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Life insurance can replace lost income, cover funeral expenses and medical bills, or pay ongoing costs like a mortgage while your estate is sorted out. But costs and benefits vary widely, depending on the company you go with, the riders that are included, and the type of policy you get. Term life insurance is often the easiest to buy: If you're healthy and young (less than 50 years old), you could get a policy online in minutes. But if you need a permanent policy, are older, or are in poor health, be prepared to speak to an agent and for a longer application process (which may include a medical exam).
To choose the best life insurance companies, we evaluated dozens of life insurance providers in the following categories: policy types and features (21%), financial stability (17%), application process (16%), customer satisfaction (15%), customer service (14%), riders and living benefits (9%), and cost (8%).
12 Best Life Insurance Companies of 2023
- Best Term Life Insurance: Protective
- Best Buying Experience: Haven Life
- Best Convertible Term Life Insurance: MassMutual
- Most Living Benefits: Nationwide
- Best Return-of-Premium Term: Mutual of Omaha
- Great Traditional Insurer: Guardian
- Best for Military: USAA
- Great for Dividends and No-Medical Exam Life Insurance: Penn Mutual
- Tied for Cheapest Term: Banner
- Most Satisfied Customers: State Farm Life Insurance
- Best Whole Life Insurance: New York Life
- Largest Life Insurance Company: Northwestern Mutual
Compare life insurance quotes with our partner Covr Financial from multiple providers before buying.
Best Term Life Insurance : Protective
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- AM Best Rating: AM Best is a credit rating agency that assigns insurance companies a letter grade from “A++” to “D.” A company’s grade indicates its ability to pay its claims and honor its financial obligations. A+
- Accepts Credit Cards: Yes
Protective's term policies are the most affordable of all insurers we reviewed (tied with two others), and it offers terms up to 40 years, which is uncommon.
Tied for least-expensive term policies
Offers term coverage for up to 40 years
Allows credit card payments
Offers no-medical-exam coverage
Ranked 15th out of 22 companies for customer satisfaction
Protective has the cheapest term life insurance of all the companies we reviewed (along with Banner and Haven Life). Its excellent pricing and policy options make it our pick for best term life insurance company, most affordable life insurance company, and best life insurance companies for young adults.
Protective offers 40-year term policies, which is uncommon in the industry—most companies cap terms at 30 years—and it received fewer complaints than expected for a company of its size over the past three years. The company also offers generous child riders on its policies, which makes it a good life insurance company for children.
However, Protective ranked lower than the industry average in J.D. Power’s 2022 U.S. Individual Life Insurance Study, coming in at #15 out of 22 companies.
Protective offers term, whole life, universal life, variable universal life, and indexed universal life insurance policies.
- Protective Classic Choice Term
- Non-Participating Whole Life
- Custom Choice Universal Life (UL)
- Advantage Choice UL
- Lifetime Assurance UL
- Survivor UL
- Executive UL
- Strategic Objectives II VUL (variable universal life insurance)
- Indexed Choice UL
Term Pricing
We found that a healthy 40-year-old female would pay $22.88 per month for a $250,000 30-year term policy.
According to Protective, its premiums are usually among the three across all issue ages and face amounts—and our research supports this for term policies.
- Protected insurability rider (guaranteed insurability rider)
- Children’s term rider
- Waiver of premium
- Terminal illness accelerated death benefit rider
- ExtendCare rider (terminal illness accelerated death benefit rider)
Best Buying Experience : Haven Life
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- AM Best Rating: AM Best is a credit rating agency that assigns insurance companies a letter grade from “A++” to “D.” A company’s grade indicates its ability to pay its claims and honor its financial obligations. A++
- Accepts Credit Cards: Yes
Haven Life offers a seamless and nearly effortless online quote, application, and buying experience. Plus, it's backed by the A++ (Superior) financial standing of MassMutual.
Easy-to-navigate website
Online application
Same-day decision
A++ financial strength
Excellent pricing
Only term life insurance is available
Term policies are non-convertible
Limited riders
Haven Life's website is what all other life insurance websites should aspire to be. The quote and application processes are seamless and entirely online. You don't have to provide any personal information until you decide to apply, and brief educational blurbs are well-placed to guide and address any questions you may have. But if you still need help, an agent is just a click away via live chat; or you can choose to call in instead.
Plus, Haven has some of the lowest term pricing of the companies we reviewed. And if you opt for a no-medical-exam life insurance policy, you may be approved the same day. For these reasons, Haven places prominently in our review of the best term life insurance companies and best life insurance companies for young adults. The only strike against Haven Life is that its term policies are not convertible to permanent coverage—an option that 89% of the best term life insurance companies we reviewed offer.
- Haven Term (medical exam required/higher coverage limits)
- Haven Simple (no medical exam/lower coverage limits)
Term Pricing
We found that a healthy 40-year-old female would pay $22.90 per month for a $250,000 30-year term policy.
- Waiver of premium rider
- Accelerated death benefit rider (terminal illness)
Best Convertible Term Life Insurance : MassMutual
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- AM Best Rating: AM Best is a credit rating agency that assigns insurance companies a letter grade from “A++” to “D.” A company’s grade indicates its ability to pay its claims and honor its financial obligations. A++
- Accepts Credit Cards: No
MassMutual is top-ranked for financial strength, has paid dividends every year since 1869, has few complaints, and has a wide selection of policies.
