Forethought Life Insurance Review

Preneed and universal index life insurance with lots of options

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Global Atlantic

Global Atlantic

Our Take

Forethought offers preneed life insurance to cover your final expenses and several different universal index life insurance plans that you can get through an insurance professional. Forethought is a great option if you want guaranteed whole life coverage for funeral expenses or an indexed policy that gives you several options to invest for your estate planning and retirement needs.  

  • Pros and Cons
  • Key Takeaways
  • Specifications
Pros and Cons
Pros
  • Offers many different universal life options

  • Offers a rider that includes a level death benefit

  • Offers annuities as a complement to retirement planning options

  • Offers a loan protection rider

  • Provides online resources for funeral planning

Cons
  • Does not offer term, whole, or universal coverage

  • Preneed coverage isn’t as flexible as final expense coverage

  • Coverage minimums and maximums are not listed

  • Universal index coverage might be too complex for your needs

  • Universal income life insurance might require a medical exam

Key Takeaways
  • Forethought provides preneed insurance and customizable universal index life insurance via insurance professionals like brokers or independent agents. 
  • The company offers a robust selection of riders to add to your coverage, including an accelerated access rider, an overloan protection rider, and a return of premium rider.
  • Forethought only offers retirement and financial planning products and insurance, so you will need to find another insurer for property and casualty insurance like home and auto. 
Specifications
  • Year Founded 1985
  • Kinds of Plans Preneed, universal index
  • Number of Plans 4
  • Payment Options Mail, online, phone, automated payment, credit card
  • Official Website www.globalatlantic.com/life-insurance

Introduction

Forethought is a life insurance, annuities, and reinsurance company that offers preneed life insurance through partnerships with funeral homes and universal index life insurance policies through insurance professionals like brokers and independent insurance agents. Its preneed coverage is guaranteed issue whereas the universal index life insurance is fully underwritten and might require a medical exam. 

We reviewed Forethought’s policy offerings, riders, pricing, customer service, industry ratings, and more to help you decide if its policies are right for you.  

Company Overview

Forethought is headquartered in Batesville, Indiana. It was acquired by Global Atlantic Financial Group and now mostly operates under that name. In February 2021, Global Atlantic was purchased by KKR & Co. Inc, a New York-based financial services firm. Global Atlantic also owns Allmerica Life and the U.S. arm of Aviva PLC. Global Atlantic deals in annuities, life insurance, and reinsurance. Its life policies are sold through insurance professionals and it is rated A- by AM Best for financial strength. 

Forethought is licensed to do business in all states except New York, but not all policies or policy options are available in every state. 

Available Plans

Forethought offers universal index life insurance plans and preneed insurance plans. 

Universal Index Life Insurance

Three different types of universal index life insurance are offered by Forethought.

Lifetime Foundation ELITE Indexed Universal Life 

This policy offers the flexibility of a universal index life insurance policy with an affordable long-term death benefit. It provides premium flexibility but requires that you pay a minimum premium (that varies depending on your situation) to keep the death benefit guarantee in effect. With this policy, the death benefit is guaranteed up until the age of 90 or for 40 years, whichever is earlier. 

After the guaranteed period ends, the cash value of the policy extends the life of the policy until the age of 121. Forethought offers seven options crediting the interest on your policy tied to popular financial indexes, allowing you to customize your policy to best fit your goals and your risk tolerance. While many universal index policies guarantee that you will never lose money, this policy guarantees that the amount of interest you earn on an annual basis will never be less than 2%. 

Lifetime Builder ELITE Indexed Universal Life

This policy allows you three choices for your death benefit:

  • A level death benefit, where the death benefit stays the same throughout the life of your policy.
  • An increasing death benefit, where the death benefit increases each year. 
  • A return of premium death benefit, where the death benefit will include additional funds equal to how much you have paid in premiums toward the policy throughout its life. 

With this policy, you can index your policy’s growth to major financial indexes such as the S&P 500. This policy also allows you to make policy withdrawals and loans and provides you with a guarantee of your account value. 

