Expert Guide to the Best Life Insurance in the US for 2019
There are over 800 life insurance companies in the US alone. Finding the right life insurer to fulfill your needs is by no means an easy task. And all of them advertise affordable coverages and reliable customer service.
We evaluated 42 top-rated companies and to make the decision easier for you, we went ahead and ranked the three best companies overall. After that, we explored the best life insurance options for different types of buyers.
Since you’ll face an equally difficult decision configuring your policy once you choose the right company, we provided a detailed guide on different kinds of life insurance policies with all the nitty-gritty details you should know. Whether you’re shopping for your next coverage or just want to learn how your policy works, you’ll find everything you need right here.
The Best Life Insurance Companies
1. Haven Life Insurance
The Overall Winner for Best Term Life Insurance
Despite some fierce competition, Haven comes out the clear winner. For starters, it offers quite reasonable prices for its term life policies, considerably lower than its parent company, Mass Mutual. Because the parent company underwrites Haven’s policies, its premier financial strength transfers to the daughter company too—making it easy for us to choose Haven for best term life coverage.
Mass Mutual’s financial rating from A. M. Best is “A++,” or “Superior,” which is the highest possible. Additionally, Mass Mutual gets considerably fewer complaints than an average company of its size. Its NAIC ratio is only 0.04.
However, unlike its parent company, Haven offers only a limited range of policies. In fact, term insurance is the only option, and the maximum amount is restricted to $1 million for online applications and $2 million for overall. If you’re looking for the best life insurance for seniors over 60, they’re limited to $1 million, which still isn’t bad. Nonetheless, Haven has one of the fastest application processes, and you can get coverage without completing a medical exam if you are a younger customer.
All things considered, Haven scores high where it matters most, and that’s why we consider it to be the best life insurance company in the USA.
2. State Farm Life Insurance
The Runner Up: Top Rated but Pricey
State Farm takes second place in our rankings for multiple reasons. For starters, its customer service is on par with any other life insurer we tested. It holds the top position in J.D. Power’s 2018 rankings, being the only company to score a full five out of five stars. This is the fifth year in a row that State Farm won that award.
On top of its excellent customer service, State Farm offers a variety of life insurance policy options, such as term, whole, and return of premium term, which you can easily customize online. Finally, State Farm is one of the biggest insurance companies by market share in the US, which indicates a firm financial footing. A. M. Best only confirms this, by awarding State Farm an “A++,” the highest possible rating.
State Farm’s only downside is that it’s more expensive than most of the competition. Still, it’s one of the best life insurance options on the market, meaning it may be well worth the price.
3. Northwestern Mutual Life Insurance
The Bronze Medalist & Best Whole Life Insurance
Northwestern Mutual is the biggest mutually owned life insurance company in the US. Despite its size, it takes great care of its customers. Northwestern holds second place overall in 2018’s J.D. Power rankings, scoring four out of five stars. Additionally, its NAIC ratio is 0.03, which is significantly below the industry average.
No company outperforms Northwestern in this category. We’ve placed it among the best life insurance companies in the USA because on top of providing excellent customer service, this company achieves all the highest ratings in the financial strength department. It gets an “A++,” AAA, Aaa, and AA+ from A. M. Best, Fitch, Moody’s, and S&P, respectively.
The good news continues: there’s a variety of coverages and riders you can add to your policy. A rider is essentially a modification of your insurance policy, which extends the coverage in some way. There are many different kinds to consider, depending on how you want to alter your policy. These are especially important for whole life insurance because you’re more likely to want to modify this kind of policy. You can even combine your term and permanent life policies under Northwestern Mutual, which is why we think it’s the best company for whole coverage.
In terms of prices, Northwestern falls in the middle of the pack, but it’s more affordable than the competition for smokers and senior customers. Overall, Northwestern is the best company for those who like to get a flexible policy from a financially stable company.
The Leading Life Insurance
Companies in Specific Categories
Principal Life Insurance
The Cheapest Life Insurance
If you are just looking for simple and affordable term life coverage, Principal should be at the top of your shortlist. In our quote comparison, it was the cheapest option, costing only $121 monthly for a 55-year-old male in relatively good health. The next most affordable company was Mutual Omaha, which charged $135 for the same customer.
