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Life insurance will cover your dependents by paying them a death benefit if you pass away. A death benefit is a sum of money that your beneficiaries receive if you die during your policy. There are two types of life insurance: permanent life and term life. This article focuses on the best term life insurance companies because term life insurance is the most affordable option for most people.
The best life insurance companies of 2022
Insider gathered data from 20 different life insurance companies based on customer service, financial stability, asset size rankings, and premium prices where available. Here are the top five life insurance companies of 2022.
| Company |
Financial Stability Rating (AM Best) |
Sample premium for a $250,000 policy (30-year term) |
| 1. |
A++ | $30/month |
| 2. |
A++ | N/A |
| 3. |
A++ | N/A |
| 3. |
A+ | $21.44/month |
| 4. |
A++ | N/A |
| 5. |
A++ | $30/month |
Listed below under “How we determined the winners,” you will find the entire methodology of this ranking. You’ll notice that several top companies do not have quotes available online. Although it makes it harder to shop and compare, your goal should be to have the best coverage that fits your circumstances. Talk to an agent before purchasing so you know what kind of premium to expect.
Life Insurance
State Farm Life Insurance
While probably better known for auto and home insurance,
- Return of premium term life insurance —Get a refund on premiums if you outlive the policy.
- Instant answer simplified life insurance — This type of life insurance doesn’t require a medical exam.
- Universal survivorship life insurance is a policy for married couples known as “second to die” because it doesn’t pay death benefits until both parties die.
- Universal joint life insurance — A policy for married couples or business partners known as a “first to die” because it pays the death benefit when the first person dies.
Read our State Farm insurance review.
State Farm Life Insurance
Northwestern Mutual Life
- Term life — Covers you for a set amount of time such as 10, 15, or 20 years, and once that term ends, so does your policy.
- Whole life — Offers a death benefit and cash value that lasts your lifetime no matter which way the markets go.
- Universal life — Offers a death benefit and cash value based on interest rates and lasts your lifetime.
- Variable universal life — Offers a death benefit and cash value invested in the markets so you can have the chance to boost its growth over time. It also lasts your lifetime.
- Long-term care insurance — Covers cost like in-home care, assisted living, and nursing home care, not usually covered by insurance.
Read our Northwestern Mutual life insurance review.
Northwestern Mutual Life Insurance
New York Life
As the second-largest life insurance company in the US,
- Term life — Covers you for a set amount of time such as 10, 15, or 20 years, and once that term ends, so does your policy.
- Whole life — Offers a death benefit and cash value that lasts your lifetime no matter which way the markets go.
- Universal life — Offers a death benefit and cash value based on interest rates and lasts your lifetime.
- Variable universal life — Offers a death benefit and cash value invested in the markets so you can have the chance to boost its growth over time. It also lasts your lifetime.
- Long-term care insurance — Covers cost like in-home care, assisted living, and nursing home care, not usually covered by insurance.
New York Life Insurance
Nationwide Life Insurance
- Term life insurance — Guarantees conversion to any permanent life insurance product up to age 65 with no five-year window.
- Intelligent underwriting program — Accelerated underwriting for ages 60 and under with coverage up to $250,000.
- Express issue — A simplified issue no medical exam life insurance policy for under $100,000 in coverage for ages 70 and under.
- Care Matters — A hybrid long-term care life insurance product.
Read our Nationwide insurance review.
Nationwide Life Insurance
MassMutual Life Insurance
- Term life — Covers you for a set amount of time such as 10, 15, or 20 years, and once that term ends, so does your policy.
- Whole life — Offers a death benefit and cash value that lasts your lifetime no matter which way the markets go.
- Universal life — Offers a death benefit and cash value based on interest rates and lasts your lifetime.
- Variable universal life — Offers a death benefit and cash value invested in the markets so you can have the chance to boost its growth over time. It also lasts your lifetime.
- Long-term care insurance — Covers cost like in-home care, assisted living, and nursing home care, not usually covered by insurance.
MassMutual Life Insurance
Guardian Life Insurance
The
- Term life — Covers you for a set amount of time such as 10, 15, or 20 years, and once that term ends, so does your policy.
- Whole life — Offers a death benefit and cash value that lasts your lifetime no matter which way the markets go.
- Universal life — Offers a death benefit and cash value based on interest rates and lasts your lifetime.
Guardian Life Insurance
The best life insurance companies based on customer satisfaction
According to a J.D. Power survey, these are the top life insurance companies in the US considering five factors — communication, interaction, price, product offerings, and statements — based on customer rankings:
Why trust our recommendations?
Personal Finance Insider’s mission is to help smart people make the best decisions with their money. We understand that “best” is often subjective, so in addition to capitalizing on the benefits of a financial product or account, we outline its limitations, too. We thoroughly compared and contrasted various products’ features and fine print, so you don’t have to.
How did we determine the best life insurance companies?
Insider collected data on 20 companies from S&P Global, J.D. Power, and insurers’ sites. We picked our top five based on financial stability ratings, customer satisfaction, and the company’s size based on market share. When available, Insider also gathered sample premiums. We didn’t include companies that no longer offer individual life insurance or didn’t have a minimum of 3 out of 5 for customer satisfaction.
Here are the factors we considered in our methodology:
Customer satisfaction
The J.D. Power US Life Insurance Customer Satisfaction Survey served as the basis of this category. Using the responses of over 6,000 life insurance customers, J.D. Power gathered information on customers’ satisfaction with the application process, communications and interactions with the company, product offerings, prices, and statements.