Rated A++ for financial stability
Long history of paying dividends
Very few complaints
Liberal term conversion options
Few accelerated benefit riders included at no cost
Doesn’t accept credit card payments
MassMutual stands out for a number of reasons. It has an A++ (Superior) financial rating from AM Best. This is the highest rating a company can receive and indicates a “superior” ability to pay claims. MassMutual’s dividend-paying history also adds to its clout: Every year since 1869, eligible policyholders have received life insurance dividends. In 2023, MassMutual plans to pay $1.9 billion in dividends, which is its largest payout ever. Plus, the company has received very few complaints, according to NAIC data over the past three years, and offers a wide range of policy types.
It’s worth noting that owners of MassMutual term policies can convert to any of MassMutual’s permanent policies. This is important because some companies limit the types of policies you can convert your term policy into. (Convertible term life insurance allows you to exchange some or all of your term coverage for permanent without having to re-qualify for life insurance.)
MassMutual offers term life insurance, whole life insurance, universal life insurance, and variable universal life insurance.
- MassMutual Term
- Whole Life 100
- Whole Life 65
- Whole Life 10/15/20-Pay
- Whole Life High Early Cash Value (HECV)
MassMutual’s whole-life policyholders are eligible to receive annual dividends based on the company’s financial performance. Dividends can be used to increase the death benefit or cash value, or pay premiums.
- Universal Life (UL) Guard
- Survivorship Universal Life (SUL) Guard
- Apex VUL (variable universal life insurance)
Some universal life insurance policies can be structured like term coverage, where the coverage is designed to remain in effect for a fixed period of time.
Term pricing
We found that a healthy 40-year-old female would pay $27.26 per month for a $250,000 30-year MassMutual term policy.
- Guaranteed insurability rider
- Waiver of premium rider
- Terminal illness accelerated death benefit rider
- Long-term care accelerated death benefit rider
- Chronic illness accelerated death benefit rider
Most Living Benefits : Nationwide
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- AM Best Rating: AM Best is a credit rating agency that assigns insurance companies a letter grade from “A++” to “D.” A company’s grade indicates its ability to pay its claims and honor its financial obligations. A+
- Accepts Credit Cards: Yes
For the most personalized quote experience, call Nationwide directly at 844-457-7984. And if you're over 50 or in poor health, it's best to work with an agent.
Three living benefits included with most policies, generous no-exam requirements, strong financials, and satisfied customers make Nationwide a great option.
No-exam life insurance available to very healthy applicants
Few customer complaints
Living benefits included on most policies
Allows credit card payments
No live chat available
Nationwide is a financially stable life insurance company that's been in business for nearly a century. It offers a wide range of policies that may be available without a medical exam and with fast approval. It's also our top pick for best whole life insurance companies, best no-medical-exam life insurance companies, and best life insurance companies for people over 50.
The company garnered an A+ (Superior) financial stability rating from AM Best and received very few customer complaints over the past three years. It also boasts a wide range of policy types and riders, no-exam life insurance for healthy applicants, and most policies include three accelerated death benefit riders at no upfront cost for chronic, critical, and terminal illnesses. This was a rare offering among the insurance companies we considered. Its host of exceptional features puts it squarely at the top of our best life insurance companies list.
Nationwide offers term policies as well as traditional whole life insurance, universal life insurance (UL), variable universal life insurance (VUL), and indexed universal life insurance (IUL).
- Guaranteed Level Term
- Whole Life 100 and 20Pay Whole Life
- No-Lapse Guarantee UL II (universal life insurance)
- VUL Accumulator (variable life insurance)
- VUL Protector
- Advisory VUL
- IUL Accumulator II 2020 (indexed universal life insurance)
- IUL Protector II 2020
- Survivorship IUL 2020
Nationwide's indexed policies let you participate in stock market gains, but without direct market exposure. Cash value growth is tied to the S&P 500, NASDAQ-100 and/or the Dow Jones Industrial Average. Though not as risky as variable life insurance, these policies are complex and can still lose value when market gains aren’t enough to offset policy expense.
Term pricing
We found that a healthy 40-year-old female would pay $26.25 per month for a $250,000 30-year term policy.
- Chronic illness accelerated death benefit rider
- Critical illness accelerated death benefit rider
- Terminal illness accelerated death benefit rider
- Long term care accelerated death benefit rider
- Accidental death benefit rider
- Children's term insurance rider
- Guaranteed insurability benefit rider
- Waiver of premium rider
Best Return-of-Premium Term : Mutual of Omaha
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- AM Best Rating: AM Best is a credit rating agency that assigns insurance companies a letter grade from “A++” to “D.” A company’s grade indicates its ability to pay its claims and honor its financial obligations. A+
- Accepts Credit Cards: Yes
Mutual of Omaha offers return-of-premium (ROP) term life insurance, a wide range of riders, and most policies include at least two living benefits.
Many plans with living benefits
Wide range of riders available
Guaranteed issue options
Return of premium term available
Online applications unavailable for term policies
At no upfront cost, Mutual of Omaha includes three accelerated benefit riders on its Term Life Express and IUL Express policies (for critical, chronic, and terminal illnesses), and most other policies include two of these benefits. Accelerated benefit riders add flexibility to a life insurance policy by letting you tap the death benefit early if you have a qualifying illness.