In other departments, Principal scores respectably too, although the top companies we listed for the best life insurance outperform it. To begin with, Principal’s financial rating from A. M. Best is “A+,” which is a notch lower than the top three. It also scores marginally weaker in the customer service department, where it gets three out of five stars in the 2018 J.D. Power study.
Overall, Principal may not be the best company, but if cheap life insurance is your cup of tea, it should be at the top of your list. When it comes to the variety of coverages and extra options, Principal covers all the basics. Additionally, the company offers $1 million maximum coverage without a medical exam, regardless of which policy type you choose. The majority of the competition sets the limit at $500,000. And you can get your quotes quickly on Principal’s highly intuitive website.
MassMutual Life Insurance
The Best for Dividends & People with Pre-existing Conditions
Our list of life insurance companies worth your consideration wouldn’t be complete without Haven’s parent company, MassMutual. As its name says, it is a mutual insurer, meaning that the policyholders own the company, and they get dividends from profits. Out of all mutually owned companies in the US, MassMutual offers the highest dividends in 2019.
However, there are many more reasons to give MassMutual a chance. First, the company is one of the best insurance companies by market share in the US, indicating stable financial operations. Its top rating from A. M. Best, “A++,” and its excellent evaluations from Fitch, Moody’s, and S&P only confirm this.
Second, the company gets respectable scores in the customer service department. MassMutual receives three out of five stars from J.D. Power, and its NAIC ratio is 0.04. Finally, MassMutual, unlike its daughter company, offers a variety of policy types and riders and is willing to accept customers with preexisting conditions, placing it among the best life insurance for seniors.
While these results make MassMutual a great choice, it’s worth noting that it’s among the most expensive life insurers on the market. Our reference quote came in at $248 monthly, while our cheapest company offered $121 per month for the same category. However, despite the high prices, MassMutual is still worth considering for those who can afford its policies.
Legal & General America
(FKA Banner Life Insurance)
The Best Life Insurance for Seniors
While more affluent senior customers may prefer MassMutual, Banner is our overall best company for this age group. It offers very reasonable prices and its underwriting strategy is among the most lenient. In other words, this company always tries to put you in the highest possible health category and provide better rates. This makes it an excellent choice for senior life insurance since older customers are rarely in perfect health.
And it’s not just favorable underwriting that puts Banner near the top of the pile. Its A. M. Best rating is “A+,” which is the second best possible. Additionally, their NAIC ratio is 0.14, which is still considerably below the average, although many insurance companies outperform it in this area.
Finally, they are second to none when it comes to the variety of coverages it offers and how easy it is to apply. It’s even possible to get term life insurance quotes from them without completing a medical exam. However, applicants who’ve had a recent traffic violation or who have a history of substance abuse should probably skip Banner. They’ll find the company particularly expensive. However, it’s the best solution for seniors who we at MedAlertHelp care for in particular, and it’s excellent for younger customers as well.
MetLife Life Insurance
The Best Insurance to Get Through Your Employer
MetLife offers both term and permanent life insurance, but it only sells these coverages to employees working for companies associated with MetLife. Nonetheless, their network is quite extensive, meaning the chances that you’re eligible are good. The type of coverage you’ll be able to get depends mostly on the deal between MetLife and your employer.
When it comes to the prices, MetLife won’t overcharge you unless you are a smoker. If you are, it won’t be the best life insurance company for you, so maybe consider one like Prudential. In other departments, such as customer service and financial strength, MetLife scores admirably. It gets four out of five stars in J.D. Power’s rankings and the second highest A. M. Best rating, “A+.”
However, MetLife doesn’t offer a mobile app for its life insurance, and its online resources and website are mediocre. Still, for no-nonsense term life coverage that you can buy through your employer, MetLife is a great choice.
