AuguStar Life Insurance Review – Should You Consider This Company?

AuguStar Life Insurance is the rebranded name of Ohio National Life Insurance Company, launched by Constellation Insurance, Inc. in July 2023.

This article reviews the life insurance company, its products, niches, and underwriting.

AuguStar Life is part of Constellation Insurance which in turn is supported by two Canadian firms, CDPQ and Ontario Teachers, two of the largest institutional investors in North America.

As of December 2023:

• Total Assets Under Management: $34.7 billion.
• Revenue: $2.3 billion

As a comparison, New York Life has $700 billion in assets under management. Northwestern Mutual had $31 billion in revenue.

Financial Strength Ratings as of 05/2024:

• AM Best: A (Excellent)
• Fitch: A-
• Moody’s: Baa1

Companies with similar AM Best ratings include Corebridge Financial, Brighthouse, SBLI, Symetra, and Wellabe.

AuguStar Life offers a comprehensive portfolio of life insurance products:

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

Three term life insurance products are available:

• Flex Term Basic
  • Least expensive
  • Term lengths – 10, 15 and 20-year terms
  • Limited conversion period from 2-5 years
  • Limited riders
• Flex Term Plus
  • Term lengths – 10, 15 and 20-year terms
  • Conversion period from 8-15 years
• Recap Term
  • Designed for those planning to convert to permanent insurance later.
  • Recapture term premiums when you convert
  • Term lengths – 10, 15 and 20-year terms
  • Conversion period available for first 10 years
  • Cumulative conversion credit for years 2-5
  • Annual conversion credit for years 6-10

Conversion credits equal to some or all of the term premium you paid are credited towards the new universal life or whole life insurance policy.

Term lengths are limited with AuguStar vs competitors like Banner Life and Protective Life that offer longer 30 to 40-year terms.

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.

If you want permanent insurance, AuguStar offers several universal life insurance policies.

The Virtus IUL II allows you to accumulate cash values, with the rate of interest credited to the policy based on an index or a fixed interest account.

The Virtus Protect IUL offers strong no-lapse guaranteed death benefits and a choice of index interest accounts.

Virtus IUL II and Virtus Protect IUL offer several riders to help you further customize your policy.

Additional Insured Rider – Offers term insurance up to four times the base policy on someone else.

Children’s Term Rider – Provides term insurance for your children. Coverage amounts range from $1,000 – $25,000. The coverage is convertible to permanent insurance when the child reaches age 18, but strangely the underwriting rate class offered is a standard smoker rate.

Waiver of Premium Rider – Pays a stipulated amount upon total disability.

Guaranteed Purchase Option Rider – Guarantees the right to buy more permanent insurance without having to go through medical underwriting. It’s a nice option to have as we get this question all the time from clients.

Overloan Protection Rider – Prevents policy from lapsing when you have an outstanding loan. If you are buying a policy to build up a cash value that you will access in retirement via policy loans, you need to add overloan protection to prevent your policy from lapsing.

Accelerated Benefit Rider – Accelerates a portion of the death benefit for chronic or terminal illness. While it is not long-term care insurance, proceeds may be used for that purpose.

The amount available to access and the reason whether chronic or terminal illness varies greatly from company to company. For example, some companies consider terminal illness as having 12 months or less to live, while other companies use 24 months.

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

The Prestige Indexed Whole Life Insurance product offered by AuguStar is unique as not many companies offer this type of whole life insurance.

• Prestige Index Whole Life Highlights:
  • Minimum Face – $100,000
  • Issue Ages – 0-75
  • Level Death Benefit
• Index Interest Accounts
  • S&P 500
  • Russell 2000
  • EuroStoxx 50
• Riders:
  • Accelerated Benefits
  • Children’s Term
  • Guaranteed Purchase Option
  • Overloan Protection
  • Waiver of Premium

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.

You have questions about AugusStar Life, and we have the answers.

When the company was still Ohio National, they burned their bridge with a lot of the independent agents who distributed their products.

They don’t have a lot to offer that you can’t find at another life insurance company that is bigger, better, and financially stronger.

Take a few minutes to submit your quote request today and we’ll provide you with comparisons.