Life insurance plays a vital role in estate planning and providing financial security to your loved ones after your passing. It can offer various benefits, depending on the type of policy you choose. Whether you opt for a term life policy with coverage for a specific period or a permanent policy that provides lifelong protection, it is crucial to start by comparing different life insurance companies.
Finding the right life insurance company and policy can be overwhelming, given the plethora of options available in the market. To simplify your search, our team of insurance experts has conducted a thorough review of rates, features, and other essential metrics. Based on our analysis, we have identified the best life insurance companies that stand out from the rest.
Compare the best life insurance companies of 2023
|COMPANY||OUR RATING||AM BEST FINANCIAL STRENGTH RATING|
|Protective||5.0 stars||A+ (Superior)|
|Pacific Life||5.0 stars||A+ (Superior)|
|Corebridge Financial (Formerly AIG)||4.5 stars||A (Excellent)|
|Penn Mutual||4.5 stars||A+ (Superior)|
|MassMutual||4.0 stars||A++ (Superior)|
|Lincoln Financial||4.0 stars||A (Excellent)|
|Transamerica||4.0 stars||A (Excellent)|
|Symetra||4.0 stars||A (Excellent)|
Best term life insurance companies of 2023
Term life insurance provides the option to lock in rates for a specific duration, commonly 10 or 20 years. However, once the level term period ends, policyholders may face significant rate increases when renewing their policy on a yearly basis.
When seeking term life coverage, it is essential to obtain quotes from various insurers to find the best options. Two highly-rated companies to consider are Symetra and Pacific Life, both offering term life insurance products that have earned a 5-star rating in our evaluation of the top term life insurance providers.
|COMPANY AND POLICY||TERM LIFE INSURANCE RATING||COVERAGE AMOUNTS||AM BEST FINANCIAL RATING|
|Symetra SwiftTerm||5.0 stars||$100,000 to $3 million||A+ (Excellent)|
|Pacific Life PL Promise Term||5.0 stars||$50,000 minimum||A+ (Superior)|
|Protective Classic Choice Term||4.5 stars||$100,000 minimum||A+ (Superior)|
|Haven Term||4.5 stars||$100,000 to $3 million||A++ (Superior)|
|Penn Mutual Non-convertible Term||4.5 stars||$250,000 minimum||A+ (Superior)|
|Banner Life OPTerm||4.0 stars||$100,000 to $65 million||A+ (Superior)|
|Corebridge Financial Select-a-Term||4.0 stars||$100,000 to $41 million||A (Excellent)|
|Transamerica Trendsetter Super||4.0 stars||$25,000 minimum||A (Excellent)|
|Midland National Premier||4.0 stars||$100,000 minimum||A+ (Superior)|
Best whole life insurance companies of 2023
Whole life insurance is a type of permanent coverage that provides protection for your entire life, as long as you continue paying your premiums. Moreover, this policy often builds a cash value that you can access during your lifetime.
In our assessment of the top whole life insurance companies, State Farm stands out with the highest rating. However, to initiate your search for a suitable whole life policy that fits your requirements and budget, it’s recommended to obtain quotes from various insurers listed in the table below.
|COMPANY||WHOLE LIFE INSURANCE RATING||AM BEST FINANCIAL STRENGTH RATING|
|State Farm||5.0||A++ (Superior)|
|Northwest Mutual||4.5||A++ (Superior)|
|Ohio National||4.5||A (Excellent)|
|Penn Mutual||3.5||A+ (Superior)|
Best no-exam life insurance companies of July 2023
No-exam life insurance offers a convenient option for purchasing life insurance without undergoing a medical exam during the application process. However, this convenience may come at the cost of higher insurance rates. To help you make an informed decision, we have compiled a list of the best no-exam life insurance policies based on various factors.
