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Insurance

9 Best Life Insurance Companies

By Susan Doktor MONEY RESEARCH COLLECTIVE

Life insurance can provide the peace of mind that comes from knowing your family will be taken care of when you’re no longer there to support them.

Despite the misconception that the best life insurance is inaccessible to most of us, policies can actually be quite affordable. For example, a healthy 35-year-old female could potentially qualify for a 20-year term life insurance policy with a face value of $250,000 and pay around $18 a month.

Choosing between the best life insurance companies can be a bit overwhelming, but we’ve simplified the process. Read on to discover why we recommend these life insurance companies, and to learn more about what life insurance is and how it works.

Our Top Picks for Best Life Insurance Companies

 

Best Life Insurance Companies Reviews

 

Why we chose it: Bestow has a quick and easy online application process, and it offers a high maximum death benefit — which is not always the case for no-exam policies. Since there’s no need for a medical exam in the underwriting process, you’ll save the time and money of a doctor’s visit.

Keep in mind that Bestow only offers term life insurance — a policy that has a specific end date —  instead of permanent life insurance. However, its maximum death benefit is much more generous compared to its no-exam competitors. If approved, you could potentially receive coverage of up to $1.5 million.

To determine your premium and maximum available benefit, Bestow will ask you to answer a few simple health questions — for example, whether you’ve used nicotine products in the last 12 months.

After completing the questionnaire (which should only take a few minutes), Bestow provides you with a free quote so you can see what coverage is available for your circumstances. If you have any questions about life insurance, Bestow also boasts an extensive library of educational articles that may help answer them.

 

Why we chose it: Some life insurers offer limited coverage options for seniors or don’t cover them at all. Ethos, however, guarantees to accommodate older adults, even those who may have struggled to get coverage in the past.

Ethos claims you’re guaranteed to be approved for life insurance coverage if you’re between the ages of 66 and 85 — regardless of your health conditions and medical history. By answering a few questions online, you can receive a quote for guaranteed coverage within minutes, Ethos claims.

Ethos also offers an accelerated death benefit rider on most of its policies that lets you access part of your death benefit if you become terminally ill.

Overall, if you’re a senior citizen who’s unable to qualify for life insurance elsewhere due to age and health issues, Ethos is an option to consider.

 

Why we chose it: Policygenius allows you to compare policies side-by-side and get quotes from multiple insurers in just a few steps. You can get quotes from several insurers by filling out a single form — which can save you a lot of time and effort.

Online marketplace Policygenius works with life insurance companies such as AIG, Brighthouse Financial, Lincoln Financial Group, Pacific Life, Prudential and TransAmerica. Most of them have received high financial strength ratings from firms like Moody’s and A.M. Best.

Unlike some other online insurance brokers that offer no human interaction, Policygenius’s fully licensed agents are available via phone and live chat to answer your questions and help you find the right policy for your situation.

If you prefer to do your own research, Policygenius also has a comprehensive educational resource library for anyone who wants to learn more about life insurance.

Policygenius also sells other insurance types. That potentially makes it a good one-stop option to buy multiple policies for differing needs, and not necessarily all issued by the same insurance company.

 

Why we chose it: Haven Life offers an impressive range of term options (10, 15, 20, 25 or 30 years) along with coverage amounts up to $3 million. That helps make the company the best term life insurance provider out of those we researched.

Haven Life offers two kinds of term life insurance. Haven Simple requires no medical exam. Coverage is for up to $1,000,000 but only people between the ages of 20 to 55 may qualify. This policy also comes with additional features such as an accelerated death benefit and level premiums — which means premiums will not increase as you age.

Haven Term requires a medical exam. If you’re under the age of 65,  you can potentially qualify for a coverage amount of up to $3 million. Once approved, you’ll also have access to Haven Life Plus, an online service that allows you to create a digital will and access a membership-based fitness app.