Plus the company offers at least two uncommon features: a disability income rider and a return of premium benefit on select term policies (both for an extra cost). With return of premium (ROP) term life insurance, you can receive up to 100% of premiums back if you outlive the term. Only 11 of the 91 life insurance companies we reviewed make this type of coverage available. Mutual of Omaha is also our top pick for the best burial insurance companies.
- Term Life Answers
- Term Life Express
- AccumUL Answers (universal life insurance)
- Income Advantage IUL (index universal life insurance)
- Life Protection Advantage IUL
- IUL Express
- Children’s Whole Life Insurance
- Guaranteed Whole Life Insurance
Term Pricing
We found that a healthy 40-year-old female would pay $28.38 per month for a $250,000 30-year term policy.
Chronic, critical, and terminal illness riders are included free of charge on Mutual of Omaha’s Term Life Express and IUL Express policies. Most other policies include chronic and terminal illness riders at no additional cost.
- Critical illness accelerated death benefit rider
- Terminal illness accelerated death benefit rider
- Chronic illness accelerated death benefit rider
- Accidental death benefit rider
- Dependent children's rider
- Guaranteed insurability benefit rider
- Waiver of premium rider
- Disability income rider
Great Traditional Insurer : Guardian
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- AM Best Rating: AM Best is a credit rating agency that assigns insurance companies a letter grade from “A++” to “D.” A company’s grade indicates its ability to pay its claims and honor its financial obligations. A++
- Accepts Credit Cards: No
Guardian received an exceptionally low number of customer complaints, has an A++ (Superior) financial strength rating, and pays dividends to eligible policyholders.
Below average number of complaints over three years
Receives an A++ for financial stability
Whole life policies are eligible for dividends
Online application and claim filing not available
Credit card payments not accepted
Along with MassMutual and New York Life, Guardian is one of only nine companies we reviewed to earn a top financial strength rating of A++ from AM Best, reflecting superior financial stability. Also like MassMutual and New York Life, Guardian offers dividends to eligible whole-life policyholders and announced its largest dividend payment ever for 2023 at $1.26 billion to eligible policyholders. For these reasons it ranked highly for:
- best whole life insurance companies (highest issue age)
- best life insurance companies for people over 50 (best for financial stability)
- best senior life insurance companies (best for financial stability)
Guardian Life received a below-average number of complaints with the NAIC over the past three years of available data. Additionally, the company offers no-exam policies to eligible applicants.But if you’re seeking a streamlined online experience, Guardian falls short. It doesn’t offer an online application process (without an agent), online claim filing, or credit card payments, and information on its individual product offerings is hard to find.
- Guardian Level Term
- Guardian Level Premium Whole Life
- Limited Pay Whole Life
- Variable Universal Life Insurance
Term Pricing
We found that a healthy 40-year-old female would pay $27.47 per month for a $250,000 30-year term policy.
- Waiver of premium rider
- Accidental death benefit rider
- Terminal illness accelerated death benefit rider
- Long-term care accelerated death benefit rider
- Chronic illness accelerated death benefit rider
- Paid-up additions (PUA) rider
Best for Military : USAA
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- AM Best Rating: AM Best is a credit rating agency that assigns insurance companies a letter grade from “A++” to “D.” A company’s grade indicates its ability to pay its claims and honor its financial obligations. A++
- Accepts Credit Cards: No
USAA offers military-specific benefits that pay out if you become injured in the line of duty and cover you during war.
Severe injury benefits
Add to your term coverage without taking another exam
Included term conversion rider
A++ AM Best rating
Doesn’t take credit card payments
No-exam coverage options are limited
What makes USAA a solid choice for military families are its military-specific riders. Level Term V policies include a severe injury rider that pays out $25,000 for specific injuries incurred during military service. USAA also offers guaranteed insurability riders at no additional cost that give you the option to increase coverage after leaving the military (and without having to prove insurability) or if you experience certain life events, like having a child. Level Term V policies also include a conversion option that allows you to convert to permanent coverage without a medical exam or questions after you've had your term policy for at least one year.
The drawbacks are that USAA life insurance does not accept credit card payments and has limited no-medical-exam options. USAA sells Mutual of Omaha's guaranteed issue whole life policies that have a minimum age of 45 and a coverage maximum of just $25,000.
- Level Term V
- Essential Term
- Simplified Whole Life
- Guaranteed Issue Whole Life (via Mutual of Omaha)
- Universal Life Insurance (via John Hancock)
Term Pricing
We found that a healthy 40-year-old female would pay $26.86 per month for a $250,000 30-year term policy.
- Guaranteed insurability rider
- Term Life Event Option Rider
- Life Event Option Rider
- Child rider
- Waiver of premium rider
- Terminal illness accelerated death benefit rider
Great for Dividends and No-Medical Exam Life Insurance : Penn Mutual
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- AM Best Rating: AM Best is a credit rating agency that assigns insurance companies a letter grade from “A++” to “D.” A company’s grade indicates its ability to pay its claims and honor its financial obligations. A+
- Accepts Credit Cards: Yes
Penn Mutual has paid dividends for nearly 175 years and offers up to $7.5 million in coverage for no-medical-exam life insurance to eligible applicants—the highest limit we've seen.