Opting for life insurance without a medical exam can be an attractive choice for those who want a hassle-free application process. Nevertheless, it’s essential to be aware that the premiums for these policies might be higher compared to traditional life insurance plans. To assist you in finding the most suitable option, we have carefully evaluated and rated the top no-exam life insurance policies available in the market.
|COMPANY AND POLICY||NO-EXAM LIFE INSURANCE RATING||MEDIAN TIME TO APPROVAL|
|Banner Life OPTerm||5.0 stars||8 days|
|Lincoln Financial Term Accel||5.0 stars||5 days|
|Brighthouse Simplified Issue Term||4.0 stars||Same day|
|Transamerica Trendsetter Super||4.0 stars||12 days|
|Ethos Term Life||4.0 stars||Instant|
|SBLI Level Premium Term||4.0 stars||29 days|
Cheapest life insurance companies of 2023
When searching for life insurance, it’s crucial to explore different options to find the best fit for your needs. By comparing various policies, you increase the likelihood of discovering an affordable plan that aligns with your budget and requirements.
|COMPANY AND POLICY||AVERAGE COST OF A $250,000, 20-YEAR TERM LIFE POLICY|
|Female age 30||Male age 30|
|Banner Life OPTerm||$129||$146|
|Protective Classic Choice||$129||$146|
|Corebridge Financial Select-a-term||$130||$147|
|Pacific Life PL Promise Term||$130||$147|
|Transamerica Trendsetter Super||$130||$148|
|Penn Mutual Non-convertible Term||$131||$148|
How to choose the best life insurance company
When shopping for life insurance, you need to consider various factors to narrow down your options. The availability of policies and products can differ between insurers. Some companies may offer both term and permanent life insurance, while others might specialize in specific types. For example, Symetra only sells term and universal life insurance, excluding other options like whole life insurance.
Even if multiple insurers offer the same type of coverage, there can be differences in their offerings. Term life insurance policies may vary in terms of duration, ranging from 30 years to as long as 40 years for eligible individuals, such as those offered by Protective.
Rider availability is another aspect that varies among insurers. Most companies provide riders, but the specific options can differ. Some policies may automatically include certain riders, while others might charge you an extra fee for them. For instance, Pacific Life includes a terminal illness rider in some of its policies.
Financial strength is crucial when selecting a life insurance company to ensure your beneficiaries receive the death benefit when you pass away. Companies’ financial strength is assessed by entities like AM Best, Standard & Poor’s, and Moody’s. They evaluate factors such as balance sheet strength, enterprise risk management, and operating performance to determine the insurer’s financial strength rating (FSR). Ratings range from A++ (Superior) to D (Poor), indicating the insurer’s ability to pay out life insurance claims.
All of the life insurance companies in our rating have an A (Excellent) or higher financial strength rating from AM Best, instilling confidence in their ability to fulfill their obligations to policyholders.
What is life insurance?
Life insurance serves as a valuable financial safeguard for your loved ones after your passing. When the policyholder dies, the life insurance policy pays a death benefit to the designated beneficiary.
The beneficiary has the freedom to utilize the death benefit in various ways. They might choose to use the money for practical needs like mortgage payments, tuition, utilities, or groceries.
Besides being a financial security measure, life insurance can also play a role in estate planning. The death benefit can be employed to cover expenses related to end-of-life arrangements, such as burial or cremation costs.
Two primary types of life insurance exist: term life insurance and permanent life insurance. Term life insurance offers coverage for a specific term with locked-in rates, while permanent life insurance provides coverage for your entire lifetime. Additionally, various forms of permanent life insurance, like whole life, universal life, and variable life insurance, cater to different needs and preferences.
Types of life insurance
Life insurance can be categorized into two main types: term life insurance and permanent life insurance. To make an informed decision when searching for the right life insurance policy, it’s crucial to have a clear understanding of both options. Each type offers different benefits and features, catering to various individual needs and financial goals.
Term life insurance
Term life insurance, also known as temporary coverage, provides level premiums for a set time frame, usually ranging from 10 to 30 years, and some insurers may offer even longer terms.
During the term, if you pass away while your policy is active, your chosen beneficiary will receive the policy’s death benefit. However, it’s essential to be aware that after the term expires, you can typically renew your coverage, but the renewal rate is likely to be significantly higher.
Suppose you do not renew your policy and pass away after the term has ended. In that case, your beneficiary will not receive a death benefit, highlighting the importance of timely renewal and considering your long-term coverage needs.
Compared to permanent life insurance, term life insurance is usually more affordable. One significant difference is that term life policies do not accumulate cash value over time, which may be a factor to consider when making your insurance choices.
Whole life insurance
Whole life insurance is different from term life coverage. Unlike term life, which is temporary, whole life insurance provides permanent coverage throughout your lifetime, as long as you keep up with premium payments.
One unique feature of whole life policies is the ability to accumulate cash value over time. Each premium payment contributes to this cash value, which can be accessed later on to support retirement, pay premiums, or fund a child’s education.
