Life insurance is a contract between an insurance company and a policyholder in which the policyholder pays regular premiums and, in exchange, the insurer pays a death benefit to the policy's beneficiaries when the insured dies. The amount of life insurance you purchase may need to be enough to replace your income in your absence or it may need to cover expenses your family will face, such as the cost of burial, for example, or other family debts like paying for college or caring for aging parents.
Since life insurance is such an integral component of your family’s financial plan, you shouldn’t purchase a policy without conducting some research first. With that in mind, we compared more than 25 life insurance companies to find the best options for different types of consumers and their goals.
The 7 Best Life Insurance Companies
- Best Overall: Prudential
- Best Instant Issue: State Farm
- Best Value: Transamerica
- Best Whole Life: Northwestern Mutual
- Best Term Policies: New York Life
- Best for No Medical Exams: Mutual of Omaha
- Best for Military: USAA
Important
Most insurance companies require new applicants to chose either "male" or "female" when applying for insurance; and don't always offer an option for those who identify as nonbinary or transgender. While being nonbinary doesn't disqualify you from getting insurance, you should be aware that most insurance companies haven't updated their underwriting processes to reflect an awareness of gender issues.
Prudential: Best Overall
:max_bytes(150000):strip_icc()/Prudential_logo-320-height-793be95b226a4a77b267d7b4e83e2844.png){kind=logo}
Prudential
Prudential was chosen as the best life insurance company overall based on the company history of more than 145 years, the broad selection of policies available, and excellent ratings for financial strength.
You can get an instant quote for term life insurance coverage online
Prudential has excellent ratings for financial strength, as well as a long company history
Multiple riders can be added to your policy
You need to speak with an agent to get a quote for permanent life insurance coverage and you cannot get a quote online
Prudential Financial has been in business for more than 145 years, which bodes well for their reliability. The Prudential Insurance Company of America also boasts an A+ rating with AM Best, as well as an AA- rating with Standard & Poor’s in terms of their financial strength.
Prudential offers term life insurance coverage, universal life insurance, indexed universal life insurance, and variable universal life insurance, and you can add riders to your policy that include an accidental death benefit, a living needs benefit, and a children’s protection rider.
You’ll need to speak with an agent to get a quote for whole life insurance policies, but Prudential does let you apply for an instant online quote for term life insurance. The premium costs below were quoted on a $250,000 term life insurance policy that lasts 20 years. These quotes are for an individual in excellent health without any additional riders added to the policy.
Read the full review: Prudential Life Insurance
State Farm: Best Instant Issue
:max_bytes(150000):strip_icc()/State-Farm_logo-320-height-944e99a4e5ce43018aa7edfac3ea9688.png){kind=logo}
State Farm
We chose State Farm as the best company for instant issue policies based on the fact you can apply online and get coverage without a medical exam or any hoops to jump through. State Farm’s excellent ratings and long history also helped them gain their spot in our ranking.
State Farm extends some term policies without a medical exam, and you can get an instant answer
You can get free quotes for term or permanent life insurance coverage online
State Farm has excellent ratings for financial strength and customer satisfaction
State Farm is not licensed to offer life insurance in Massachusetts, New York, or Wisconsin
State Farm is another insurance company with a long and storied history. Founded in 1922 by a retired farmer, State Farm has grown from humble beginnings to offer a broad range of insurance products today. At the moment, State Farm comes in at number 36 on the Fortune 500 list of largest companies. This company also boasts an A++ rating for financial strength from AM Best, which is the highest rating possible.
Also, note that State Farm secured the highest ranking in the J.D. Power 2020 U.S. Life Insurance Study, which compared the experiences of life insurance and annuity customers nationwide.
When it comes to the life insurance products they offer, State Farm lets consumers purchase term life insurance coverage, whole life insurance, and universal life insurance. State Farm also makes it easy to enter your information and get a free quote online. They even offer online quotes for permanent life insurance policies.
State Farm extends instant answer term life insurance coverage you can apply for online, and these policies can be purchased with no medical exam. You do have to answer health questions in your application, however.
How much does life insurance with State Farm cost? We received the following quotes for individuals in excellent health for each of these age and gender groups. All quotes are for a $250,000 term life insurance policy that lasts 20 years.
Read the full review: State Farm Life Insurance
Transamerica: Best Value
:max_bytes(150000):strip_icc()/Transamerica_logo-320-height-7dbed9f1e1c64dbe983a9856d5eee7fe.png){kind=logo}
Transamerica
Transamerica offers very affordable term life insurance coverage and has a long history of financial strength and reliability, which helps the company stand out as the best value in life insurance in our review.