Strong dividend-paying history
High coverage no-medical-exam life insurance
Well-priced term policies
Very few customer complaints
Limited website information
Quotes not available on the website
Penn Mutual is a well-established insurer with superior financial strength and an impressive track record of customer satisfaction. It has the longest dividend-paying history of companies on this list and announced that it plans to pay eligible policyholders $1.63 million in dividends in 2023, which is a record payout.
Penn Mutual is also an excellent choice for those with high-coverage needs. The company offers $7.5 million in coverage to very healthy applicants up to age 65 without a medical exam. This is the highest no-exam limit we've seen, and the highest age limit we've seen for no-exam policies, which is why it's a top pick for:
- Best no-medical-exam life insurance companies (best for high coverage)
- Best whole life insurance companies (best for dividends)
But Penn Mutual doesn't just cater to those looking for high coverage or permanent policies. Its quotes for term coverage were the fourth most affordable of the 32 companies we collected quotes for. That said, the company does not make term quotes available on its website. For details and to apply for any type of coverage, you'll need to get in touch with an agent.
- Guaranteed Convertible Term
- Protection Non-Convertible Term
- One-Year Term
- Guaranteed Whole Life II
- Survivorship Whole Life
- Guaranteed Protection UL (universal life insurance)
- Protection UL
- Diversified Advantage Variable Universal Life (VUL)
- Protection VUL
- Accumulation Builder Flex Indexed Universal Life (IUL)
- Survivorship Plus Select IUL
Term Pricing
We found that a healthy 40-year-old female would pay $23.92 per month for a $250,000 30-year term policy.
- Guaranteed Increase Option (guaranteed insurability rider)
- Children's term rider
- Disability waiver of premium rider
- Terminal illness accelerated death benefit rider
- Chronic illness accelerated death benefit rider
- Accidental death benefit rider
Tied for Cheapest Term : Banner
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- AM Best Rating: AM Best is a credit rating agency that assigns insurance companies a letter grade from “A++” to “D.” A company’s grade indicates its ability to pay its claims and honor its financial obligations. A+
- Accepts Credit Cards: No
Term premiums were the lowest of all insurers we reviewed (tied with two other companies), and Banner offers terms up to 40 years.
Term coverage is very affordable
40-year terms available
Generous term conversion period
Online application available
Very few customer complaints
Few policy types available
Limited riders
Banner, along with Protective and Haven, is an excellent choice if you're looking for the cheapest term life insurance. Banner is also one of only two companies that offer 40-year term policies (Protective is the other). Additionally, Banner boasts generous term conversion options—you can convert your term policy through the end of the level-premium period or until you turn 70, whichever happens first. This is important because some companies limit the conversion period to the first 10 years of the policy.
While there's a lot to like about Banner, it doesn't offer many policy options—just term and universal life policies. It also doesn't offer as many riders to customize policies as some of its competitors.
- OPTerm
- Life Step UL (universal life insurance)
Term Pricing
We found that a healthy 40-year-old female would pay $22.89 per month for a $250,000 30-year term policy.
- Child term rider
- Waiver of premium rider
- Terminal illness accelerated death benefit rider
Most Satisfied Customers : State Farm Life Insurance
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- AM Best Rating: AM Best is a credit rating agency that assigns insurance companies a letter grade from “A++” to “D.” A company’s grade indicates its ability to pay its claims and honor its financial obligations. A++
- Accepts Credit Cards: Yes
State Farm has earned the #1 spot in J.D. Power's customer satisfaction rankings for life insurance for the past three years.
Superior financial stability
#1 for customer satisfaction by J.D. Power
Whole life policies can earn dividends
Bundling discounts may be available
Relatively expensive term coverage
Limited coverage for no-medical-exam life insurance
State Farm is our pick of the best life insurance companies for customer satisfaction because it ranked #1 in J.D. Power's U.S. Individual Life Insurance studies for 2022, 2021, and 2020. The studies measured consumer experiences with the largest life insurance companies nationwide. Plus, State Farm boasts an A++ (Superior) rating for financial strength from AM Best, which is the highest rating possible.
The company is also one of our:
- best whole life insurance companies
- best burial life insurance companies
- best return-of-premium (ROP) term life insurance companies
If you're looking for a whole life policy that pays dividends, State Farm offers one. Plus, you may be able to save on your premium by bundling life insurance coverage with another State Farm coverage, such as auto. However, the company's term policies are priced high compared to our review of 32 life insurance companies offering term quotes online. And if you're in the market for life insurance without a medical exam, you may want to look elsewhere. At present, the most coverage you can get with State Farm without a medical exam is $50,000.
- Select Term Life
- Return of Premium Life
- Instant Answer Term
- Limited Pay Whole Life
- Single Premium Whole Life
- Universal Life
- Survivorship Universal Life
- Joint Universal Life
- Final Expense (called $10,000 Whole Life in New York State)
Term Pricing
We found that a healthy 40-year-old female would pay $35.24 per month for a $250,000 30-year term policy, which is one of the highest rates we've seen.
