Jackson National Insurance Company Review
Jackson National or simply Jackson has become one of the largest providers of annuities and life insurance in recent years. The firm is relatively new and unlike most of the big old line insurance companies it is unknown to most people. Although Jackson may be less known, most are familiar with its parent company – Prudential.
Jackson National Life Insurance Company is actually one of the newest large players in the American insurance business. It has only been around for about fifty years, since 1961. The Jackson started as a small regional family owned insurance company but has since grown into a major provider of life insurance and annuities.
Jackson, which is named for controversial 19th Century US President Andrew Jackson, started in Lansing, Michigan. The company grew to prominence as a pioneer of universal and flexible life insurance. By 1998, it started operating in all fifty states by forming a subsidiary of the same name to operate in New York to get around that state's laws. Since 1995 Jackson has been heavily involved in providing financing to business as well as insurance.
Jackson Annuities
The Jacksons sells a wider range of annuities than most American insurers. Currently it divides its products into variable, fixed indexed, and fixed categories. Full details about all of these are provided at Jackson's website. A useful feature on the site is "At A Glance", which lets visitors to compare all of the plans in one category.
Jackson's variable products, which are called Perspective, appear to be immediate or split annuities that require an initial lump-sum investment and are available as both qualified and unqualified plans. The nonqualified plans may require a slightly higher initial investment. The charges on the plans are fairly low but two of them have a high withdrawal fee of 20%. These are fairly good plans that offer 10 or 11 living benefit choices.
Jackson's fixed annuity products are divided into families or groups of plans. One of these families, the Bonus Max, comes with an excess income adjustment charge. Two of them, Bonus Max and Action, offer optional annuitization charges. The third, the Max, family does not. Every fixed plan from Jackson offers a guaranteed interest rate option and pre-selected death options.
Jackson's fixed index plans appears to be very flexible but the investment options are limited. Only the S&P 500 and multi-strategy indexes are available. One of them, the Select Annual Reset, comes with a select annual reset point to point crediting method, while another, the Elite Annual Reset, features annual reset crediting with monthly averaging. Only the Ascender Plus gives buyers a choice of crediting methods. The price for indexed plans has an initial premium of $10,000 non-qualified and $5,000 qualified.
Life Insurance from Jackson
Jackson concentrates its insurance efforts on universal life insurance, which was the basis of the company's success. Most of the policies listed on the company's website appear to be variable universal products.
All of them have fixed accounts with a 3% minimum return and the ability to take out zero net cost loans after five years. Cash handling fees are charged with the loans. Investment strategies are adjusted for the policy holder's risk tolerance. The minimum death benefit is $100,000. The options here are limited but Jackson does offer policies to individuals up to 90 years in age. All of the policies come with a choice of three death and terminal illness benefits.
Jackson's range of life insurance products is actually somewhat limited. Yet the flexibility of these policies and the amount of benefits available is impressive.
Retirement Planning from Jackson
There is a retirement planning feature on Jackson's website but the only products available there are life insurance and annuities. Despite its rhetoric about being a retirement services organization, it is still an insurance company.
Jackson might be a good place to buy annuities but it would be a poor place to return for retirement planning. Other companies offer far more choices and options.
Jackson Ratings
Despite its short history Jackson has managed to maintain fairly good financial strength ratings from the four major financial analysis firms.
Moody's gave it an A1 or good rating. This means that Moody's investors consider the insurer financially secure but think it could face some long term risks.
Standard & Poor's or S&P gave Jackson National an AA grade. This means S&P's analysts view the insurer as financial strong and able to whether unfavorable market conditions without being at risk of not meeting its obligations.
Fitch also gave Jackson an AA rating. The AA grade means that Fitch's experts do not believe Jackson is vulnerable to market conditions. They do believe there is room for improvement in the company's financial strength.
A.M. Best graded Jackson A+ or superior. This means that Best's reviewers felt that the company will have no problems meeting its insurance obligations. It also indicates that Best's experts found no financial weaknesses at Jackson.
It should be noted that there are some inconsistencies in these ratings. Reviewers at three of the four major firms saw Jackson as somewhat weaker than those of AM Best. These findings could be based on Jackson's business financing operations, which could expose the company to losses caused by future economic downturns.
The relationship between Jackson National and the Prudential is also unclear. Prudential could have taken on some liabilities and risks when it absorbed some of the divisions of AIG – the insurance giant that collapsed in 2008. This relationship could account for the inconsistencies in the financial analysis.