Best Universal Life Insurance Companies of 2022

Northwestern Mutual is our pick for the best universal life insurance company

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91 Companies reviewed
55 Features considered
5 Awarded "Best of 2022"

If you’re looking for life insurance that can increase in value based on current interest rates or stock market performance, a universal life insurance policy might be a good fit. Universal life (UL) insurance provides lifetime protection and cash value that can be used to adjust your premiums, or even eliminate the premium altogether. To get a universal life insurance quote, you'll need to call an agent directly since quotes aren't generally available online.

Best Universal Life Insurance Companies of 2022

Best Universal Life Insurance Companies of 2022
Best Universal Life Insurance Companies of 2022

Best Overall : Northwestern Mutual


  • 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
Pros and Cons
Pros
  • Superior financial strength

  • 165 years in business

  • Ranked highly for customer satisfaction

  • Very few complaints

Cons
  • Limited policy details online

  • No IUL policies

Why We Chose It

Not only is Northwestern Mutual the largest life insurance company with about 7.5% of the total market share, but it’s also one of the oldest insurers, with 165 years in business.

Northwestern Mutual stands out for its superior third-party ratings. It has the highest financial strength ratings from AM Best (A++), Moody's (Aaa), and Fitch (AAA), and was ranked 3rd out of 21 companies for overall customer satisfaction by J.D. Power. Northwestern Mutual also has one of the lowest complaint indexes of the 91 companies we reviewed.

The company sells traditional UL and VUL policies. Like most UL policies, the Custom UL policy has a flexible death benefit and adjustable premiums and builds cash value on a tax-deferred basis. The company’s VUL policy is similar, but lets you invest the cash value in a wide range of mutual-fund-like subaccounts, with features like automatic portfolio rebalancing and automatic dollar-cost averaging. You can also select one of four different allocation models based on risk. 

VUL policies are typically more expensive than regular UL policies because of investment fees.

The main drawbacks are that Northwestern provides fewer details on its website compared to most of its competitors and you’ll need to look elsewhere for IUL.

Best Variable Universal Life Insurance : Nationwide


  • 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
Pros and Cons
Pros
  • No medical exam for some healthy applicants

  • Few customer complaints

  • Highly rated for customer satisfaction

  • Three living benefits included

Cons
  • No live chat

Why We Chose It

Nationwide’s VUL products have a lot of perks. You can invest in a wide range of funds, choose from three indexed interest strategies plus two fixed accounts, take advantage of Nationwide’s premium monitoring tools, and be enrolled in Nationwide’s VUL rewards program. Additionally, the company includes three living benefits—for chronic, critical, and terminal illnesses—at no upfront cost. It also makes a generous long-term care rider available should you want the option of using the death benefit for long-term care needs. 

Nationwide offers two variable universal life (VUL) policies—Variable Universal Life Accumulator and Variable Universal Life Protector—plus one designed exclusively for financial advisors. For an extended no-lapse guarantee, choose VUL Protector. You can get traditional UL and IUL insurance through Nationwide as well.

Applicants who meet certain criteria may be able to purchase without a medical exam: Accelerated underwriting is available for individuals under 50 applying for $5 million or less, and for individuals under 60 applying for $1 million or less.

We also like that Nationwide has excellent third-party ratings. The company is ranked second out of 21 companies for overall customer satisfaction in J.D. Power’s 2021 U.S. Individual Life Insurance Study. It also has an A+ (Superior) financial strength rating from AM Best.

Best Indexed Universal Life Insurance : Mutual of Omaha


  • 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
Pros and Cons
Pros
  • Many policies include three living benefits

  • Wide range of optional riders

  • Excellent financial strength

  • Quick-issue IUL available

  • Live chat available

Cons
  • No VUL policies

Why We Chose It

If you’re looking for an indexed universal life (IUL) policy, we recommend checking out Mutual of Omaha. In addition to regular UL, the company offers two IUL policies—Life Protection Advantage and Income Advantage. Both are straightforward and relatively easy to understand. Your cash value is tied to the performance of the S&P 500 based on an annual point-to-point crediting method. And each lets you choose between three indexed-interest crediting strategies, including one with no cap. 