 

Why we chose it: Ladder’s unique calling card is flexible insurance that allows you to decrease or increase coverage as your needs change. It’s an excellent choice for people who want the freedom to make changes to their insurance without having to switch companies.

Besides offering great flexibility, the most affordable Ladder policy starts at just $5 a month; that makes the company a worthy option for budget-conscious customers.

The process of applying for more coverage and increasing your monthly premium is referred to as “laddering up,” while decreasing your coverage is called “laddering down.” Both are quick and easy to do on Ladder’s website, which auto-fills most of your information.

There’s no limit to how many times you can ladder up or down. You can also cancel coverage at any time, with no further strings attached.

 

Why we chose it: State Farm should be a top choice if customer satisfaction is a high priority for you when buying life insurance. In 2021, the company was the highest-ranking life insurance provider in J.D. Power’s customer-service ranking, which is based on customer responses.

State Farm has long been known for its excellent customer service. Its top ranking for serving customers in the most recent J.D. Power life insurance study only underlines that reputation. Besides this accomplishment, the company has received high marks for financial stability as well, securing an A++ (superior) rating from AM Best.

In addition to impressive financial strength and customer satisfaction, State Farm also offers a wide variety of insurance products, including term, whole, universal and variable universal life insurance.

 

Why we chose it: New York Life offers numerous life insurance options of the permanent type – that is, that do not expire and include an investment component. The company also offers supplemental insurance options — such as long-term care insurance — to make sure your needs are covered in retirement.

Another appealing feature to New York Life is its flexible approach to policy conversion. If your financial situation changes and you need permanent coverage, you can convert your term life coverage to a whole life policy with little effort.

Also, because New York Life is a mutual insurance company, policyholders are also shareholders. That allows customers to potentially receive dividends from that ownership interest.

Keep in mind, though, that if you’d like to purchase a New York Life policy, you’ll have to go through a local agent instead of directly purchasing it online.

 

Why we chose it: Unlike most other companies that issue multiple types of insurance, Nationwide offers bundling discounts that apply to life insurance. And if you already have a mortgage or savings account with Nationwide, you could receive a 15% discount on your life insurance policy.

Besides offering several discount options, Nationwide also allows you to tailor your term or permanent life insurance coverage through optional riders.

Moreover, the company has been recognized by AM Best and J.D. Power for its outstanding financial stability and high customer satisfaction ratings. That makes it a great choice for budget-conscious customers looking for a reliable insurer.

 

Why we chose it: When it comes to finding the right life insurance policy, customization is key. With a more extensive array of rider options than almost any other carrier, Northwestern Mutual earns our nod for providing the best coverage customization.

Some of Northwestern Mutual’s policies include the option to add a waiver of premium rider, which allows you to stop paying premiums if you become disabled. There’s also an additional purchase benefit that allows you to increase your death benefit at future dates without having to reapply for coverage.

Because Northwestern is a mutual company, it generally pays dividends to its policyholders. This means you could receive a return on a portion of the premiums you’ve paid.

 

Other Life Insurance Companies We Considered

In our analysis, the best life insurance companies are those that have great customer service ratings, are financially stable, offer a wide variety of products, pay claims on time and have a straightforward underwriting process.

We considered the companies below when conducting our research. However, we ultimately decided not to include them in our top picks. Overall, they didn’t quite match the advantages of the companies on our list. But they may be worth exploring, especially if their listed pros have appeal for you.

Lemonade

Sproutt

Health IQ

MassMutual

Guardian Life

USAA

Mutual of Omaha

Liberty Mutual

Lincoln Financial

Life Insurance Guide

What should you look for in a life insurance company?

When it comes to choosing the best life insurance plan and carrier for you, there are a few key steps to take.

Research your policy options: There are two different kinds of insurance: term and permanent. The permanent life insurance category comprises several insurance types, including universal life, variable life, universal life and indexed universal life. Each type of permanent life insurance has its own pros and cons. Determining which kind of life insurance is right for you is an essential pre-purchase step. The best life insurance companies have staff who can help you evaluate your options. You can also ask an independent insurance agent to educate you and figure out your insurance needs.