Premiums for term life insurance coverage represent a significant value
You can get a free quote online
Strong ratings for financial strength
You need to speak with an agent in order to get a quote for permanent life insurance
Transamerica isn’t licensed to sell insurance in the state of New York or the District of Columbia
While Transamerica may not be a household name, this company has been around since 1904 and boasts solid ratings for financial strength, including an A rating with AM Best and an A+ rating with S&P Global. Transamerica scored well below average in the J.D. Power 2020 U.S. Life Insurance Study, though, with only 734 points out of 1,000 possible.
Transamerica is licensed to sell life insurance in all states except for New York and the District of Columbia. They also offer a broad selection of life insurance coverage including term policies, whole life insurance, universal life insurance, index universal life insurance, and final expense life insurance.
Transamerica makes it possible to get a quote for term life insurance online, but you’ll have to speak with an agent in order to get a quote for their permanent life insurance policies.
Fortunately, their premiums for term coverage tend to be an excellent value. We received the following quotes for an individual in excellent health from each age and gender group. The policy details for this quote were for a $250,000 term policy that lasts for 20 years.
Read the full review: Transamerica Life Insurance
Northwestern Mutual: Best Whole Life
:max_bytes(150000):strip_icc()/Northwestern-Mutual_logo-320-height-6b7735943eab4dca8b2f088d439fb4ef.png){kind=logo}
Northwestern Mutual
While Northwestern Mutual is known for quality overall, their whole life insurance policies are especially popular. The company paid out a record $6.2 billion in dividends on these policies throughout 2020. Not only do their policies tend to pay generous dividends, but you get the benefit of working with a financial advisor who can help guide you on the best whole life insurance for your needs.
Northwestern Mutual has excellent ratings for qualify and financial strength
You can purchase term life, whole life, or universal life insurance coverage
You need to work with a Northwestern Mutual financial advisor to get a quote
Northwestern Mutual has been in business for more than 160 years, and they have solid ratings that show their commitment to offering quality products and services. Not only does Northwestern Mutual boast an A++ rating from AM Best and an AA+ rating from S&P Global, but they also earned the top spot in customer satisfaction in the J.D. Power 2020 U.S. Life Insurance Study.
Northwestern Mutual offers term life insurance coverage, whole life insurance coverage, and universal life insurance coverage. However, due to the fact they employ financial advisors who oversee your full financial picture, you will need to go through a complete financial review to get a quote.
This means you’ll need to work with one of their financial advisors and provide more information on your finances and your life. This can be a major benefit if you need some help with comprehensive financial planning and want to make your whole life insurance a part of your overall financial picture.
Read the full review: Northwestern Mutual Life Insurance
New York Life: Best Term Policies
:max_bytes(150000):strip_icc()/New-York-Life_logo-6400e7d8c2784b75beba64e94d2bc33d.png){kind=logo}
New York Life
New York Life boasts excellent ratings for financial strength, as well as flexible term life insurance policies that you can convert to permanent insurance in the future—and the company makes it easy to tailor your term life coverage for your own specific needs.
Company has excellent financial ratings
A long history of 175 years
Four main types of life insurance coverage are available
You can’t get a quote for life insurance online with this provider
You’ll need to speak with a financial advisor before you consider their coverage options
New York Life has been in business for 175 years, which is a testament to their reliability in the market. This company also reports very solid ratings for financial strength, including an A++ rating from AM Best and an AA+ rating from Standard & Poor’s. Further, New York Life sits in the sixth spot in the J.D. Power 2020 U.S. Life Insurance Study, which compared more than 20 companies based on customer service satisfaction and other factors.
New York Life offers four main types of life insurance coverage—term life insurance, whole life, universal life, and variable universal life. They also offer an array of helpful life insurance resources on their website, as well as charts that can help you compare their policies and offerings.
We chose New York Life as best for term life coverage based on the fact they offer term life insurance that can convert to permanent life later on. They also offer customizable add-ons for disability or terminal illness, which you can utilize in order to build the type of coverage that best fits your needs.
Unfortunately, New York Life does not offer free quotes online. Instead, they ask you to enter your information in a form, after which a financial professional will speak with you to go over your full financial picture.
Read the full review: New York Life Insurance
Mutual of Omaha: Best for No Medical Exams
:max_bytes(150000):strip_icc()/Mutual-of-Omaha_logo-320-height-da08dcf64ad54bf6abdc2e70d8a1a627.png){kind=logo}
Mutual of Omaha
Mutual of Omaha offers term and whole life insurance policies with no medical exam for applicants who qualify. This means you may be able to fill out a health questionnaire from the comfort of your home, with no invasive health exam, and get coverage when you pay your first month’s premiums.