With Income Advantage, your cash value has the greatest potential for growth. Life Protection Advantage provides additional guarantees, such as a short-term and long-term no-lapse protection rider—neither are available with Income Advantage.

In addition, both of Mutual of Omaha’s IUL policies include living benefits for terminal and chronic illnesses, plus a guaranteed refund option rider for eligible applicants. You can also add a long-term care rider plus standard riders for a fee, such as a guaranteed insurability rider, child term rider, disability income rider, and accidental death rider. The riders available will depend on the specific policy and your location.

To get an IUL or UL policy from Mutual of Omaha, you must work with an agent to get a quote and apply. 

Best Reputation : State Farm Life Insurance


  • 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
Pros and Cons
Pros
  • Highly rated for customer satisfaction and financial stability

  • Few customer complaints

  • Multiple riders for UL policy customization

  • Savings for bundling life insurance with auto insurance

  • Superior financial strength

Cons
  • No free living benefits riders

  • No IUL or VUL policies

Why We Chose It

State Farm has the best reputation out of the UL companies we reviewed. In J.D. Power’s 2021 U.S. Individual Life Insurance Study, State Farm beat 20 other life insurance companies in customer satisfaction. It also has an A++ (Superior) financial strength rating from AM Best—the highest grade possible—and fewer complaints than expected for its size.

State Farm offers traditional UL policies for applicants up to age 85. You can customize your policy with a handful of riders, including a long-term care rider, term rider, children’s term rider, waiver of premium rider, and guaranteed insurability rider (these cost extra). Unfortunately, this policy doesn’t include any free living benefit riders, which is uncommon among our other top-rated companies.

Another thing we like about State Farm is its generous policy bundling discounts. You can qualify for savings if you purchase a life insurance and auto insurance policy together. According to State Farm, bundling your policies can help you save up to $1,127 on the combined premium.

Best for No-Medical-Exam : Penn Mutual


  • 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
Pros and Cons
Pros
  • No-medical-exam policies available

  • Very few customer complaints

  • Living benefits riders included with most policies

  • UL, IUL, and VUL policies available

Cons
  • Limited website information

Why We Chose It

Penn Mutual leads the pack in terms of how much coverage it’s willing to provide without a medical exam. Via Penn Mutual’s Accelerated Client Experience (ACE) program, healthy applicants between 20 and 65 years old can qualify for up to $7.5 million without taking an exam. Accelerated underwriting is available on a variety of Penn Mutual UL policies, including Guaranteed Protection UL, Protection UL, Accumulation Builder Flex IUL, and Diversified Advantage VUL.

Eligible policies include terminal and chronic illness riders included at no upfront cost. Other endorsements are available, including an accidental death benefit rider, additional insured term rider, children’s term rider, and waiver of premium rider, for a fee.

In terms of third-party ratings, Penn Mutual fares well.  It has an A+ (Superior) financial strength rating from AM Best and fewer complaints than expected for its size. However, the company doesn’t provide policy specifics on its consumer-facing website. We’d like to see more transparency so you can better compare products before supplying your personal information.

Compare the Best Universal Life Insurance Companies of 2022

Overall Rating Best For
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.
Term Life Sample Cost
Policy Types
Accepts Credit Cards
Reset All
Northwestern Mutual Best Overall A++ N/A Term, Universal (UL), Variable Universal (VUL), Whole No Get A Quote
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Nationwide Best Variable Universal Life Insurance A+ $26.25/month Final Expense, Indexed Universal (IUL), Term, Universal (UL), Variable Universal (VUL), Whole Yes Get A Quote
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Mutual of Omaha Best Indexed Universal Life Insurance A+ $28.38/month Final Expense, Indexed Universal (IUL), Term, Universal (UL) Yes Get A Quote
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State Farm Life Insurance Best Reputation A++ $35.24/month Final Expense, Term, Universal (UL), Whole Yes Get A Quote
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Penn Mutual Best for No-Medical-Exam A+ $23.92/month Term, Universal (UL), Variable Universal (VUL), Whole Yes Get A Quote
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*Quotes above are examples of what a 40-year-old in excellent health might pay for a 30-year $250,000 policyGet life insurance quotes from multiple companies to find your best rate.