Financial stability ratings
Several companies and agencies rate the financial strength, stability, and outlook of insurance companies, including Moody’s, A.M. Best, and Fitch Ratings. Insider gathered ratings for each life insurance company from A.M. Best. Top life insurance companies typically score above the industry average of 776 points.
Size of financial assets (market share)
Insider obtained information on the largest life insurance companies by market share from the S&P.
Sample premiums
Sample premiums were collected when available through company websites. Each used the same sample person: a 35-year-old, single, non-smoking female living in Illinois, with the same height and weight and excellent health. We calculated sample premiums based on a $250,000 policy with a 30-year term.
Frequently asked questions
Do I need life insurance?
If you have dependents — people who rely on your income, like children, a non-working spouse, or aging parents you support — you need life insurance. If you don’t have dependents but do have debt or own a business, you might also want to consider it.
How do I figure out how much life insurance coverage I need?
Traditionally, the rule of thumb is to get life insurance worth 10 times your annual income — so if you make $75,000 a year, you’d get $750,000 worth of coverage.
However, some experts consider that to be a low estimate, especially if you’d want your life insurance payout to cover your child’s college tuition or if you have a mortgage on your home you’d want to pay off. Others choose to get millions in coverage.
Generally, you’ll want to get as much life insurance as you can comfortably afford each month. If it would be a struggle to make your premium payments, it’s probably too much for you.
What is the average cost of life insurance per month?
The cost of coverage varies by company, policy, and policyholder. A healthy 35-year old male can expect to pay about $49 per month for a 20-year term life insurance policy, according to data from Policygenius.
But, many factors influence the price of life insurance. Your overall health, hobbies, gender, age, and the amount of coverage you need will affect the price you’ll pay for coverage.
How do I get life insurance?
There are a few ways to approach getting life insurance once you’ve decided how much coverage and what type of policy you need.
You can find policies through insurance companies directly or through online agencies, which major insurance companies back. Online agencies let you bypass the need for an in-person insurance agent and often offer the ability to get a quote and buy your policy entirely online.
If you want to go the more traditional route, you can work with an agent. Like Northwestern Mutual, you’ll need to work with an agent to get a policy with some of the companies above. Companies will generally either help connect you with an agent or provide a list of agents in your area.
If you’re working with a company that doesn’t require an agent, you can go ahead with the application process yourself. After completing some questions about your health history, hobbies, and travel plans, you may need to complete a medical exam. However, some companies are changing their medical exam policies due to COVID-19. Talk with your prospective insurer to arrange an exam you’re comfortable with.
After completing these steps and being approved by the insurer, you’ll get your final monthly payment. From there, you’ll start paying for your policy and have your coverage in place. It’s important to talk to a financial advisor about your financial situation and goals to determine what life insurance is best for you.
How do I find the best price for life insurance?
Like any other type of insurance, term life policies have many factors influencing the price you’ll pay for coverage. Your age, health, location, and amount of coverage necessary will all change the monthly premium. The company you choose will look at all of these factors differently. This will result in different prices for every company and policy.
To get the best possible deal on life insurance, you’ll want to shop around and compare quotes. Some carriers on this list don’t offer online quotes, so it may be challenging to get an estimate. But when available, comparing four or five quotes is an effective way to save a few dollars each month on your premium. Since you’ll pay life insurance for 20 or 30 years, that savings will add up.
What’s the difference between term and permanent life insurance?
The difference between term life insurance and permanent life insurance is similar to the difference between renting an apartment (term life) and owning a home (permanent life). When you rent, you have a lease for a certain term. When that lease is over, you can renew — but most likely with a rent increase.
Likewise, term insurance lasts for a specified period, and when it’s up you can reapply for coverage, but the premiums most likely will go up as you age and your health deteriorates. Term life insurance is best suited for those who want to protect their family since it’s more affordable.
Permanent life insurance never expires, has a death benefit for your beneficiaries, and a cash value that you can use during your lifetime. It’s like owning a home, where you gain equity that can be used as collateral — and your home can be left to your heirs leaving a legacy. This is why permanent life insurance is considerably more expensive than term life insurance.
Do I need term life insurance or permanent life insurance?
Most people only need term life insurance or coverage for 10 to 30 years. Term life insurance is usually the right choice for families with young children, people with mortgages, or anyone with debt. While the policy will expire eventually, it will expire when you pay your debts and children are grown and on their own. It covers you when you have the most at stake. Generally, they cost between $20 and $40 per month, depending on your health and the age when you start.
Permanent life insurance, however, works differently. It never expires and has a cash value component in addition to the death benefit. You can use the cash value during your lifetime and use it to build wealth or leave a legacy. There are different types of permanent life insurance: whole life, universal life, and variable life. Permanent life insurance is significantly more expensive every month, but it is guaranteed to payout when you die, no matter your age. Permanent life insurance also offers cash value that accumulates interest over time.
Financial advisors suggest a combination of permanent and term life insurance. For example, if you have $200,000 in permanent life and $300,000 in term for 20 years, at the end of 20 years, the term life insurance policy goes away, but you still have your $200,000 permanent policy that has earned cash value.
Whether you choose permanent or term life insurance, you will need to undergo the underwriting process. The underwriting process is how the insurance company determines your insurability — determining how much of a risk you are and how much to lend you. It may require a medical exam, which includes the collection of a blood and urine sample.
If you are on a fixed income with limited means, final expense, known as burial insurance, could be best for you. If you have health issues that may prevent you from traditional coverage, you may want to consider no medical examination life insurance.
It’s wise to consult an accountant, estate planner, and financial advisor to help you understand a life insurance’s tax benefits and implications, as well as determine which insurance type is best for you. It’s worth taking the time to find the best policy because once you’ve signed, it’s tough to adjust your coverage.
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