The company boasts excellent ratings for financial strength
Mutual of Omaha makes it easy to get a quote online
You can apply for term coverage without a medical exam
You have to apply to find out if you can get coverage without a medical exam
Originally founded in 1909, Mutual of Omaha has grown tremendously over the years and is now a provider of life insurance, long-term care insurance, annuities, investments, and more. In terms of financial strength, Mutual of Omaha has an A+ rating with AM Best and an A+ rating with S&P Global. Also, Mutual of Omaha secured the third spot in the J.D. Power 2020 U.S. Life Insurance Study with 795 points out of a possible 1,000.
Mutual of Omaha offers a selection of life insurance policies to choose from including term life insurance, whole life, universal life, children’s whole life insurance, and accidental death insurance. You have the option to speak with an agent in your area if you prefer, but Mutual of Omaha also lets you get a free quote or apply for any of their policies online. Mutual of Omaha also offers term and whole life coverage options with no medical exam, although not all applicants will qualify.
How much does their coverage cost? We received the following quotes for the age groups and genders below. Policies quoted were for $250,000 in term coverage that lasts for 20 years.
Read the full review: Mutual of Omaha
USAA: Best for Military
:max_bytes(150000):strip_icc()/USAA_logo-836-height-58d50d13080043d7816fdc91f87dc16f.png){kind=logo}
USAA is only for military members and veterans, so they are often able to offer better rates and terms. USAA also boasts excellent ratings for financial strength, and they offer an array of riders you can add to your policy to bolster your benefits. Finally, USAA focuses solely on military members, so they understand the lifestyle and risks and can make the underwriting process easier as a result.
USAA makes it easy to get quotes for life insurance online
You can purchase term coverage or permanent life insurance depending on your needs
Excellent ratings for financial strength
USAA is only for military members and veterans or their families, so these policies aren’t available for everyone
Premiums may be higher than some competing companies offer, so make sure to shop around
USAA is a provider of insurance and banking products for U.S. military members and veterans. Founded in 1922, the company has grown from humble beginnings to become a provider of life insurance, auto insurance, checking and savings accounts, and many other products military members need in their lives.
Currently, USAA has more than 13 million members, and the life insurance component of the company boasts excellent ratings. These include an A++ rating from AM Best as well as an AA+ rating from Standard & Poor’s.
When it comes to life insurance coverage, USAA offers term life insurance coverage for up to 30 years as well as permanent life insurance products that last a lifetime. They also make it possible to get a free quote for both term and permanent coverage online, which means they are more transparent on pricing than many of their competitors.
USAA also offers some premium rider options to its customers, including a term life event rider that lets you increase coverage by $100,000 without a medical exam. Other available riders include a military severe injury rider, a future insurability rider, an accelerated death benefit rider, and the ability to add coverage for a spouse and children.
One detail to note about USAA is the fact that you have to be a member to apply for their products, and that membership requires some level of military service or veteran status. With that in mind, USAA life insurance products aren’t an option for non-military consumers.
Prices for policies vary, but we received the following quotes for a $250,000 term life insurance policy for various gender and age groups. These policy quotes were predicated on the fact that the applicant has excellent health and is a member of the Reserves.
Read the full review: USAA Life Insurance
Final Verdict
When looking for a life insurance company, it’s important to find a provider that has a strong and stable history, offers a full gamut of insurance options, and gives the added support and resources, including articles and calculators, to help you make an educated decision. Prudential Financial checks all these boxes and even makes it convenient by allowing you to quote policies online for up to $250,000. Of all the companies we reviewed, Prudential can fulfill the life insurance needs of more people when compared side by side to the competition.
Frequently Asked Questions
What Is Life Insurance?
Life insurance is a financial product you purchase in order to protect your family against the financial consequences of your death. Life insurance coverage intends to provide money to replace your wages in the event of your untimely death, and many consumers buy enough coverage to pay for debts like a mortgage or to cover college expenses for their children.
While people who purchase life insurance hope they never need it, this kind of coverage is crucial for consumers who want to sleep well at night without worrying about what might happen to their family if they pass away. Life insurance is also an integral part of the average person’s comprehensive financial plan, and this is especially true for families who have children to care for.
Term Life Insurance vs. Permanent Life Insurance
Term life insurance is sold for a particular term, usually in 10, 20, and 30-year increments. Once that term expires, the policyholder will have to apply again for a new policy. Premiums for term life insurance are almost always less expensive than permanent life insurance.
Permanent life insurance provides coverage for the policyholder’s entire life. There are two types of permanent life insurance: whole and universal.
Unlike term life, permanent life insurance offers a savings benefit to the owner, known as the cash value of the policy. The cash value can be borrowed or withdrawn from the policy.
How to Find the Best Life Insurance Policy
The best type of life insurance is the one that fits you and your family. Term life policies can be very affordable compared to whole life insurance.