Final Verdict

All of the above companies are worth investigating if you’re looking for a universal life insurance policy. But the type of policy you want—UL, IUL, or VUL—will partly dictate your options. Nationwide and Penn Mutual offer all three, and are excellent places to start. Northwestern Mutual does not offer an IUL policy at this time, but it offers traditional and VUL policies and has the strongest financial position of all companies on this list (and most in the market). Plus, it along with Nationwide and State Farm were ranked very highly for customer satisfaction by J.D. Power. For IUL, compare Mutual of Omaha’s offerings to those from Nationwide and Penn Mutual. 

FAQ

What Is Universal Life Insurance Coverage?

Universal life insurance (UL) is a type of permanent life insurance that has flexible premiums and an adjustable death benefit. It also builds cash value, which can be borrowed or withdrawn while the policyholder is still alive. UL comes in several different varieties, including traditional universal life, indexed universal life (IUL), and variable universal life (VUL).

Is Universal Life Insurance the Same as Whole Life Insurance?

Universal life insurance and whole life insurance share some similarities, but they are not the same. While both policies build cash value and are designed to provide lifetime protection, whole life insurance has fixed premiums and a fixed death benefit. Universal life insurance has flexible premiums, an adjustable death benefit, and a cash value that is sensitive to interest rates. In other words, a UL policy could lapse if interest rates don’t perform as anticipated.

People looking for guaranteed protection might find that a whole life policy is more suitable, despite the higher cost.

How Does Universal Life Differ From Term Life Insurance?

Universal life insurance and term life insurance serve different purposes. Term life insurance offers temporary protection, with coverage ranging from 10 to 40 years. If the policyholder passes away during the term, their beneficiary receives the death benefit. If the policyholder outlives the term (and has not renewed or converted the policy), the benefit expires. Term life policies have level premiums, a guaranteed death benefit, and do not accumulate cash value.

Unlike term life, universal life insurance offers lifetime protection and pays out whenever the policyholder passes away. This policy has flexible premiums, an adjustable death benefit, and builds cash value. At a young age, universal life insurance tends to be more expensive than term life insurance, but term life premiums increase as you get older.

What Are the Expected Costs of Universal Life Insurance?

The cost of universal life insurance is different for everyone who applies. Some of the factors that contribute to your premium include:

  • Age
  • Health
  • Tobacco use
  • Coverage limit
  • Type of policy

It’s important to keep in mind that aside from your personal attributes, such as age and health, the type of policy also dictates how much you’ll pay. For example, VUL policies are generally more expensive than either traditional UL or IUL policies because they incorporate mutual funds, which come with their own expenses. Also, don’t overlook the surrender charge. Though not an upfront cost, it’s a penalty you’ll pay if you want to cash out of the policy early. Surrender charges may last anywhere from a few to 20 years, depending on the product and the insurer.

Is Universal Life Insurance Worth It?

If you’re looking for a flexible life insurance policy with lifetime protection, universal life insurance might be worth it. It can also be a good choice for people who want access to cash value, which can be borrowed or withdrawn tax-free to cover various expenses.

To protect the policy as you age, many companies allow you to add a no-lapse guarantee rider. This guarantees that your policy won’t lapse as long as a minimum premium amount is paid. This is one way to get more protection out of a UL policy, similar to what whole life insurance provides. But if you need permanent coverage with an iron-clad guarantee, whole life is likely a better option.

How We Chose the Best Universal Life Insurance Companies

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 2021 U.S. Life Insurance New Business Study and the 2021 Insurance Barometer Study, by Life Happens and LIMRA. 

With those findings in mind, we gathered more than 50 data points on 91 life insurance companies, including ratings for financial strength, customer satisfaction, and customer complaints, as well as information about years in business, cost, online tools, no-exam options, policy types and features, and available riders. 

Our review process gave preference to companies with superior financial stability, few customer complaints, and a robust suite of products and resources.

We compared individual offerings between companies by delving deeper into product specifics, including maximum coverage amounts, maximum issue ages, included riders, and how the cash value is invested (for permanent products). We used this research to determine the best companies for different products and consumer groups, including term life insurance and the best universal life insurance companies.