If you or a loved one are researching options to alleviate the future financial burden of end-of-life costs, understanding what Philadelphia American offers is a crucial first step. This deep dive will explore the company's history, products, pros and cons, and who its policies are ideally designed to help.
The Foundation of Philadelphia American: Stability and Experience
Founded in 1983 and headquartered in Springfield, Illinois, Philadelphia American is a subsidiary of Palisades Group, Inc., a larger insurance holding company. This structure provides a foundation of shared resources and stability.
For consumers, the most critical indicator of an insurer's reliability is its financial strength rating, which signifies its ability to pay out future claims. Philadelphia American holds a "B++ (Good)" rating from A.M. Best, a leading global credit rating agency focused on the insurance industry. You can learn more about what these ratings mean on A.M. Best's financial strength ratings page.
This rating indicates a good ability to meet its ongoing insurance obligations, providing policyholders with a degree of confidence. The company is licensed to operate in 49 states plus the District of Columbia (it is not available in New York).
Philadelphia American's Product Portfolio: Focused on Final Expense
Unlike large, full-service insurers that offer a wide array of products like term, universal, and variable life insurance, Philadelphia American specializes in a specific type of coverage. Their product lineup is designed for accessibility rather than comprehensiveness, focusing on individuals who may have difficulty qualifying for traditionally underwritten policies.
Their flagship product is a simplified issue whole life insurance policy. It's essential to understand the components of that term:
- Simplified Issue: This means the application process does not require a medical exam. Instead, applicants answer a series of health-related questions. Approval is based on these answers.
- Whole Life: This is a form of permanent life insurance. It provides coverage for your entire lifetime, as long as premiums are paid. It also features a fixed premium that never increases and a cash value component that grows slowly over time, tax-deferred.
The primary use for these policies is final expense insurance (also often called burial insurance). The death benefits are typically smaller, ranging from $2,000 to $30,000, and are explicitly intended to cover costs like:
- Funeral and burial services
- Outstanding medical bills
- Cremation costs
- Other personal debts
This targeted approach makes the coverage manageable and accessible for its intended audience. Before committing to any policy, it's always wise to read a general guide to buying life insurance from a neutral source like the Insurance Information Institute to understand all your options.
How to Apply: The Simplified Issue Process Explained
The application process for a Philadelphia American policy is straightforward, reflecting its design for simplicity and accessibility. Since there is no medical exam, the hurdles are significantly lower than with a fully underwritten policy.
The process primarily involves completing an application with a series of yes/no health questions. Your answers to these questions will determine your eligibility and your premium rate. It's crucial to answer these questions honestly, as misrepresentation can lead to a claim being denied later.
Depending on the answers, an applicant could be approved at a standard rate, approved with a higher premium, offered a policy with a graded death benefit (a waiting period for full coverage), or declined altogether.
Weighing the Pros and Cons: Is Philadelphia American Right for You?
Choosing any insurance product involves balancing advantages and drawbacks. Philadelphia American's offerings are no different and are an excellent fit for some but not for others.
Advantages:
- Accessibility: The simplified issue underwriting makes it easier for seniors and those with minor to moderate health issues to obtain coverage when they might otherwise be denied.
- Speed and Convenience: The lack of a medical exam leads to a much faster approval process, often taking days instead of weeks.
- Permanent Coverage: The policy remains in force for life, guaranteeing that the benefit will be paid out as long as premiums are paid.
- Predictability: Both the premium amount and the death benefit are fixed and will not change, making future costs easy to plan for.
Disadvantages:
- Higher Relative Cost: The premiums are higher per dollar of death benefit compared to a traditional term life policy. This is the trade-off for the easier underwriting.
- Lower Coverage Limits: The maximum benefit is around $30,000, which is insufficient for income replacement or significant wealth transfer. It is strictly for final expenses.
- Potential for Graded Benefits: Applicants with more serious health conditions may be offered a policy with a graded benefit period (e.g., two years). If death occurs within this period, benefits may be limited to a return of premiums plus interest.
How It Stacks Up: Alternatives in the Market
Philadelphia American is one of many players in the final expense insurance market. It's essential to compare quotes and policy terms from several highly-rated companies before making a decision.
Key competitors include other simplified issue carriers like Mutual of Omaha, Aetna, and Colonial Penn, as well as guaranteed issue carriers like Gerber Life (which accepts everyone but has higher premiums and stricter graded benefits).
When comparing, look at the premium cost for the same benefit amount, the specific health questions asked, the details of any graded benefit clause, and the company's financial rating from the National Association of Insurance Commissioners (NAIC).
Ideal Candidate: Finding the Right Fit
Philadelphia American Life Insurance is best suited for a specific individual:
- Typically seniors between the ages of 60 and 85.
- Those who need coverage specifically for funeral costs and other end-of-life expenses.
- Individuals who have been declined for traditional life insurance due to health concerns but whose conditions are not severe enough to warrant a guaranteed issue policy.
It is not the right fit for:
- Younger individuals seeking large coverage amounts for income replacement or mortgage protection.
- Anyone in excellent health who could qualify for a much less expensive term life policy.
- Those seeking an investment vehicle, the cash value growth is minimal.
Philadelphia American Life Insurance FAQs
Q: What is the phone number for Philadelphia American Life Insurance?
A: The official customer service and claims phone number is (800) 533-1460. Always verify contact information on your policy documents or the company's official website.
Q: What is the A.M. Best rating for Philadelphia American Life Insurance Company?
A: Philadelphia American holds a "B++ (Good)" rating from A.M. Best, indicating a good level of financial strength and claims-paying ability.
Q: How do I file a claim with Philadelphia American Life Insurance?
A: Beneficiaries should contact the company's claims department directly at the phone number listed above. It is recommended to have the policyholder's death certificate and policy number ready. The company will then guide you through their specific process.
