Everything you need to know about the best type of policies and the insurance companies that sell them.
Losing a loved one can take a huge emotional toll and can also cause financial distress. The best life insurance policy is one that can help to create financial stability for your loved ones in the event of a terminal illness or accidental death.
Signing up for life insurance allows you to designate beneficiaries to get monetary support after you pass away. The premium, which is a fixed amount, can be paid either monthly or yearly, and the beneficiary will receive a set amount of money, which is called the death benefit, after your death. The amount of the death benefit and the term, or length of the coverage period, are two of the variables that figure into the price of the premium.
Best life insurance companies for 2021
There are essentially two types of life insurance products: basic life insurance and life insurance bundled with a quasi-investment product. Bundled products, including whole life, universal life, permanent life, and any policy with a cash value component, are generally more expensive and complicated. Term life insurance is the most inexpensive and straightforward choice for most people.
“If I need to make sure my family or business is protected in the case of my passing prematurely, I want to focus on term insurance,” said David Gastwirth, an insurance strategist with American Business. “It’s the fundamental cornerstone of one’s insurance plan.”
Term life insurance policies’ death benefits typically start at $100,000 and go up to $3 million, which should be an adequate life insurance product to cover most people’s needs. (In some cases, you can get a term life insurance policy with a $5 million benefit.)
All things being equal, Gastwirth recommends erring on the side of more coverage, since the cost of a life insurance policy increases as you age — and, if you develop health issue complications later in life, you could become uninsurable. “Get as much as you can for as long as you can, without changing your lifestyle,” he said.
The best time to buy life insurance is when you’re young and healthy. (However, if you’re neither of those, it’s still worthwhile to buy a policy.) Most experts recommend that consumers buy a policy with a death benefit equal to 10 to 12 times their annual income and a term long enough to cover living expenses and future financial liabilities, such as mortgage payments and college tuition.
The cost of the policy — and the pricing of your monthly or annual premium — is primarily determined by the length of the term and the size of the death benefit, although there are other factors that come into play, such as your health and age, your gender, whether you’re a smoker and where you live. Adults in good health under the age of 40 can expect to pay between $25 and $50 per month for a 20- or 30-year term life insurance plan, with a death benefit of around $500,000.
BEST LIFE INSURANCE COMPANIES, COMPARED
|Best overall||Best customer service||Cheapest and fastest||Best overall (runner-up)||Most flexible terms||Best customer service (runner-up)|
|Principal Financial Group||Northwestern Mutual||MassMutual / Haven Life||Nationwide||Banner Life / Legal and General America||State Farm|
|Go to website||Go to website||Go to website||Go to website||Go to website||Go to website|
|JD Power Customer Satisfaction Rank||4||1||12||6||N/A||2|
|Coverage terms||10, 15, 20 or 30 years||10 or 20 years||10, 15, 20 or 30 years||10, 15, 20 or 30 years||10, 15, 20, 25 or 30 years||10, 20 or 30 years|
|Death benefits||$200,000 to $5 million||$100,000 to $5 million||$100,000 to $3 million||$100,000 to $1 million||$100,000 to $10 million||Unspecified|
|Can you buy a policy online?||No||No||Yes||No||No||Yes|
* The monthly term policy premium amount paid by a 35-year-old in excellent health for a 20-year term life policy with a $500,000 death benefit.
We’ve compared coverage features, customer service rankings, corporate stability, and the average price of a policy from 25 life insurance companies. The six companies highlighted below offer 20-year policies with a $500,000 death benefit for $23 to $32 per month (or $5,520 to $7,200 over the course of the term).
The more expensive policies are offered by larger companies, including Northwestern Mutual and State Farm, which are known for superior customer service. Note that we omitted some companies because they don’t offer policies to residents in every state.
Best life insurance companies
Principal Financial Group
We think Principal Financial Group offers the best combination of affordable coverage and customer satisfaction, which is why it tops our list of the best life insurance companies. It ranked 4th in J.D. Power’s 2019 customer satisfaction survey and had far fewer customer complaints than the industry average, according to the National Association of Insurance Commissioners. Best life insurance companies for 2021
Among the companies profiled here, Principal’s insurance coverage monthly premium, with packages including universal life insurance, was the second least expensive. A 20-year, $500,000 term life policy for healthy 35-year-old costs $23 per month — compared with an average life insurance rate of $25.80. That, plus an A+ financial strength rating from A.M. Best and 140 years in the business, makes Principal a great insurance company choice for just about anyone looking to ensure that their loved ones have additional financial stability.