- Guaranteed insurability rider
- Child rider
- Waiver of premium rider
- Accelerated death benefit: Flexible Care Benefit Rider (long-term care rider)
- Select term rider
- Level term rider
Best Whole Life Insurance : New York Life
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- AM Best Rating: AM Best is a credit rating agency that assigns insurance companies a letter grade from “A++” to “D.” A company’s grade indicates its ability to pay its claims and honor its financial obligations. A++
- Accepts Credit Cards: No
New York Life is the second-largest life insurance company, according to the latest available NAIC data, and has been paying dividends to eligible policyholders every year for the past 169 years.
A++ (Superior) AM Best rating
Long history of paying dividends
Some policies available to applicants up to 90 years old
Broad selection of riders
Very limited policy details on the website
Can’t get much information without contacting an agent
Online quotes and applications not available
New York Life, founded in 1845, is the oldest company on this list and has paid dividends for 169 consecutive years. In 2023, it plans to pay $2 billion in dividends, which is the largest payout in company history.
New York Life earns an A++ (Superior) AM Best rating and receives very few customer complaints.It also issues whole life policies to eligible 90-year-old applicants. Its stellar reputation and financial stability are two reasons it's top-ranked in our best life insurance companies for seniors and best whole life insurance companies reviews.
The company offers term, whole life, and universal life policies, including variable universal life (VUL) insurance, plus a diverse mix of riders and options for plan customization. Among these are living benefits riders and a Spouse’s Paid-Up Purchase Option (SPPO). The SPPO is an uncommon offering that lets the spouse of the insured person use the death benefit to purchase a fully-paid-up life insurance policy on their own life (without medical underwriting) upon their spouse's passing.
Unfortunately, it’s difficult to locate policy-specific information on the website. If you have questions or want a quote, you’ll need to provide your name and number and wait for an agent to contact you.
- Level Premium Convertible Term
- 10-20 Yearly Convertible Term
- Million Plus Level Term 10
- Whole Life Insurance
- Custom Whole Life Insurance
- Basic Universal Life Insurance
- Custom Universal Life Guarantee
- Protection Up to Age 90
- Variable Universal Life Accumulator II
- Spouse’s Paid-Up Insurance Purchase Option (SPPO)
- Guaranteed insurability rider
- Child term rider
- Disability waiver of premium rider
- Disability income rider
- Accidental death benefit rider
- Terminal illness accelerated death benefit rider
- Long-term care accelerated death benefit rider
- Chronic illness accelerated death benefit rider
- Critical illness accelerated death benefit rider
- Paid-up additions (PUA) rider
- Money back option rider
Largest Life Insurance Company : Northwestern Mutual
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- AM Best Rating: AM Best is a credit rating agency that assigns insurance companies a letter grade from “A++” to “D.” A company’s grade indicates its ability to pay its claims and honor its financial obligations. A++
- Accepts Credit Cards: No
Northwestern Mutual is the largest life insurance company in the country with 7.49% market share, according to the National Association of Insurance Commissioners (NAIC). It has stellar financial ratings across multiple rating agencies and offers a wide selection of policies.
Highest financial strength ratings
Long dividend-paying history
Exceptionally few customer complaints
Largest insurance company, nationwide
Must work with a financial advisor to buy a policy
Digital experience lacking
Company website lacks policy details
Northwestern Mutual ticks all the boxes for financial stability: it boasts the highest financial strength ratings from AM Best (A++), Moody's (Aaa), and Fitch (AAA), and it's stood the test of time. The company has been in business since 1857, weathering numerous financial storms, and has paid eligible policyholders dividends for over 150 years.
The company is on track to $6.8 billion in dividends to eligible policyholders in 2023. Not only is this its largest payout ever, it's also the largest overall dividend payment of all companies on this list. Dividends are a key feature of some of the best whole life insurance companies.
Plus, Northwestern Mutual received the fewest complaints (relative to its size) of all companies in this list according to the NAIC complaint index. (It received the second-fewest complaints of the 91 insurance companies we reviewed.) Unfortunately, there's not much you can do without an agent at Northwestern Mutual. Policy details are lacking online so you'll need to contact the company for specifics. It's primarily because of the company's lack of transparency and self-serve options that it didn't score higher in our review.
Read the full Northwestern Mutual life insurance review.
Compare the 12 Best Life Insurance Companies of 2023
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AM Best is a credit rating agency that assigns insurance companies a letter grade from “A++” to “D.” A company’s grade indicates its ability to pay its claims and honor its financial obligations.
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Life Insurance Glossary
- Free-Look Period: This is an amount of time after purchasing the policy during which you can cancel for any reason and receive a full refund. Free-look periods typically last 10 to 30 days, depending on your state and age.
- Face Value: This is the amount of death benefit you purchased with the policy.
- Death Benefit: The amount of money your beneficiaries receive when you die. In some cases, the death benefit may differ from the policy's face value, such as if your policy has an outstanding loan when you die (this would reduce the death benefit).
- Beneficiary: The individual or individuals you choose to receive the death benefit when you die.
- Policyholder: This is the person who owns the policy and is responsible for paying premiums. They are often, but not necessarily, the same person as the insured.
- Insured: This is the person whose life is insured by the life insurance policy.