Prudential Life Insurance
The Best for Tobacco Smokers
What is the best life insurance company for smokers, tobacco chewers, and marijuana users? Thanks to their lenient underwriting, Prudential is the leading option. In fact, if you smoke irregularly or only have a couple of cigarettes per week, you’ll likely qualify for non-smoker rates. You just have to be upfront about how much you smoke.
Additionally, if you roll up a joint now and then, Prudential won’t overcharge you. You’ll even be able to qualify for their Preferred Best Non-Smoker category, which gets the lowest rates available. Finally, Prudential offers the best life insurance policies for tobacco chewers, since they’ll also be rated as non-smokers.
Besides its tolerant underwriting for tobacco consumers, Prudential has many things going for it. To start, its A. M. Best rating is “A+.” On top of that, Prudential performs respectably in the customer service department, getting three out of five stars in J.D. Power’s study. Even its NAIC ratio is 0.21, far better than the average. Prudential’s only disadvantage is that it doesn’t offer whole life policies.
Still, the most significant advantage of Prudential is its low prices. The company quoted only $165 monthly for our reference customer. And judging from the other leading life insurance reviews we checked, it’s also affordable for older customers, those who have existing medical issues, and folks who have DUIs on their record. That’s why it is one of the premier insurers for high-risk customers looking for affordable policies.
Transamerica Life Insurance
The Best for Multiple Options
Still trying to figure out which is better, term or whole life insurance? If you can’t decide which life insurance to get, or if you’d like to customize your policy, Transamerica demands your attention. It offers a wide range of policies and limits and several unique features.
For instance, you can speed up death benefits with their term policies if you’re diagnosed with a wide range of illnesses. This is especially important if high medical bills are threatening to bankrupt you and you’re in dire need of cash. Many competitors only accelerate death benefits for those who are terminally ill. Additionally, Transamerica offers some of the most flexible payment plans on the market.
The company’s scores in other departments are a mixed bag. Its A. M. Best rating, indicating financial strength, is “A+.” However, Transamerica is not among the best-rated life insurance companies in customer service. It gets only two out of five stars in J.D. Power’s 2018 study. Additionally, its NAIC ratio is 0.58. That’s still better than the average, but it’s considerably lower than the other life insurers we’ve tested. The primary customer complaints were poor communication and that it takes ages to get your claim paid.
Finally, Transamerica’s prices fall in the average category. This means that if you’re looking for a basic and affordable term policy, there are better options around. But if you want a company that offers a wide variety of products at a reasonable price, give Transamerica a chance.
Mutual of Omaha Life Insurance
The Best Life Insurance for Customer Service
If you’re saving every penny for retirement and you want a life insurance company that offers dirt cheap policies and won’t let your loved ones down when the time comes to pay the claim, choose Mutual of Omaha. Overall, it’s the second cheapest life insurance company in our comparison, behind Principal.
Additionally, Mutual of Omaha received great scores in customer service, with four out of five stars in J.D. Power’s ratings. Furthermore, its NAIC ratio is 0.00. Yes, you read that right. The National Association of Insurance Commissioners found no unresolved complaints against Mutual of Omaha.
And it’s not just low prices and top-notch customer service that make Mutual of Omaha a terrific choice. The company has a sleek, intuitive website that lets you get quotes fast. Mutual of Omaha offers all the best life insurance plans, such as term, whole, universal, and accidental death resulting from a terrible fall, for instance. In fact, the company scores so well across the board that we’d recommend it to anyone looking for high-quality life insurance.
TIAA Life Insurance
The Best for Full Financial Services
If you’re looking for a company that offers not just life insurance, but also a variety of financial services, TIAA is one of the best life insurance companies to consider. It provides retirement annuities through an employer as well as investment opportunities in mutual funds. TIAA can even create an entire investment strategy for you, based on your preferences and annual income.
In addition to providing a wide range of financial services, TIAA performs well across the board. Its A. M. Best financial rating is “A++,” the highest possible. Moreover, TIAA’s NAIC ratio is 0.14, indicating reliable customer service. On top of that, the company offers a wide range of term policies, as well as whole and universal coverages.