Ease of application: Nowadays, many insurance companies provide a quick, online application process — particularly if you’re purchasing term life insurance. Other companies make it a little more complicated. But don’t let ease of application be the determining factor when deciding which insurer or type of policy you choose. You may have to jump through a couple of hoops to get the best coverage and the best value for your insurance dollars.

Financial stability: Look into the company to make sure it’s financially stable. You want to be sure the insurer you choose will be able to pay your beneficiaries in the event of your death. To do so, you can check the financial strength ratings of the company with organizations like Fitch, Standard & Poor’s and A.M. Best.

Customer service: Life insurance policies are confusing. Sometimes you need to talk to an expert, whether you’re choosing a policy initially or updating your coverage. Make sure to choose a company that’s available to support you — and has a reputation for providing high-quality customer service.

Reputation: Checking Better Business Bureau, Trustpilot and Google ratings and reviews is a good way to get a feel for how a company treats its customers. Look for both positive and negative patterns in the reviews. Is the company responsive? Do customers experience billing problems? Are claims paid quickly? Those are just a few of the factors you should look out for when evaluating a company’s reputation.

Underwriting practices: Life insurance underwriting is the term used to describe the process whereby life insurance companies evaluate the risk of insuring an individual. Evaluations are based on several common factors, but the process isn’t the same from insurer to insurer. For example, underwriting doesn’t alway involve a medical exam. Your choice of insurer may be influenced by how it underwrites its policies.

Premiums: Once you know the type of coverage you want, get life insurance quotes from different providers to find the best rate. Keep in mind that lower life insurance rates don’t always mean you’re getting the right coverage for your needs, so make sure you understand the terms of your policy. And if you want to compare quotes but don’t have time to do the legwork, an independent agent or life insurance broker could be an option.

Riders and add-ons: Life insurance policies aren’t one-size-fits-all. And standard policies can be amended with optional riders to better meet your needs. Accidental death riders, for example, allow for a higher-than-face-value pay out when the policy holder dies by accident. A waiver of premium rider prevents you from having to pay premiums if you are permanently disabled and lose your income. Find out what kind of riders an insurer offers to help you customize a policy to your specific concerns.

Renewability: Some term life insurance policies are renewable: when your term ends, you can sign up for a new term automatically, usually without a medical exam. Choosing a renewable short-term policy when you’re young and healthy is one way to reduce your premiums. But bear in mind that your renewed policy is likely to come with higher premiums since the risk of your dying increases with age.

Exclusions and limitations: All life insurance policies come with exclusions. There are few types common across policies. For example, a war-time peril exclusion might be concerning if you’re a journalist who reports from countries that are at war. If skydiving is your thing, you may want to look out for an aviation and sky diving exclusion. Some policies come with a dangerous activity exclusion. So if you’re a motorcycle enthusiast or a rock climber, those policies might be a full stop for you. Incidentally, many policies won’t pay out if you take your own life or die while pursuing an illegal activity.

Regardless of the policy type you purchase, remember that the younger (and the healthier) you are when you purchase life insurance, the lower your premiums will be. This can save you a good chunk of change in the long run.

What are the different types of life insurance?

Term life insurance

An insurance policy that provides coverage for a set period of time, usually 10, 20 or 30 years.

Whole life insurance

A type of permanent life insurance policy that covers the policyholder for their lifetime. It includes a guaranteed cash value component in addition to the death benefit. If you access the cash value of your policy, your death benefit will decrease by the same amount.

Universal life insurance

Another type of permanent life insurance that includes a death benefit and a cash value component. However, the cash value feature in universal life insurance policies is subject to market fluctuations and therefore isn’t guaranteed.

Comparing Coverage Types

Consider the different types of life insurance policies and optional riders available.

Term life insurance, for example, provides protection for a set number of years, while permanent life insurance policies offer lifelong protection. Depending on your age, health and income, one may make more financial sense than the other.