In the fifth year of your policy, it will start crediting you with an additional 1% of interest every year. It will also guarantee you 2% interest on your cash value with no downside. 

Global Accumulator

This policy links your account’s interest to popular indexes via five indexed crediting strategies and one fixed-term strategy. Forethought guarantees that you will never earn less than 2% in interest on your cash value. 

You get two options for boosting your account’s cash value after you have owned the account for a while. The first is the SMART Buy-Up Secure strategy, which allows you to add an extra percentage of indexed interest credits starting in the policy’s sixth year. The second is the SMART Buy-Up Performance strategy, which provides you with an add-on of a percentage of index performance directly to the account’s value. This is based on a percentage of the indexed interest credits once your account achieves a stated funded percentage of the policy’s face amount. 

Both allow your account to grow faster once these options kick in, as they increase the amount of interest your account can receive based on how well the index performs. The Performance option costs more but gives you a higher additional return if the index performs well. 

Forethought guarantees 2% interest on the cash value portion of its universal index life insurance. Other insurers only offer a guarantee that you won’t lose money if the index goes down. A guaranteed return on your life insurance cash value gives you more certainty around your investments.

Preneed Life Insurance

Preneed life insurance is a type of whole life insurance that you purchase to pay for the costs of a funeral. While it’s similar to final expense insurance in that it’s purchased primarily to pay for your funeral, it is different because it is linked to a specific funeral provider and is used specifically to cover funeral expenses like burials, cremations, and memorial services. This allows people to plan their funerals in advance and save their families from having to do it upon their passing. 

Forethought’s preneed policy provides coverage that you assign to a funeral services provider based on the cost of your funeral. The company does not list a maximum or minimum coverage amount online.

Preneed insurance is a good choice for those who want to make their funeral planning easy and seamless for their family.

Available Riders

Forethought offers many life insurance policy riders that are available for purchase for additional coverage including: 

  • Accelerated access rider. With this rider, you can get access to your death benefit if you develop a chronic or critical illness. 
  • Terminal illness accelerated death benefit rider. With this rider, you can access a portion of your death benefit if you get diagnosed with a terminal illness. 
  • Wellness for life rider. This rider rewards you if you practice healthy habits by giving you a discount on your coverage. You can get these discounts by getting regular medical exams from your doctor and staying within a healthy weight range. 
  • Child life insurance rider. This rider allows you to purchase coverage for your children between the ages of 15 days and 17 years. The base amount of term coverage purchased covers your children until age 25. At any point, the coverage can be converted to a permanent insurance policy that is worth up to five times the rider’s face value. 
  • Spouse life insurance rider. This rider allows you to purchase a fixed amount of coverage for a spouse. 
  • Accidental death benefit rider. This rider will provide your family an additional death benefit amount if you die from an accident. 
  • Waiver of premium rider. This rider helps protect your policy if you become disabled and cannot pay your policy premiums. 
  • Loan protection rider. This rider helps ensure that you don’t lapse on your policy if you borrow from it via a loan. 

Riders can be added only to Forethought’s universal index policies and they are not available in all states. For prices, you will need to contact the company for more details. 

Customer Service: Good Phone, Email, Fax, Mail, and Online Options

Forethought has different numbers for claims (1-877-462-8992) and customer service (1-877-462-8992). Its call center hours of operations aren’t listed online for its life insurance products, but the operating hours of its annuity hotline are from 8:30 a.m. to 6 p.m. ET Monday through Friday. 

You can also contact the company via email at askcustomerservice@gafg.com, by fax at 1-800-262-6976, by mail, or through your online account.

Customer Satisfaction: Fewer Complaints Than Average 

The National Association of Insurance Commissioners (NAIC) rates insurance companies based on the number of customer complaints they receive in relation to their market share. A company that gets an average number of complaints would be scored as 1.0. A company that has more complaints than average would be scored a number over 1.0. A company that has fewer complaints than average would be scored below 1.0.

Forethought has an NAIC complaint index of 0.09, which means that it gets fewer complaints than average. In total, it receives 0.035% of the national complaints per market share. Many of the complaints received were for processing delays and billing errors. 

