Freedom Life Insurance Company of America is a Fort Worth, Texas insurer and a wholly owned subsidiary of USHEALTH Group, Inc. Despite the word “Life” in its name, the company is best known for underwriting individual health coverage, with a smaller catalog of supplemental and life insurance products layered alongside it. If you were handed a Freedom Life policy by a USHEALTH agent, odds are strong that what you bought is primarily a health or fixed-benefit plan, not a traditional term life contract.
Who Owns Freedom Life and Who Pays Your Claim
Freedom Life sits under the USHEALTH Group umbrella alongside two sister carriers, National Foundation Life Insurance Company and Enterprise Life Insurance Company. USHEALTH Group handles the marketing and administration of the plans. The underlying policy is issued by one of the carriers, and Freedom Life is the issuing carrier for many of them.
That split is worth understanding before you buy. The agent you speak with and the brand on the brochure is USHEALTH. The contractual obligation to pay your claim belongs to Freedom Life (or whichever sister company issued your particular policy). When you file a claim, you’re filing against the carrier named on the policy, not against the marketing company.
Financial Strength Rating
AM Best, the primary credit-rating agency for the insurance industry, has assigned Freedom Life Insurance Company of America a financial strength rating of B+ (Good). AM Best’s scale runs from A++ (Superior) down to F (In Liquidation), so B+ sits in the middle tier. The rating reflects the company’s assessed ability to meet ongoing policy obligations.
Ratings move over time. Before you commit to a policy, pull the current rating directly from AM Best’s website or ask the agent to show it to you in writing. The rating matters most for long-dated promises like life insurance, where you may be relying on the insurer to pay a claim decades after you sign the application.
What Freedom Life Actually Sells
The product lineup is health-heavy. Plans branded Premier Advantage, Premier Choice, Secure Advantage, and Health Access Plus sit on the health side, alongside supplemental products including Med Guard, Accident Protector, Income Protector, Life Protector, Secure Dental, and Premier Vision. Life Protector is the one carrying an actual life insurance benefit; the rest are health or ancillary coverage.
Two practical consequences follow from that mix.
First, if you’re specifically shopping for a traditional term life policy with a large death benefit and a 20- or 30-year level premium, Freedom Life may not be the natural fit. The company’s center of gravity is individual health coverage for people without employer-sponsored insurance.
Second, some of the health plans in the catalog are limited-benefit products rather than comprehensive major medical insurance. A fixed-benefit plan pays a set dollar amount for specific services. It might pay $1,500 per day for a hospital stay regardless of whether the actual charge is $3,000 or $10,000. Premiums are lower because the insurer’s exposure is capped, but a serious medical event can leave you owing a large balance. Read the schedule of benefits before you assume a plan behaves like major medical coverage.
Supplemental Products
Supplemental plans like Accident Protector and Income Protector pay benefits when a narrowly defined event occurs. An accident plan might pay a lump sum or scheduled payments after a covered injury. An income protector plan pays a portion of your earnings if you become disabled and can’t work. These are designed to sit on top of other coverage rather than replace it, and the triggering event and payout amount are defined precisely in the policy schedule.
The Life Insurance Products
Policies like Life Protector pay a death benefit if the insured dies while the policy is in force. Some are structured as term coverage, meaning they run for a defined period and pay only if death occurs within that window. Term premiums are lower than permanent life insurance because there is no cash value component. When the term ends, you may be able to renew at a higher premium or, if the policy includes a conversion privilege, switch to a permanent plan without new medical underwriting.
Accidental death benefit coverage is also available. These policies are inexpensive but narrow: they pay only if death results from a qualifying accident. Death from natural causes produces no benefit.
Graded benefit plans are aimed at applicants who can’t qualify for standard coverage because of health conditions. They typically pay a reduced benefit during the first two or three years, then step up to the full face amount. If the insured dies of natural causes during that initial window, the payout may be nothing more than a return of the premiums paid.
Policy Provisions You Should Know Before Signing
The Two-Year Contestability Window
Nearly every life insurance policy sold in the United States includes an incontestability clause. After the policy has been in force for two years, the insurer generally cannot void the contract based on errors or omissions in the original application. The major exception is outright fraud, which many states allow insurers to raise even after the two-year mark.
During those first two years, expect any claim to receive closer scrutiny and the application to be re-examined. After two years, the policy becomes considerably harder to contest.
Grace Period and Reinstatement
A missed premium doesn’t end coverage immediately. Policies include a grace period of at least 30 days during which you can make the overdue payment and keep the policy in force. If the insured dies during the grace period, the insurer still owes the death benefit, with the unpaid premium deducted from the payout. Some states require grace periods longer than 30 days.
A policy that lapses after the grace period isn’t necessarily gone for good. Most contracts allow reinstatement within a set window, commonly one to five years. Reinstatement typically requires a written application, payment of all overdue premiums plus interest, and evidence that you’re still in good health. That last requirement is the catch. If your health has changed, the insurer can refuse to put the policy back in force.