- Cash Value: This refers to a cash account within a permanent life insurance policy. A sufficient cash value keeps the policy from lapsing as the cost of insurance increases. You may be able, however, to withdraw or take loans from the cash value during life.
- Dividends: These are profit-sharing payments that are made, usually on an annual basis, to certain whole life policyholders. The company must be a mutual life insurance company and dividends are not guaranteed.
- Surrender Charge: Most permanent life insurance policies have a surrender period. This period may last from a few to as many as 20 years. During this time, withdrawals from the cash value (in excess of a certain amount) are assessed a penalty fee, known as the surrender charge.
- Rider: A life insurance rider is an add-on benefit or feature on the underlying policy. Common riders include guaranteed insurability, child term, automatic premium loan (APL), and living benefit riders.
- Living Benefits: Living benefits are types of riders that allow you to use part of the death benefit while still alive. Many companies offer (or include) living benefits for chronic, critical, and terminal illnesses, and long-term care.
- Contestable Period: A two-year period during which time the life insurance company may closely investigate any cause of death and review your application for fraud. Death by suicide is not covered during the contestable period.
- Policy Loan: Cash-value life insurance policies typically allow you to borrow from the policy's cash value. This negates any surrender charges associated with a withdrawal as well as potential tax implications (as long as the loan is paid back and the policy doesn't lapse). If you die before the loan is repaid, the death benefit will be reduce in order to cover it.
- Lapse: This is when your policy is cancelled and coverage ends as a result of insufficient payment. The life insurance company will contact you to tell you the amount you must pay to avoid a lapse in coverage.
- Grace Period: Once your policy has lapsed, this is the amount of time you have to pay the necessary amount to reinstate your policy.
How To Choose the Best Life Insurance Company
To find the best life insurance companies, consider financial strength, customer complaints, customer satisfaction, available policy types, available and included riders, and ease of application. Then, collect quotes among your top picks. Doing this homework will ensure you choose a company that offers a policy that suits your needs and will be there when your family needs it.
- Financial Strength: Check AM Best ratings for financial stability. A++ and A+ ratings are considered “Superior,” while A and A- are considered “Excellent.” Other agencies also rate insurance companies, including Moody's, Fitch, Standard & Poor's, and Demotech.
- Customer Complaints: The National Association of Insurance Commissioners (NAIC) uses customer complaints to create the NAIC complaint index, which indicates whether a company received more or fewer complaints than expected, based on its market share. An index lower than 1 indicates the company received fewer complaints than expected, while a number over 1 means it got more than expected. The higher the index, the more customers complain, and vice versa.
- Customer Satisfaction: Not all companies are ranked for customer satisfaction, but check sources like J.D. Power’s 2022 U.S. Individual Life Insurance and Individual Annuities studies to see if companies you’re considering are. At a glance, you can see how a company ranks compared to others when it comes to customer satisfaction.
- Available Policy Types: If you know which type of insurance you need, make sure each company you’re considering offers it. But note that a whole life policy with one company can be very different from a whole life policy with another. Though policies between companies might have the same name, each company tries to make its product stand out. Make sure their efforts suit your needs.
- Available and Included Riders: This is a major way that same-named policies can differ. For example, a universal life policy with one company might include a generous accelerated death benefit rider at no cost, while a UL policy with another company may not. Or a term policy with one company may allow you to convert it to permanent coverage, while a term policy with another company may not. Research riders to know what you’re paying for.
- Ease of Application: Sometimes the biggest barrier to getting a life insurance policy is the application process. And often, it’s better to get some coverage in place—especially if you have dependents—than it is to find the absolute best coverage you can. If you’re too busy for an exam, look for companies that don’t require one.
Sometimes the biggest barrier to getting a life insurance policy is the application process. And often, it’s better to get some coverage in place—especially if you have dependents—than it is to find the absolute best coverage you can. If you’re too busy for an exam, look for companies that don’t require one.
If you’re healthy, choose a company that requires a medical exam or offers an accelerated underwriting process. This means the insurance company will take your health into consideration, which could significantly reduce your rate.
Types of Life Insurance
Life insurance can be divided into two main types: term and permanent, or cash value life insurance. Term life insurance policies only provide coverage for a certain period of time, such as 30 years. Permanent policies are sold primarily as either universal or whole life insurance; they’re designed to offer coverage for the duration of your natural life.
Term Life Insurance
Term life insurance is the most affordable type of life insurance coverage because it isn't designed to last into old age. Most term life policies last between 10 and 30 years.
The best term life insurance policies offer affordable coverage that can be converted into permanent coverage before the term policy expires. This is called convertible term life insurance. The advantage of buying convertible term is that you can lock in the health classification the insurance company gave you when you first applied for the term policy. (This is important if you develop a health issue that could increase you rate, or make you ineligible for coverage.)
Most term life insurance policies also allow you to renew coverage on an annual basis once the term expires. But the premium will increase annually based on your current age; if you want coverage longer than the duration of your term policy, it's best to convert to whole life instead of renew. Most companies offer term life insurance for terms up to 30 years, but some, such as Protective, offer terms up to 40 years.
