step guide to help you: research, compare, and begin the purchasing process.

SBLI's term products are also very straight forward. They have level term products available in 10, 15, 20, 25, and 30 year level periods. Riders include a child coverage rider and waiver of premium–that's it. The waiver of premium covers the insured to age 65, but I suspect the fierce term spread sheeting agents out there would be quick to remind me that few people purchase waiver of premium on term insurance, especially when opting for the lowest possible price on a policy under $1 million. No, waiver is only for those stuffy mutual sales agents who sell already overpriced term insurance (wink wink).

You can purchase SBLI's term in amounts as little as $100,000 and as much as $30,000,000 (in several states the cap is$20,000,000). The company's internal retention is $500,000.  The product is convertible to permanent products to age 70 or until the end of the level period.

The No Nonsense Health History

We've mentioned before that some of the spreadsheet leaders tend to have tougher than average underwriting practices, and SBLI–as a spreadsheet leader–is no stranger to this commonality. If you don't have a stellar health record SBLI may not be your best bet. If on the other hand you do have a nearly flawless medical history good fortune may smile upon with cheaper life insurance rates.

Just be ready for a somewhat slower than usual underwriting time line. SBLI has become pretty innovative in their approach to accepting applications, but they sometimes lag in application turn around. They are a small company with a large national (minus a few states) marketing focus (i.e. they are busy). It's not a deal breaker by any means.

Not to be Confused with SBLI Mutual of New York

If you're out searching the internet for more information on SBLI, you may run into some information regarding a similarly named Savings Bank Life Insurance Co. of NY. This company (whose founding was based off the original marketing plan behind SBLI of Mass) is a separate company that operates in the State of NY. It's also a company in a somewhat scary financial situation right now, but please don't confuse the two as they have nothing to do with each other.

Not a Bad Choice

For those looking for cheap term rates in great health, Savings Bank Life of Mass can be a pretty good choice. They won't be a super competitive carrier for face amounts above $1 million in most cases, and they tend not to compete well in the 50+ market. As far as the cheap term carriers go, they are presently one of the few remaining carriers with a level term product that goes beyond 20 years.

They aren't known for generous underwriting, so if you aren't the poster child for good health you may do better elsewhere with carriers more well known for lenient underwriting.  If you want some guidance on who those carriers are, please contact us.

Just like all other companies out there, SBLI has a market for whom they are an excellent choice, but they aren't the 100% solution to everyone.

5 Responses to “Shopping for Term? Heard of Savings Bank Life of Massachusetts (SBLI)?”

  1. Paul Cohen says:

    There is a difference between CHEAP and INEXPESIVE. Also the conversion options need to be considered. Check out Ohio National.

    • Brandon Roberts says:

      Hi Paul,

      Ohio National another great company for the cheap term fight. And they compete very well against SBLI.

      As for conversion options, SBLI is no more restrictive regarding conversions when compared to ONL. It could definitely be argued that ONL has a more complete lineup of options on the conversion side (providing the correct Ohio National term product is purchased).

      I’m not sure we can categorically declare one better than the other. And for those looking beyond 20 years, ONL is unfortunately not an option at this time.

  2. Andy IL says:

    Thanks so much for mentioning their name. I spent an hour on the phone with them and they seem like a solid company. I’m not looking at term but a large 6M whole/blended life policy to maximize cash value. They have the most attractive premiums and comparable cash values of the big boys 50+ years from now but I’m concerned about their staying power. Would you buy a large policy or give this company 1+ Million?

  3. Brandon,

    Thanks for featuring us. We appreciate the complimentary words, particularly about our website, low rates, and strong returns on our whole life product. I want to clarify a couple points, however:

    • Our waiver of premium covers the insured to age 65, not 55.
    • Term policies are now available in face amounts of at least $20 million (and as high as $30 million in an increasing number of SBLI states), and our internal retention amount is $500,000.
    • While our high underwriting standards help us maintain the excellent financial strength that families and distribution partners have come to expect from us, we remain highly competitive versus other insurers. In fact, 40 percent of the policies we have written thus far in 2012 are Preferred Plus, which is our best premium class.
    • Applicants with conditions such as hypertension, asthma, and anxiety are eligible for our Preferred Plus rates, depending on the severity of each condition.
    • We are committed to staying competitive in the term marketplace and maintaining our full product portfolio, including 10, 15, 20, 25 and 30 year term.
    • Our level term products are convertible at the earlier of age 70 or the end of the level premium guarantee period to Whole Life or Conversion Universal Life, depending on state availability.

    Thanks again, and keep up the great work.

    Michael O’Neill
    SBLI’s Senior Vice President of Marketing & Distribution

    • Brandon Roberts says:

      Thanks Michael. The information regarding waiver was pulled from iPipeline and I’m very sorry that the incorrect information was posted. Your diligence in correcting this information is a testament to your company’s quality and overall “having-it-together-edness.”

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