Beneficiary Designations
You name the beneficiary when you apply, and you can generally change the designation at any time by submitting a new form. You can name one person, split the benefit among several, or name a trust. Insurers pay based on the most recent form on file, which is why divorces and remarriages so often produce the wrong payout. Updating the designation after any major life change is one of the simplest tasks in owning a policy and one of the most frequently neglected.
Beneficiaries can usually choose how the money is paid out. A lump sum is standard. Some policies offer structured payments or a retained asset account, where the insurer holds the funds and the beneficiary draws against them. Retained asset accounts earn interest, that interest is taxable, and the funds are not insured by the FDIC. They’re backed by the insurer’s financial strength and state guaranty association protections rather than by federal deposit insurance.1FDIC. Retained Asset Accounts and FDIC Deposit Insurance
How the Death Benefit Is Taxed
Life insurance death benefits paid to a named beneficiary are generally excluded from federal gross income under 26 U.S.C. ยง 101.2Office of the Law Revision Counsel. 26 USC 101 – Certain Death Benefits A $250,000 benefit arrives tax-free in most cases.
Interest earned on the proceeds after the insured’s death is a separate matter and is taxable. If the insurer holds the money in a retained asset account and credits interest, that interest is reportable income even though the underlying benefit was not.3Internal Revenue Service. Life Insurance and Disability Insurance Proceeds
Protections If Something Goes Wrong
State Regulation and the Free-Look Period
Life insurance is regulated primarily at the state level. Each state’s insurance department reviews and approves policy forms, monitors insurer solvency, and handles consumer complaints. Freedom Life’s policies must pass that review before they can be sold in a given state.
Most states also give new policyholders a free-look period after the policy documents arrive. The window commonly runs 10 to 30 days depending on the state and product type, and during it you can cancel for a full refund if the coverage isn’t what you expected.4National Association of Insurance Commissioners. Life Insurance Disclosure Model Regulation Insurance contracts are dense and hard to evaluate before purchase. Use every day of the window.
What the Insurer Can Pull About You
When Freedom Life underwrites your application, it may pull consumer reports including credit history, prescription drug records, and data from the Medical Information Bureau, a database that tracks prior insurance applications and disclosed medical conditions.5Consumer Financial Protection Bureau. MIB, Inc. Under the Fair Credit Reporting Act, if the insurer takes an adverse action based on information in a consumer report, such as denying your application or charging a higher premium, it has to notify you, identify the reporting agency, and tell you about your right to dispute inaccuracies and obtain a free copy of the report within 60 days.6Federal Trade Commission. Consumer Reports – What Insurers Need to Know
Guaranty Association Backstop
If Freedom Life ever became insolvent, state guaranty associations step in to continue coverage or pay claims. For life insurance death benefits, the standard coverage limit is $300,000 per individual in the majority of states. A handful of states, including California, Florida, Connecticut, New Jersey, New York, Utah, and Washington, provide a $500,000 limit.7NOLHGA. The Nation’s Safety Net Any amount above your state’s guaranty limit is not protected if the insurer fails, which is a second reason the financial strength rating matters.
Filing a Claim
When the insured dies, the beneficiary notifies Freedom Life and submits a claim form, typically available on the insurer’s website or through customer service. A certified copy of the death certificate goes with it. Depending on the circumstances, the insurer may also ask for proof of the beneficiary’s identity, medical records, or a police report.
Accuracy on the form matters more than speed. A mismatched Social Security number or a name that doesn’t match the policy records can hold up payment. If the insured died within the first two years, expect the insurer to review the original application carefully under the contestability provisions.
State laws set a deadline for insurers to process and pay claims after receiving complete documentation, generally between 30 and 60 days. Some states charge interest on late payments. If the insurer needs more time because of an investigation or missing paperwork, it must usually notify the beneficiary in writing and explain the delay.
Common Exclusions
Freedom Life’s contracts contain the same types of exclusions found across the industry.
- Suicide within the first two policy years typically results in a refund of premiums paid rather than payment of the death benefit. After two years, this exclusion generally no longer applies.
- Death during the commission of a felony, or during conduct such as driving under the influence, may give the insurer grounds to deny the claim. Specific language varies by policy.
- Deaths from high-risk activities like skydiving, scuba diving, or motor racing may be excluded unless disclosed during underwriting and covered by rider, often at a higher premium.
- Some policies exclude deaths from armed conflict or acts of terrorism. Military personnel and people in conflict zones should check this specifically.
Most denial disputes trace back to the two-year contestability window. A misrepresentation on the application that the insurer considers material, meaning it would have changed the underwriting decision or the premium, can support denial or rescission. States differ on the standard: some require the insurer to prove the misrepresentation was intentional, while others allow rescission based on materiality alone regardless of intent.
If a claim is denied, the first step is an internal appeal with Freedom Life, submitted in writing with supporting documentation. If that fails, a complaint to your state’s department of insurance costs nothing and can sometimes resolve the matter without litigation. Before buying any policy, check the dispute resolution clause: some contracts require binding arbitration, which gives up the right to sue in court.