Financial Strength: A- (Excellent)

AM Best is a consumer rating agency that analyzes a company’s financial strength by looking at factors including the company’s balance sheet, forward-looking statements, performance, and investments. This helps customers understand how likely that company is to meet its financial obligations in the future. 

Forethought has an A- (Excellent) rating from AM Best. 

Cancellation Policy: Must Give Written Notice to Cancel

Forethought does not list the length of its free look period on its website; however, life insurance companies typically have a free look period of between 10 days and 30 days during which you can cancel your policy without any penalties, fees, and with a full refund. 

Forethought’s normal cancellation policies after the free look period require 30 days' written notice. 

Whether there are penalties attached to your policy termination will depend on whether your policy has commissions that exceed $300 in a calendar year. If they do, the commissions are due immediately upon termination. If they don’t, most policies will not require cancelation fees or penalties. Be sure to read the fine print of your policy before purchasing it. 

And if you have a permanent life insurance policy that has accumulated cash value, Forethought will also need to calculate how much the surrender value of your policy amounts to so that they can pay it out. Forethought charges a surrender charge if more than 20% of the account value is taken out in a single year. These charges only apply during the policy’s first 15 years. 

Price of Forethought Life Insurance: Complicated Fee Structure

What you will pay for a life insurance policy through Forethought will vary significantly depending on if you are purchasing a preneed policy or a universal index policy. The company does not list the prices of the preneed policies online, but it does list some of the charges for the universal index policies.  

Forethought charges various policy fees on its universal index accounts including:

  • A 10% premium charge on your premium payments before they are applied to your account
  • An expense charge during the first 15 years of your policy based on your age, issue amount, gender, and underwriting class
  • A cost of insurance charge based on your age, gender, issue amount, underwriting class, and policy year
  • A monthly policy charge, which costs $6 every month until age 121
  • Any applicable rider charges

How Forethought Compares to Other Life Insurance

Although Forethought offers preneed insurance, something that most of its competitors do not offer, there might be other companies like Allianz that are a better choice for universal index life insurance. 

Forethought vs. Allianz 

Forethought and Allianz are insurance companies offering complex universal life insurance policies that give you significant amounts of choice around customizing your coverage. They both allow you to make changes to your coverage over your life to ensure that your coverage grows with you. Both also have relatively high AM Best ratings and a very low number of consumer complaints, although Forethought has fewer. 

Some key differences between Allianz and Forethought include the following:  

  • Allianz offers up to $65M in life insurance coverage.
  • Allianz offers many unique riders, including ones that protect your family and business partners, and riders designed to lock in your policy’s costs in case of future increases. 
  • Forethought offers preneed insurance, which is a highly specialized and rare form of insurance.
  • Forethought offers options to buy add-ons that increase your cash value’s indexed return.
  Forethought Allianz 
Types of plans Preneed, universal index Fixed universal index
Customer service  Phone, fax, online, email  Phone, email, mail, fax 
NAIC complaint index  0.09  0.33 
Optional riders available  Yes  Yes
AM Best rating  A-  A+ 
Final Verdict

Forethought is a company that offers several different insurance and investment products including a great selection of universal index life insurance with a considerable choice of riders and policy indexing options. The 2% interest guarantee is better than many of its competitors who only guarantee that you will not lose money in your account value. 

The company also offers a unique preneed insurance policy that allows you to plan your funeral in advance to make it easier for your family to manage your final expenses. However, the company doesn’t offer any term or whole life coverage options for people who might want simpler life insurance solutions. 

Forethought is a great choice for people who are looking to buy insurance as an investment or estate planning vehicle that also has a death benefit to protect their family.

Methodology

All of our reviews of life insurance companies are based on extensive research and analysis of each company’s offerings, customer service, financial stability, cost, and more. For each company, we compared the life insurance products offered, as well as available features and reported customer experiences. Visit our life insurance review methodology for the full breakdown of what we evaluated for over two dozen companies.