In this article, you will learn about Ohio National’s Basic Term policy. This review will cover the pros and cons of their Basic Term plan and provide sample rates. You might want to read our review of Ohio National Life in an article by clicking here.
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Keep in mind, our quote engine wont show rates for Ohio National. We use three quote engines, but the one we chose for this site doesn’t include Ohio National and a few other leading term carriers such as Midland National, Lincoln Financial, and Pacific Life. We will gladly provide you with comparison quotes including all the top companies, so please contact us.
What’s the difference between the Basic and the Expanded (Plus) Life Policies?
Some people get confused when they see quotes showing two Ohio National term policies with very similar rates. What’s the difference? There is only one difference between Ohio National’s Basic and Expanded (also known as Plus) policies. The difference is the conversion option.
The Basic policy allows conversion to just one policy — their Virtus UL — which isn’t one of their better performing permanent policies. The Expanded Plus policies allow conversion to any permanent product available at conversion. That’s the only difference between the term policies and accounts for the slight difference in premium. Because the Basic policy has a limited conversion option, the premium is lower.
How Important is Conversion?
Some people purchase a term policy with the plan to convert it to a permanent policy at some point in the future. They may want a whole life policy or a guaranteed universal life policy, but they simply cannot afford the higher premium. So, a term policy is purchased with the intention of converting it to permanent when their financial situation improves.
By purchasing a term policy, the necessary life insurance protection is in place. You lock-in your insurability, so if you decide to convert to a permanent policy several years later, but develop a serious health conditions in the meantime, the conversion is automatic. You don’t have to worry about medical underwriting or qualifying for the new policy.
This is one of the main reasons why conversion is important. Most people buy term insurance with no intention of converting it to permanent. However, sometimes needs and desires change later in life. Let’s look at an example…
An Example Showing the Importance of Term Conversion
Let’s say you are a healthy 35 year old and purchase a 20-year $1 million term policy at the Preferred Best rate class. At the age of 53, two years before your term policy is due to expire, you are diagnosed with a very serious health condition. You realize your life expectancy is now much shorter and you feel like your spouse (and maybe your dependents) won’t be financially secure if you die after age 55 with no life insurance, but before the age of 70.
If your term policy has a good conversion option, then you can convert (switch) to the permanent policy and keep the Preferred Best rate classification even though your health would normally make you uninsurable. The rates would be much higher because permanent life insurance is more expensive, and your rate would be based on your attained age. However, this could be a very smart financial move. If your policy had no (or limited) conversion privileges, then you could be in a very difficult position.
Keep in mind, if your health were to become a serious issue, you would likely spend a lot more money on healthcare. Also, your earning capacity could be greatly diminished. These are just some things to consider.
Conversion Privileges Vary Widely Among Term Life Insurance Companies and Products
Some term policies only allow conversion during the first 5 or 10 years. Other policies have very limited conversion options. A few companies allow you to convert to any of their permanent products. Ohio National gives you the option to choose their Basic policy with the limited conversion or their Expanded policy with excellent conversion options.
Again, this is an important consideration that might not seem so important at the time of purchase. We still have many clients who choose the Basic plan for various reasons. They may have decided to “ladder” their life insurance, so one of their policies is convertible. We wrote an article on laddering you can read here.
Some folks have one permanent policy in additional to their term insurance, such as a GUL, just in case their situation changes due to unforeseen circumstances. Perhaps a child becomes a lifetime dependent due to health. A major financial setback could happen due to numerous reasons.
Ohio National Term Basic Review – Sample Rates
The rates shown below are for Preferred and Preferred Best (Ohio National calls their best class “Super Preferred”). Keep in mind, the sample rates shown might not be current. Rates can fluctuate on a daily basis. For the most accurate, up-to-date rates, please contact us for a quote.
Ohio National isn’t just known for their competitive Preferred and Super Preferred rates. They also have industry-leading rates (for many ages and face amounts) for the Standard Non-smoker classification. Their Preferred Smoker rates are also usually among the lowest. However, their Standard Smoker (tobacco) rate class is not very competitive.
In every quote, Ohio National was among the lowest 4 carriers. In most cases, they were the lowest or second lowest.
The Asterisk * means their rate was the lowest or second lowest out of ALL the companies.
|Male Face Amount||500,000||$750,000||$1,000,000||$1,500,000|
|20-Year Term Rates for 35 year old – Preferred Rate||*$28.98||
|20-Year Term Rates for 35 year old – Preferred Best Rate||$22.06||*$29.84||$37.63||*$52.77|
|Female Face Amount||$500,000||$750,000||$1,000,000||$1,500,000|
|20-Year Term Rates for 35 year old – Preferred Rate||*$25.09||*$34.38||*$43.68||$61.85|
|20-Year Term Rates for 35 year old – Preferred Best Rate||*$19.03||*$25.30||*$31.57||*$43.68|
|Male Face Amount||$500,000||$750,000||$1,000,000||$1,500,000|
|20-Year Term Rates for 50 year old – Preferred Rate||$93.42||*$136.89||$176.89||$261.66|
|20-Year Term Rates for 50 year old – Preferred Best Rate||*$77.42||*$112.88||*$146.42||$216.25|
|Female Face Amount||$500,000||$750,000||$1,000,000||$1,500,000|
|20-Year Term Rates for 50 year old – Preferred Rate||$69.63||*101.21||$130.18||*$191.60|
|20-Year Term Rates for 50 year old – Preferred Best Rate||*$56.66||*$81.74||*$105.96||*$155.27|
Ohio National Term Basic Review — the Pros and Cons
This is really quite simple (or basic) and the pros and cons of Ohio National’s Basic policy can be summarized very succinctly below:
- Industry-leading, low rates
- Highly rated carrier
- Lack of good conversion options
- Product is only offered in 10, 15, and 20 year term.
Summary of Ohio National’s Basic Policy
One of the reasons Ohio National’s Basic policy is so low-cost is because of the convertibility factor. As explained above, many people are content with a plan that has limited conversion options. If conversion is important to you, then Ohio National’s Expanded “Plus” term policies would be worth the extra cost.
We will be glad to explain to you how conversion works with the other low-cost term carriers. Ohio National is oftentimes an excellent choice due to their very high financial ratings and their very low rates. Please contact us if you have any questions about life insurance or obtaining comparison quotes.