AuguStar Life Insurance Review – Should You Consider This Company?

In July of 2023, Constellation Insurance, Inc. announced the rebranding of its Ohio National life insurance business as AuguStar Life.

According to the company, the AuguStar name signifies:

“The organization’s commitment to guiding you toward a brighter financial future while paying homage to our parent company, Constellation
Insurance.”

Ohio National made some poor business decisions over the past 5-10 years that ultimately led to

AuguStar Life is part of the Constellation Insurance. Constellation’s investors and equal partners are two Canadian firms, CDPQ and Ontario Teachers.

As of December 2022, the total assets under management were approximately $34.7 billion.

As a comparison, assets under management with New York Life are approximately $700 Billion.

Revenue was $2.11 billion in 2022, compared to $31 billion for Northwestern Mutual.

Financial Strength Ratings as Follows as of 08/2023:

AM Best Rating – “A”

Other companies with “A” ratings from AM Best include Corebridge Financial, Brighthouse, SBLI, Symetra, and Wellabe.

Fitch Rating – “A-“

Other companies with an “A-” rating from Fitch include:

Moody’s Rating – Baa1

None of the other companies we offer have this low rating for Moody’s.

AuguStar Life offers:

• Indexed Universal Life
• Indexed Whole Life
• Term Life
• Universal Life
• Whole Life

Term life insurance is available in 10, 15, and 20-year term lengths to meet your needs.

Banner Life and Protective Life are your best bet if you need longer-term lengths between 30 and 40 years.

Term life products available with AuguStar include the FlexTerm Basic and the FlexTerm Plus products.

The FlexTerm Plus product offers better conversion options should you decide to convert your policy later to a universal or whole-life policy.

FlexTerm Plus conversion is available for the level term period or until the insured turns 70, whichever comes first.

While many companies have eliminated conversion credits, AuguStar will give you a credit equal to one annual term base insurance premium.

AuguStar offers the Recap Term 10-year policy for people who plan to convert their policy to permanent life insurance.

A unique feature of this policy is that all premiums you pay during the first five years become conversion credits towards the new policy when you convert.

Another term policy available is the YRT Plus II.

The YRT Plus II is an annually renewable term life insurance policy that may be renewed for up to 10 years.

The premium you pay each year will increase.

The following riders may be available if you qualify:

• Accelerated Death Benefit
• Accidental Death Benefit
• Family Term Rider (Term Plus product)
• Guaranteed Purchase Option (Term Plus product)
• Waiver of Premium

It’s always best to request an illustration of these products to compare them to other companies you may consider.

The Virtus IUL Index life insurance is available with AuguStar.

This type of policy offers the ability to accumulate cash values, with the rate of interest credited to the policy based on an index related to one of four indexes and a fixed-interest account.

This policy offers a no-lapse guaranteed death benefit for up to 20 years, depending on your age when the policy was issued.

• Age 0-60 – Offers a 20-year guarantee
• 61-69 – Guarantee to age 80
• 70-75 – Ten-year guarantee
• 76-80 – Guaranteed until age 85

Living benefits riders are available.

The riders seem to be for chronic illness but not necessarily long-term care insurance riders like the MoneyGuard Fixed Advantage, Asset Care, or CareMatters II policies available with competitors.

An overloan protection rider is available if you take policy loans later. The overloan rider keeps the policy from lapsing, triggering a potentially negative tax situation.

Starting in year 11, your cash values are credited with an additional 0.3 basis points on top of the index interest credited.

Companies to compare products include John Hancock, Lincoln National, and Pacific Life.

Indexed whole life insurance is not an ordinary product, with AuguStar being one of the few companies that offers this type of policy.

Crediting options available include:

• Capped S&P 500 index
• Uncapped S&P 500 index
• Russell 2000 Index
• Dow Jones EuroStoxx
• Fixed Interest Account

Starting in year 11, your policy account value is credited with an additional 20 basis points.

Optional riders include:

• Accelerated Benefit Rider
• Children’s Term Rider
• Guaranteed Purchase Option
• Overloan Protection Rider
• Single Premium Rider

Whenever you look at a whole life insurance policy, make sure you also visit the leaders for whole life insurance policies, namely Guardian, Mass Mutual, and Penn Mutual.

The V-Pro Universal Life Insurance policy by AuguStar Life offers the potential to accumulate cash values.

Highlights include:

• No-lapse guarantee death benefits up to 20 years, depending on age at the time of policy issue.
• Starting in year 11, an additional 75 basis points are credited to the policy value.

Riders available with this policy include:

• Accelerated Death Benefit (Lifetime Advantage Rider)
• Additional Insured Term Rider
• Children’s Term Rider
• Guaranteed Purchase Option
• Preferred Loan Rider
• Waiver of Premium Rider

There are many companies available that offer similar types of policies.

AuguStar offers three variations of its whole life insurance policy.

• Prestige Protector
• Prestige 10 Pay 3
• Prestige Max 4

These are dividend-paying policies.

Prestige Whole Life products include:

• 10 Pay – Offers a 10-year payment structure
• Max 4 – Offers a paid-up at age 65 policy.
• Protector – Premiums are paid to age 100 with this policy.

Several riders are available:

• Children’s Term Rider
• Guaranteed Purchase Option Rider
• Paid-Up Additions Rider
• Waiver of Premium

I’m not sure what to say yet here.

When the company was Ohio National, an independent agent distributed their products.

Many of those agents were alienated by Ohio National when the company decided to cancel commissions for already earned business.

It is unknown how competitive the company will be going forward. However, if its term life insurance rates are competitive again, it may be worth a look.

I would want to be with a stronger and better-rated company for universal or whole life insurance if I bought one of those policies.