Finally, TIAA provides fast life insurance quotes online and competitive rates. These excellent scores make TIAA the top choice for clients looking for complete financial services and a viable alternative to our top three for any customer.
Our Ranking Methodology
Our scores are based on performance in four key categories. Read below to see why these categories are the most important in assessing any life insurer.
1. Financial Strength
As you search for the best life insurance provider, the company’s financial stability should be one of your first considerations. After all, a life insurance contract is a long-term deal, usually lasting more than ten years. What good does it make if the insurer goes bankrupt before it’s time to pay the claim?
That’s why you should consider independent reports from the major credit rating agencies. The most trusted agencies are Moody’s, Standard and Poor’s, Fitch, and A. M. Best. The last is particularly renowned for its ratings of insurance companies, which is why we mostly used A. M. Best’s scores to rank the top insurance companies.
As a rule of thumb, only consider the companies the score an “A” or higher. Because life insurance by definition requires considerably longer-lasting coverages, think twice before endorsing a company with a low A. M. Best rating. Put simply, there’s too much at stake to take such risks.
2. Customer Service
The whole purpose of life insurance is to provide for your loved ones once you’re gone. Now imagine how terrible it would be if they had to fight a legal battle with a company that exploits loopholes to avoid paying out. That’s why we consider the insurance company ratings in customer satisfaction vital to our ranking process.
We specifically looked at the NAIC ratios, which indicate how many complaints a company gets relative to its size (1.0 is average, and less than 1.0 is better than average). Next, we looked at the 2018 J.D. Power ratings, which range from one to five stars. They’re based on expertly built surveys that include a sizable sample of consumers. Finally, to properly distinguish the best from the worst life insurance companies, we looked at the Better Business Bureau’s scores. This organization rates companies on an A+ to F scale based on how transparently and ethically they conduct their business.
3. Quote Process & Variety
This is an umbrella category for determining which life insurance is best. It includes how easy it is to navigate the company’s website and get the products you need. It also evaluates what types of life insurance a company offers and how easy it is to customize a policy to match your needs. Furthermore, we look at how well-rated these companies’ mobile apps are and the number of functions they cover.
This one should be quite simple. Nobody wants to pay more for insurance than they need to, considering how difficult it is to save based on statistics exhibiting dangerously low retirement savings and 401(k) contributions. That’s why affordability is one of the main criteria in our ratings. Although insurance quotes are always highly individualized, there are still many companies that consistently provide cheaper quotes.
|Life Insurance Company||Monthly Life Insurance Premiums*|
|Legal & General America (Banner)||$140.14|
|Mutual of Omaha||$134.81|
*20 years term with a $500k limit for a 55-year-old healthy non-smoker
All You Need to Know About Life Insurance
How Does Life Insurance Work?
This type of policy is essentially a contract between you and the insurance company. If you die within the policy’s duration, the insurer has to pay the agreed amount to your selected beneficiary. In return, you have to pay your premium on time. Life insurance settlements are tax-free.
Additionally, some policies, such as whole life, have a cash value component. It’s a separate account within your insurance policy. It functions primarily as a savings account. You can use the cash value to pay premiums or even take a loan. Still, its chief purpose is to serve as compensation if you surrender your policy to the insured.
What Is the Best Life Insurance?
There are over twelve different types of possible life insurance. All of them fit different customers in different situations. Here, we covered the most common policies and how they work.
1. Term Life
A basic term life policy is the bread and butter of the life insurance industry. It’s the most affordable type of life insurance, so it’s the best policy if you’re looking for cheap coverage for a given period.
So exactly what is term life insurance? It provides coverage for a specific period, usually ranging from 5 to 30 years, with a set limit frequently between $200,000 and $500,000. Your premium can’t change during the term, meaning if you’re paying $32.40 now, you’ll be paying $32.40 in ten years. Once the policy expires, you can choose to renew it, but at a much higher price. There’s no cash value, and the premium won’t be returned if you outlive your coverage.
2. Whole Life
This is a type of permanent life insurance. It covers you from the first effective day until the day you die. You can only lose coverage by not paying the premium, which causes the policy to lapse, or by canceling it. Much like term life, the premiums are fixed for your lifetime.