With whole life coverage, you enjoy the benefit of guaranteed premiums and death benefits. Additionally, the cash value accumulates at a fixed rate. However, due to these features, whole life insurance tends to be considerably more expensive than term life coverage.
Universal life insurance
Universal life insurance, like whole life coverage, is a permanent insurance option that often comes with a cash value component. Its appeal lies in its flexibility compared to whole life insurance, as it allows policyholders to modify their premium and death benefit.
Different types of universal life insurance offer varying degrees of flexibility and risk. Guaranteed universal life insurance provides a fixed death benefit and steady premiums, although it offers less flexibility. On the other hand, index universal life and variable universal life policies come with adjustable premiums and death benefits. However, their cash value gains and losses are tied to market performance (index universal) or individual investment choices (variable universal), which can lead to higher gains but also expose the policyholder to potential losses.
When considering universal life insurance, it’s crucial to weigh the pros and cons carefully. While it presents opportunities for growth and financial planning, there are inherent risks involved. Consulting with a financial advisor is a prudent step to understand these potential risks and to develop a plan that aligns with your retirement goals. Their guidance can help you make informed decisions and create a policy that suits your unique needs.
Variable life insurance
A variable life insurance policy is a combination of a death benefit and an investment element. The cash value of the policy functions as a savings account, giving you the opportunity to invest in stocks, bonds, mutual funds, or money market funds for potential growth. While these policies offer the potential for higher returns compared to others, they also come with higher risk, as the account value may decrease if your investments perform poorly.
Unlike variable universal life insurance, variable life insurance does not offer flexible premiums. However, it does allow for fluctuations in the death benefit amount, ensuring it won’t fall below the specified policy amount. This feature provides a level of stability in terms of the death benefit, regardless of investment performance.
No-exam life insurance
When applying for life insurance, the standard process involves a review of your medical history and a physical examination with lab tests. However, there are alternative options available for obtaining coverage without the need for a medical exam.
Guaranteed issue policies, also known as final expense plans, fall under the category of permanent life insurance. They typically offer a small death benefit, often $25,000 or less, and do not require medical exams. These policies are guaranteed, meaning they are available without regard to the applicant’s health or medical background, but they may only be accessible to specific age groups, usually individuals aged 45 or older.
Simplified issue policies represent another option that doesn’t necessitate medical exams and generally provide a quicker route to obtaining life insurance. For this type of policy, applicants usually need to complete a health questionnaire. The insurer might also use third-party sources to gather information about relevant risk factors, such as prescription drug usage history.
Other types of life insurance
Life insurance comes in various specialized types, which you might want to consider based on your financial situation and the purpose of seeking coverage.
Mortgage life insurance
Mortgage life insurance, also called mortgage protection insurance, is tailored to pay off your mortgage upon your death. Premiums remain constant throughout the policy, and the coverage aligns with your mortgage duration. As you pay down your loan, the coverage amount decreases. However, it’s essential to note that the death benefit goes to the mortgage lender, not your chosen beneficiaries.
Burial insurance, also known as final expense insurance or funeral insurance, is a form of whole life insurance intended to cover the costs associated with your funeral and final expenses. This type of policy generally offers coverage between $5,000 to $25,000 and can also be used to address other expenses, like legal services, outstanding loans, credit card debt, or medical bills.
Survivorship life insurance
Survivorship life insurance, also referred to as second-to-die life insurance, provides permanent coverage for two individuals, usually spouses. It offers a single death benefit that is only paid out after the second person covered by the policy passes away. For instance, if a couple buys a survivorship policy with their child as the beneficiary, the child won’t receive the death benefit until both parents have passed away. Survivorship life insurance is often available as whole or universal life insurance policies and may have a cash value component.
Supplemental life insurance
Supplemental life insurance, sometimes called group life insurance, is a policy offered for free or at a low rate through your employer. This coverage is linked to your job and is typically a benefit of your employment. While you remain with your employer, you will be covered, but if you leave your job, the coverage typically ends.
Which type of life insurance is the most popular?
According to recent data from LIMRA, term and whole life insurance accounted for a significant 86% of sales during the first three quarters of 2022. Term life insurance, being more affordable, remains a top choice for individuals and families seeking protection for their loved ones while staying within budget constraints.
On the other hand, whole life insurance, although pricier, has its appeal among those in search of permanent coverage. The straightforward nature of whole life policies attracts individuals who value the long-term security and benefits they offer.