If you’re young and relatively healthy but don’t have much disposable income, term life insurance — the more affordable option — might make more sense. But if you have enough disposable income and want long-term coverage that lasts throughout your golden years, a permanent policy — such as whole life insurance — might be for you.

Here’s a comparison of the term life compared with two leading types of permanent insurance – whole life and universal life.

Term life insurance Whole life insurance Universal life insurance
Types of term life insurance:

  • Level term
  • Yearly-renewable
  • Decreasing
 Types of whole life insurance:

  • Participating
  • Non-participating
  • Guaranteed Issue
  • Indeterminate
  • Economatic
  • Limited payment
  • Single-premium
  • Modified
 Types of universal life insurance:

  • Traditional (non-guaranteed)
  • No-lapse guaranteed
  • Variable
  • Indexed

Who needs life insurance?

Most often, the impetus for buying life insurance is to provide financial protection for someone you care about who will survive you. If you have dependents who rely on you financially and you want to ensure that they enjoy financial security, then you need life insurance.

Many financial advisors recommend buying life insurance when you are young and healthy because coverage costs less. If you have young children, buying life insurance is the responsible thing to do. But changes in your life circumstances may make buying life insurance an important move at any time in your life.

What should life insurance cover?

If you’re the primary breadwinner in your family, life insurance can contribute in several ways to the financial stability of your family.

The proceeds from a policy can serve as income replacement or an inheritance for your family. Your dependents could use the death benefit to pay for day-to-day expenses, medical bills, your mortgage, childcare costs, utilities, education and other expenses related to maintaining their quality of life.

The payout from a policy can also pay outstanding debts and cover your end-of-life expenses. The latter expenditure can be substantial. According to the National Funeral Directors Association (NFDA), the average cost of a funeral in 2021 was approximately $7,848.

How much does life insurance cost?

There’s no short answer to that question. The cost of coverage varies from insurer to insurer. Other choices you make, such as your coverage limits and, in the case of term life insurance, the term of your policy (usually 10 to 30 years) also influence premium prices. Your age and health history at the time of application are a key determinant of your life insurance premiums.

Generally, term life insurance is less expensive than whole life insurance. That’s because term life policies have no value at the end of their term. Whole life policies have a death benefit but also accrue a cash value that, if you wish, you can eventually tap into while you are living.

Life Insurance Glossary

  • Underwriting: This refers to the process of assessing your life insurance application and determining your rate. The underwriter takes into account your age, health, gender, and other factors to determine how much your policy will cost. Typically, those with high-risk health profiles will have to pay higher premiums.
  • Insurance rider: Optional benefits you can add to your insurance policy to increase or modify coverage — for an added cost. Some of the most common riders include accelerated death benefits and a waiver of premium.
  • Beneficiary: The person or entity that is entitled to receive the death benefit from your life insurance.
  • Contestability period: During the first two years of your insurance policy — also referred to as the contestability period — the insurer can dispute or refuse to pay out a claim if it uncovers evidence of deception.
  • Death benefit: The amount of money the beneficiary receives from the insurance company when the policyholder passes away.
  • Accelerated death benefit: A provision available with many policies (sometimes as a rider) that allows policyholders to access a portion of their death benefit while they are living, such as in the case of a terminal illness.

How We Found the Best Life Insurance Companies

As part of our methodology for choosing the best life insurance companies, we assessed insurers based on the following:

  • Ability to pay claims as evidenced by third-party financial strength ratings
  • Customer complaints against the company’s life insurance products based on data from the National Association of Insurance Commissioners (NAIC)
  • Range of insurance policies available
  • Ease and user-friendliness of the underwriting process

Summary of the Best Life Insurance Companies

Susan Doktor

Susan Doktor is a journalist, business strategist, and veteran homeowner. She writes on a wide range of personal finance topics, including mortgages, real estate, and home improvement. Follow her on Twitter @branddoktor.