Whole Life Insurance
Whole life insurance is more expensive than term life insurance and even universal life insurance (another form of permanent coverage). This is because whole life insurance has strong contract guarantees that ensure your coverage won't lapse: As long as you pay premiums as scheduled in the contract, the insurance company guarantees the death benefit and cash values for life. This is why it's an ideal solution when you need rock-solid permanent coverage and can afford the premiums. Some whole life insurance policies offered by mutual life insurance companies also pay dividends.
Universal life insurance, on the other hand, is more flexible (you can skip premium payments as needed), but could lapse in later years if you don't build up the cash value sufficiently.
Most permanent policies have a surrender period, during which time you’ll pay a surrender charge for withdrawing from the cash value or canceling the policy. Ask how long the surrender period is on any cash value life insurance you might buy.
Universal Life Insurance
Universal life (UL) insurance is similar to whole life insurance with a couple of important distinctions. The premiums and death benefit can be changed after the policy has been issued, and interest is credited to the cash value based on current interest rates. So, unlike whole life insurance, you don’t know in advance how much the cash value will be worth in the future.
Universal life insurance is more affordable than whole life insurance, but you may need to increase your premium payment in the future if the cash value doesn't perform as expected and/or you don't make sufficient premium payments.
Indexed Universal Life (IUL) Insurance
Indexed universal life insurance (IUL) policies are a hybrid type of UL coverage that provide an opportunity to profit from upward swings in a variety of popular stock market indexes, such as the S&P 500. Positive index performance results in the cash value being credited, while negative performance does not result in a cash value loss. The least amount the cash value will be credited is referred to as the floor (for example, when the index experiences a negative return). Most IUL policies have a 0% floor.
Conversely, gains are limited as well. In fact, insurance companies are innovative when it comes to the complexity of calculations they employ to limit gains. For example, an IUL policy may be subject to one or more (usually “more”) of the following:
- Participation rate: This is the percentage of index gains that will be credited to the policy. For example, if the index returns 10% and the participation rate is 60%, 6% would be credited).
- Spread: This rate is deducted from the index’s gains. If the index returns 10% and the spread is 4%, your policy would be credited 6%.
- Cap: This limits the amount of interest your policy can be credited. If the cap is 6% and the index returns 10%, 6% will be credited to the cash value.
IUL policies can be an attractive proposition if you want the potential for stock market gains but want to avoid losses. Just be aware that if the index doesn’t perform well enough, interest credited could be insufficient to keep up with policy expenses and your premium could increase.
Variable Life Insurance
Variable universal life insurance (VUL) is the most risky type of coverage. Like IUL, it's typically designed on the chassis of a regular universal life insurance policy. But instead, the cash value is invested directly in the stock market via subaccounts, which are very similar to mutual funds.
While variable life insurance can be a tax-advantaged way to invest in the stock market, the cash value is not protected from market losses. This means if your investments underperform, you could be required to increase premium payments or the policy could lapse. What's more is that VUL policies that lapse may result in severe tax consequences.
Most people should only invest in variable life insurance if they have sufficient life insurance coverage in place via another policy. Since this is considered an investment product, it can only be sold by life insurance agents that are also licensed to sell securities. Always ask for a prospectus before investing in VUL. It's best to speak with a financial advisor to be sure an investment in variable life insurance makes sense.
Burial Insurance (a.k.a. Final Expense and Guaranteed Issue)
Burial insurance policies are whole life policies designed for older applicants in poor health and don't require a medical exam. Some policies have a handful of health questions, while others are considered guaranteed issue and do not consider your health at all when determining your rate or approving your application. As a result, these policies are the most expensive, relative to the amount of coverage.
They also carry a “graded benefit” for two to three years. If you die from natural causes during this time, your beneficiaries will only receive a return of the premiums you paid (usually plus a percentage like 10%). They will not receive the full death benefit unless you die after this period. After the waiting period, the policy’s full face value will be paid.
The minimum age for burial insurance may be as low as 40 years old, but some companies have higher minimum age limits. Final expense policies also have low coverage amounts (typically not more than $35,000) as they are intended to cover the insured person's final expenses.
Average Life Insurance Cost
Term life insurance can cost as little as $13 per month, on average, for a $250,000 30-year policy for a healthy 25-year-old. Or, the same policy could cost around $400 for a 65-year-old smoker. The monthly cost of whole life insurance for the same amount of coverage is over $100 per month for a healthy 25-year-old, and almost $1,000 for a 65-year-old smoker.
Life insurance companies determine how much you'll pay through the application process, during which they consider factors such as your age, health, occupation, and location. Older applicants and those in poor health pay the most for life insurance, which is why it often makes sense to apply while you're young and healthy.
| Average Life Insurance Cost ($250,000 30-year term policy) | |||
|---|---|---|---|
| Company | 25 years old (average) | 40 years old (average) | 55 years old (average) |
| Nationwide | $20.89 | $28.88 | $99.97 (Female only) |
| MassMutual | $18.15 | $29.58 | $122.46 |
| Haven Life | $18.15 | $25.51 | NA |
| Protective | $16.06 | $25.66 | $107.12 |
| Banner | $16.07 | $25.71 | $107.91 |
| Mutual of Omaha | $19.68 | $31.39 | $137.39 |
| Guardian | $19.53 | $31.65 | $110.49 |
| USAA | $20.82 | $30.09 | NA |
| Lincoln Financial | $17.25 | $26.36 | $114.05 |
| Penn Mutual | $16.78 | $26.48 | $110.38 |
| Transamerica | $16.99 | $35.70 | $128.68 |
| New York Life | -- | -- | -- |
*Life insurance quotes above are examples only and were collected for 30-year $250,000 term life insurance policies for non-smoking males and females ages 25, 40, and 55 in excellent health.