A whole life policy has a cash value component, which functions as a separate savings account. The death benefit payments are tax-free, although the income from the cash value is taxable.
A whole life policy is considerably more expensive than term. The premiums are usually 8–12 times higher than an equivalent term policy. That’s why it’s a better investment for customers with a higher annual income or those looking to profit from the cash value component.
3. Return of Premium Term Life Insurance
If you’re looking for a protection plan that perfectly balances the benefits of term and whole coverages, a return of premium term policy demands your attention. Essentially, it’s a regular term policy that also pays your premiums back if you outlive your policy. Additionally, you’ll likely get some money back even if you cancel the policy before it expires.
In many instances, you’ll earn even more if you invest the premium’s money with interest. Some ROP term policies even have cash value components, like whole coverages. These are just some of the reasons ROP term can be the best life insurance policy for many.
Nonetheless, they’re 3–4 times more expensive than most standard term policies. For instance, a $500,000 20-year term policy from State Farm costs $44.39 monthly, while its ROP variant costs $161.84 monthly. Still, it’s considerably cheaper than permanent insurance—our same State Farm quote was $688.19 monthly.
4. Universal Life
Those who fancy whole life coverage but prefer more flexibility and lower prices should consider universal life insurance. Just like a whole life policy, it’s a permanent protection plan, and it offers cash value. However, the premium and the death benefit can be easily adjusted. Since the premium increases as you age, you can lower it to the minimum COI (cost of insurance) amount. Alternatively, you can use the cash value to pay your premiums.
How Much Life Insurance Do I Need?
The simplest method to calculate this is to take your annual income and multiply it by ten. According to this, if your annual salary is $50,000, the death benefit on your policy should be $500,000.
However, there are usually more things to consider. Start with your mortgage and student loan debts. If it takes 20–30 years to repay them, consider a higher death benefit. Furthermore, if you’re planning to send your children to college, calculate how much that would cost. Finally, review your current bank account balance. Once you take all this into account, the right limit may be as high as 40 times your annual income.
The Best Ways to Get a Life Insurance Quote
More often than not, you’ll have to deal with an agent to complete your insurance policy. There are essentially two types of insurance agents. First, there are captive agents, who only sell the products of the insurer they work for. Then, there are independent agents, who work by commission for multiple insurers. If you manage to find a skilled independent agent, you should count on them to find the best insurance quote possible. However, agents often don’t cooperate with mutual insurance companies (those owned by their policyholders).
Another route to the best coverages is to use quote comparison websites. Nonetheless, we still prefer getting online quotes the most. Often they’ll need to be finalized through an agent, but it’s still the most convenient way to compare prices.
Tips for Finding Cheap Life Insurance
You should do everything in your power to obtain the most affordable insurance quotes, especially in times of skyrocketing healthcare costs. There are several different factors and lifestyle choices that can impact your life insurance premium. Many of them relate to your physical health and safety, but some may have nothing to do with that. For example, even a bad credit record can lead to higher premiums. Here are some tricks to keep your quote as low as possible.
1. Take Advantage of Bundle Discounts
Almost every insurance company my team and I have reviewed offers a 5%–10% discount to customers who buy different kinds of policies from them. Some of the big players that offer both auto and life insurance quotes are State Farm, Geico, MetLife, USAA, and Nationwide.
2. The Sooner the Better
It sounds trivial to say that health and fitness deteriorate as you age. If you’re considering a term policy, you could end up paying 10% more for every year you wait. That’s why it’s best to get coverage while you’re still fit and in good health. This is especially true for male customers.
3. Maintain Healthy Habits
Smoking is among the biggest red flags to a life insurance provider. The link between using tobacco and various forms of life-threatening cancers is well established. That’s why insurance companies have to charge them three to four times more than they would a regular customer.
To keep your life insurance rates low, try to avoid other unhealthy habits too. These include consuming substantial amounts of alcohol, eating a lot of greasy or sugary food, or skipping physical exercise. So make sure to stay active and eat your vitamins.