For example, a 30-year-old man with a 20-year $500,000 policy will pay an average of $26 a month. A 30-year-old man with a $100,000 whole life policy will pay $58.45 a month. This is more than double the cost of term life while providing less coverage.
To get the best life insurance policy for your situation, and one that fits your budget, we advise following these steps:
- Step 1: Decide what kind of policy you want, term or permanent.
- Step 2: Figure out how much you need and how long of a term you need, if you’re buying a term policy. You may want to talk to a financial planner about what makes sense for you and your family.
- Step 3: Talk to a life insurance broker and ask them to pull quotes for the type of life insurance you’re interested in. If you're not sure whether to choose term or permanent life insurance, ask them to get quotes for both kinds.
- Step 4: Compare quotes from different providers and choose one that meets your requirements and fits your budget.
- Step 5: Schedule a medical exam if necessary. If not, apply for and wait to be approved for the policy.
What Does Life Insurance Typically Cover?
Life insurance is purchased on an individual, so it pays out a death benefit if that person passes away. Since term life insurance is offered in a specific amount for a specific term, the death benefit is the main component of a basic term life insurance policy.
However, some life insurance policies also build cash value over time. This cash value can serve as a savings account or as collateral the insured can borrow against. Note, however, that the cash value you accrue with some policies is a living benefit, meaning it goes back to the insurance company when you die.
Many life insurance companies have additional riders added on that can provide more coverage. Common riders include accidental death riders that pay out more if you die in an accident or the waiver of premium rider that comes into play if the insured becomes unable to work and pay their premiums. Another rider, the accelerated death benefit rider, allows the insured to collect a portion of their death benefit before they pass away upon diagnosis of a terminal illness.
What Does Life Insurance Typically Exclude?
During a recent interview with Andrew Mais, commissioner of the Connecticut Insurance Department, he remarked that "Policies tend to have certain exclusions. So if I go skydiving, for instance, it may not cover me."
There's a handful of exclusions that can come into play when you purchase life insurance. For example, you may be denied a payout on a policy if the insured commits suicide or dies within two years of the policy coming into force. Also, your policy may not pay out if you lie or purposely mislead the insurer on your health questionnaire.
What Are the Expected Costs of Life Insurance?
Life insurance costs can vary widely depending on the type of policy you purchase, the amount of coverage you buy, your age, your gender, your weight, whether or not you smoke or have smoked in the past, and your overall health. Some insurance providers also ask customers to complete a medical exam to qualify.
If you plan to buy a term policy and you’re age 30, you might pay as little as $11 per month for a policy worth $250,000 that lasts 20 years. If you’re 50 and want that much coverage, on the other hand, you can expect to pay closer to $40 per month or more. However, permanent life insurance coverage is always more expensive than term life insurance coverage.
The good news is that most companies make it easy to get a free, no-obligation quote for life insurance online. If you’re curious about how much you might pay for a policy, you should submit your information to find out.
Is Paying for Life Insurance Worth It?
If you want basic life insurance coverage that will replace your income for a specific term if you pass away, then it’s hard to argue against term life insurance. Premiums for term coverage tend to be inexpensive for consumers who are in good or excellent health, and you can gain peace of mind when you have a policy in place.
However, you may benefit from permanent life insurance if you have a more complicated financial situation, or if you have a certain level of wealth to protect. If you’re curious about which type of life insurance would serve you better, it may be wise to set up an appointment with a life insurance agent to go over the pros and cons of different types of coverage.
Either way, a basic level of life insurance coverage is usually worth the monthly premiums you’ll pay. You can pay more if you want a generous death benefit or an extremely long term, but anyone can benefit from some basic coverage to help care for dependents and cover final expenses.
Methodology
In order to compile our list of the best life insurance companies, we researched and evaluated more than two dozen different life insurance companies. We gathered data (both qualitative and quantitative) about each company, including ratings for financial strength (using independent ratings from companies like AM Best), customer satisfaction scores (using JD Power ratings, BBB complaints, and independent customer reviews), as well as pricing and customer experience.
Our review process gave preference to companies that offered online quoting tools and transparent pricing. We also looked at the functionality, such as online forms and customer portals, offered by carriers for customers to manage their policies and file claims online. Companies that offered multiple forms of customer service, such as phone, email, and live chat through their websites, also received ratings boosts.
Lastly, we looked at the individual offerings available—types of policies and riders offered, as well as additional products and services, such as investment options—from each of the companies we reviewed and assessed the relative strengths of each. Of the companies we considered, those that offered numerous types of policies (e.g. term, whole, universal), riders (e.g. living benefits, waiver of premium, return of premium), and other services were given higher ratings, as we believe these companies are better positioned to help individual customers find the life insurance coverage they need.