Life Insurance News
2022 was an excellent year for life insurance companies and some policyholders. Northwestern Mutual, MassMutual, New York Life, Guardian, Penn Mutual and many others made their largest dividend payments ever to eligible policyholders. (Dividends are typically paid to whole life insurance policyholders with mutual life insurance companies.) This could in part be due to the upward trend in written life insurance premiums over the past 10 years, according to the NAIC.
However, in spite of the increase in premiums, fewer people are reporting that they own life insurance. In fact, women are "much less likely" than men to own life insurance, according to the LIMRA and LifeHappens 2022 Insurance Barometer Study.In particular, this is a problem for parents as two in five say they are not financially secure, according to the same study.
This could be an opportunity for life insurance companies to make online sales funnels more appealing to young parents. In 2022, 95% of millennials say they researched life insurance online, but 46% still ended up buying in person.
More Ratings of Top Life Insurance Companies
- Best Life Insurance for Seniors
- Best Life Insurance Companies for People Over 50
- Best Whole Life Insurance Companies
- Best Universal Life Insurance Companies
- Best Children’s Life Insurance Companies
Frequently Asked Questions
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How Does Life Insurance Work?
Life insurance is a contract between a policyowner and an insurance company. In exchange for premium payments, life insurance companies promise to pay a death benefit to your beneficiaries if you pass away while the policy is in force. The money is received tax-free, and beneficiaries can use it for whatever purpose they choose.
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Term Life vs. Whole Life Insurance
Term is temporary life insurance coverage that is designed to expire after a set number of years, such as 30. Whole life insurance is permanent, life-long coverage. Term is cheaper than whole life, but whole life has advantages that term does not, including an internal cash value that can be used as collateral or borrowed or withdrawn from. Some whole life policies also pay dividends.
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Does Life Insurance Cover Covid-19?
Yes, life insurance companies cover death from Covid-19 if the policy is active when the insured person passes away. The life insurance industry had two record-breaking years in 2020 and 2021 for life insurance payouts (data is not yet available for 2022); with over $100 billion paid out to beneficiaries in 2021, according to the American Council of Life Insurers.
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Does Life Insurance Pay Dividends?
Yes, some life insurance policies pay dividends. Whole life insurance policies issued by mutual life insurance companies typically pay dividends annually. Dividends aren't guaranteed, but some dividend-paying life insurance companies have paid them consistently for over 100 years. You can receive them as cash or use them to pay your premium, buy more life insurance, or increase the cash value.
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Does Life Insurance Cover Suicide?
It depends. Life insurance covers suicide if it occurs after the contestable period, which typically lasts for the first two years the policy is owned. Once the contestable period is over, the life insurance policy will cover suicide and most other causes of death.
Methodology
In order to compile our list of the best life insurance companies, we developed a comprehensive life insurance methodology. We started off by researching what consumers want from life insurance companies, and for that, we looked to third-party consumer studies, including J.D. Power’s 2022 Individual Life Insurance and Annuities studies and the 2022 Insurance Barometer Study, by Life Happens and LIMRA. With those findings in mind, we considered more than 55 features on 91 life insurance companies, including ratings for financial strength by AM Best, customer satisfaction, and individual customer complaints reported to insurance state commissioners and recorded by the NAIC (National Association of Insurance Commissioners). We also considered years in business, cost, online tools, no-medical-exam options, policy types and features, and available riders.
NAIC Methodology: We considered each company's NAIC complaint index for its life insurance business by averaging those NAIC complaint index values over the past three available years (2021, 2020, and 2019).
Our review process gave preference to companies with superior financial stability, few customer complaints, and a robust suite of products and resources. In particular, we valued online quoting and application tools, transparent pricing, and no-exam policy options. Companies received ratings boosts if customer service was accessible via features like live chat. We ranked each company according to the following categories and weights. policy types and features (21%), financial stability (17%), application process (16%), customer satisfaction (15%), customer service (14%), riders and living benefits (9%), and cost (8%)
- Policy types and features: 21%
- Financial stability: 17%
- Application process: 16%
- Customer satisfaction ratings: 15%
- Customer service: 14%
- Riders and living benefits: 9%
- Cost: 8%
Costs were evaluated by collecting term life insurance quotes for 25-, 40-, and 55-year-old male and female non-smokers in excellent health for 30-year $250,000 term life policies. We used Compulife data available through Term4sale.com.
We compared individual offerings between companies by delving deeper into product specifics, including maximum coverage amounts, maximum issue ages, included riders (in particular, the number and type of living benefits available at no upfront cost) , and product-specific application processes. We used this research to determine the best companies for different products, consumer groups, and use cases.
Of the companies we considered, those with the greatest financial stability, fewest complaints, lowest cost, most generous benefits, easiest application process, most generous no-medical-exam options, and widest available features scored the highest across categories.
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