To test how these vices influence prices, we got two quotes for a 40-year-old male from Haven insurance with the same limits and terms. One of them was in good health, while the other was an overweight smoker and a moderate drinker. The monthly premium for the healthier individual was $38.65, while it was $169.25 for the unhealthy customer.
4. Don’t Drive Fast
Almost every life insurance provider reviews your driving record before issuing a policy. That’s because a streak of speeding citations or DUI violations on your record are a major warning sign. It indicates that you’re more likely to end up six feet under than a driver with a safe record. They’ll have to adjust their rates accordingly to protect their profits.
5. Don’t Do Anything Dangerous on a Regular Basis
Activities such as skydiving, full-contact martial arts, rock climbing, and scuba diving all make a life insurance underwriter’s stomach turn. This is no surprise, given how much they increase your chances of a disabling injury or death.
6. Check Your Family Records
Genes play a big part in your overall life expectancy. Even if you’re healthy and athletic, if your parents or relatives passed on prematurely due to disease, insurers may charge you more. Changing your genetic make-up is beyond your power, but providing a family history isn’t. Your life insurance company may void your policy or even deny paying a claim if you intentionally hide this information.
7. Don’t Skip Medical Exams
You can buy certain types of life insurance, such as Haven’s term coverage, without completing a medical exam. While this option is available only for younger customers, it’s still smarter to have a physical exam before applying. Without it, an insurer is essentially taking a risk by assuming you’re as healthy as you said in the application. If you can provide them with some hard evidence signed by a doctor, they’ll offer you more competitive rates.
8. Compare Multiple Quotes
Insurance companies often have different marketing strategies. For instance, an established insurer will invest a lot in marketing and therefore offer relatively high rates. An emerging company, on the other hand, will try to woo customers by providing the best life insurance rates on the market.
Additionally, all insurance policies, including life, are highly individualized. While one company may offer you unreasonably high rates, another may provide a quote that’s well within your budget. For this reason, it’s essential to compare quotes from multiple insurers. We recommend you do this either online or through independent agents.
Frequently Asked Questions
Is life insurance taxable?
No. According to IRS’s website, only the interest you receive from your life insurance coverage is taxable.
How long do you have to have life insurance before you die?
As with all insurance types, you’re covered from the first effective date of the policy up until the last, unless you fail to pay the premium. In that case, your policy will lapse.
What is the best type of life insurance to buy?
This really depends on your budget and what you’re looking to get out of your life insurance coverage. Nonetheless, we assume that most folks would be quite happy with a 10- to 20-year term life policy. This is an inexpensive coverage that can provide security for your loved ones in a period when it’s needed the most.
What happens to term life insurance if you don’t die?
If you outlive your regular term policy, your coverage will expire, and that’s it. You have an option to extend the policy, but the premium will be significantly higher. Alternatively, you can buy a return of premium term life policy, which means you’ll get the premiums back when the policy expires.
What is the maximum age for term life insurance?
Generally, most insurers set the limit at 85 years old, while the more stringent draw the line at either at 80 or 75 years old. Even so, State Farm lets you renew your term coverage through age 95.
Can you cash in your term life policy?
No. A term policy only pays the death benefit to your beneficiary if you die before the policy expires. Whole life coverage, on the other hand, provides cash value, which you can withdraw at the cost of the total payout.
Do I get money back if I cancel my life insurance?
Is term life insurance better than permanent? It’s essential that you know that the latter has a cash value option, which you can use to get some money back even if you cancel your policy. Term life, on the other hand, doesn’t pay any money back if you cancel your coverage. Only if you opt for a return of premium term policy will you be able to refund your payments.
Can my life insurance company deny a claim?
Yes, there are many circumstances under which an insurer may deny your claim. Some of them include suicide, providing false information about your health or engaging in dangerous hobbies, participating in criminal activities, dying in an act of war or terrorism, or dying in another country if you moved there full-time.
What does whole life coverage cost?
A whole life policy may be considered the best life insurance, but it is quite expensive. The annual premium usually ranges from $4,000 to $12,000, depending on the limits and the age of the insured.