Who needs life insurance?
Life insurance plays a crucial role in securing the financial future of your family and loved ones in the unfortunate event of your passing. This is especially important if there are individuals who depend on you financially.
- Primary wage earners need to consider life insurance seriously. The LIMRA 2022 Insurance Barometer highlights that losing the primary earner can lead to financial difficulties within a short span. With life insurance, you can ensure your family maintains their current lifestyle even if something happens to you.
- Life insurance is not only for those with active careers but also for stay-at-home spouses. Having coverage for the stay-at-home partner is prudent because their contributions are invaluable. If they were to pass away, the working spouse may face challenges affording childcare and other services their partner provided.
- Caregivers, who offer financial or physical support to loved ones like children, siblings, or parents, should also consider life insurance. By having this coverage, they can provide for ongoing care in case of their untimely demise, easing the burden on their dependents.
How to choose the best type of life insurance
When deciding on the type of life insurance that suits you best, it’s crucial to ask yourself some fundamental questions.
Term Life Insurance vs. Permanent Coverage:
One primary consideration is whether you should opt for term life insurance or permanent coverage. Term life insurance is often seen as the more affordable choice, offering larger coverage amounts for a lower premium. It is ideal for those who only need coverage for a specific period, such as while they have dependents or to cover mortgage expenses. On the other hand, permanent life insurance may be more expensive, but it comes with benefits like a cash value that grows tax-deferred over time and the ability to lock in coverage and premium rates for life.
Determining the Coverage Amount:
The amount of coverage your family needs depends on various factors, such as your current income and how long your family will require financial support. Calculating expenses like mortgage or education costs can help you determine the appropriate death benefit. Websites like Life Happens offer life insurance calculators to assist with this task.
Considering Your Budget:
Your budget plays a significant role in choosing the right life insurance policy. If you have limited resources, term life coverage is a more budget-friendly option compared to permanent coverage. However, if you have long-term financial goals, such as building cash value for retirement, permanent life insurance might be a better fit.
Understanding the Cost of Life Insurance:
The cost of life insurance can be a common concern for many individuals. However, it’s often overestimated. Term life insurance generally comes with the lowest premiums, while permanent coverage options tend to be more expensive due to their additional features.
Factors Affecting Your Premium:
Several factors influence the premium you’ll pay for life insurance. These include your age, gender, smoking status, health history, prescription use, family medical background, driving record, criminal record, occupation, and hobbies. Considering these factors can help you understand how the insurance company determines your premium.
Average annual cost of coverage for females by insurer
|COMPANY||$250,000 WITH A 20-YEAR TERM||$500,000 WITH A 20-YEAR TERM||$1 MILLION WITH A 20-YEAR TERM|
|Rates are based on a 30-year-old female in good health.|
Average annual cost of coverage for males by insurer
|COMPANY||$250,000 WITH A 20-YEAR TERM||$500,000 WITH A 20-YEAR TERM||$1 MILLION WITH A 20-YEAR TERM|
|Rates are based on a 30-year-old male in good health.|
Average annual cost of a term life policy for a female by age
|AGE||$250,000, 20-YEAR POLICY||$500,000, 20-YEAR POLICY||$1,000,000, 20-YEAR POLICY|
Average annual cost of a term life insurance policy for a male by age
|AGE||$250,000, 20-YEAR POLICY||$500,000, 20-YEAR POLICY||$1,000,000, 20-YEAR POLICY|
Average annual cost of whole life insurance by age
Is life insurance worth it?
Life insurance can provide significant financial security for your loved ones who depend on you, such as a spouse, partner, or child. If your family relies on your income to meet their financial needs, a life insurance policy can be invaluable in ensuring they are protected from potential hardships. From covering essential expenses like mortgage, rent, and tuition costs to everyday necessities such as utilities and groceries, the proceeds from your policy can make a significant difference.
Moreover, a life insurance policy can serve as a safety net to cover end-of-life expenses, including funeral costs, burial, or cremation. This can alleviate the financial burden on your family during an already difficult time.
However, life insurance may not be a priority if you don’t have anyone depending on your income for financial stability. Similarly, if you already have a robust savings plan in place, such as other investments or a well-funded emergency fund, the necessity of life insurance could be lessened.
In summary, carefully consider your financial situation and the needs of your loved ones before making a decision about life insurance. It can be a valuable asset for those who depend on you, but its significance may vary depending on individual circumstances.