Principal offers life insurance plan term lengths of 10, 15, 20, and 30 years, with death benefits ranging from $200,000 to $5,000,000. The $200,000 minimum is a bit higher than others, but most people should opt for a policy with at least $250,000 of coverage, if possible.
Best life insurance companies for 2021
Haven Life Insurance Agency’s policies are backed by MassMutual, one of the biggest and oldest insurance companies in the US. But its modern touches and unequaled convenience are what distinguish this insurance agency from the rest of the field.
Most insurers require you to meet in person with a financial advisor or a life insurance product agent before approving your policy. (Some won’t even give you a quote without a phone call first.) In the novel coronavirus era, shopping for term life insurance coverage, universal life insurance or a permanent life insurance policy from the comfort and safety of your own home is a particularly compelling prospect. Haven Life is one of the few life insurance company providers that will sell you a policy without requiring a doctor or lab visit first. Haven Life also offers policy riders that may let you access part of a policy’s cash value death benefit in the event of a disability or terminal illness.
Most customers will need to complete a medical exam within 120 days after signing up, but coverage starts immediately after being approved online. Your responses must be accurate, as any discrepancies could create issues with the payment of the death benefit. As long as you have a reasonably complete understanding of your family’s health history (and your own), the application shouldn’t take more than 15 to 20 minutes.
Haven Life, a top life insurance agency, had the lowest term life price quote among all the providers listed here. A 20-year, $500,000 policy for a healthy 35-year-old costs $22.34, compared with an average of $25.80. Haven Life offers term life policies ranging from 10 to 30 years, with term insurance coverage benefits ranging from $100,000 to $3 million to help provide financial stability for your family. And MassMutual has a solid reputation for customer service and financial standing.
Best customer service
Though each of these life insurance company options has earned a reputation for respectable customer service, Northwestern Mutual is known as the best in the business. The largest life insurer in the US, Northwestern topped JD Power’s 2019 customer satisfaction survey and has been recognized by the National Association of Insurance Commissioners for having the fewest customer complaints on average of all life insurance coverage insurers.
Most of Northwestern’s term insurance policies span 10 to 20 years. Benefits start at $100,000 and go up to $5 million, though a company representative said on the phone that they’re always adding new products and you should speak with a financial advisor about what life insurance product makes the most sense for your situation.
Northwestern offers premium customer service — but the insurance company’s policies, including term life insurance, whole life insurance, and universal life insurance, aren’t cheap. With quotes that are roughly 20% higher than competitors’, there are plenty of more affordable life insurance plan options. That noted, if exceptional customer service is your priority, Northwestern is the best choice.Best life insurance companies for 2021
How we chose the best life insurance companies
All the providers profiled here satisfy the minimum requirements for a life insurance company. Our analysis prioritized customer service, financial standing, and price — but each of these companies has earned respectable customer service grades from J.D. Power, a low complaint index from the National Association of Insurance Commissioners, and an A++ or A+ rating for financial strength from A.M. Best. Best life insurance companies for 2021
Though some of their policies are less expensive than others, all of these insurance product companies offer competitive premium rates. Note that the exact price of your life insurance policy will depend on your health, location, sex, and age. The bottom line: You can confidently choose any of these insurance company options for a reasonably priced, comprehensive term life insurance policy. Best life insurance companies for 2021
The best life insurance companies
Based on 2020 J.D. Power ratings, these are the best life insurance companies in 2021.
|Life insurance company||J.D. Power rating||Coverage capacity|
|MetLife Inc.||773 out of 1,000||$1,000,000|
|Prudential Financial Inc.||759 out of 1,000||$10,000,0000|
|New York Life Insurance Group||784 out of 1,000||$2,000,000|
|Northwestern Mutual||790 out of 1,000||$10,000,000|
|State Farm||838 out of 1,000||$3,000,000|
|Guardian||743 out of 1,000||$1,000,000|
|MassMutual||769 out of 1,000||$10,000,000|
|Nationwide||803 out of 1,000||$2,000,000|
|Mutual of Omaha||789 out of 1,000||$1,000,000|
To help evaluate the top life insurance companies, we gathered ratings from the J.D. Power, AM Best, and BBB websites, which are trusted sources of unbiased information. We combined that information and then analyzed customer reviews from Consumer Affairs to determine which might be the best life insurance companies.