Finding the best life insurance company typically involves weighing customer service, financial strength and price. Hundreds of life insurance companies are competing for your business, often selling very similar products.
The other element of your buying decision will be price. It’s smart to get life insurance quotes from at least a few companies.
Our calculations show that Northwestern Mutual is the best life insurance company among those we scored, and many others also are worthy of consideration. (Full methodology below.)
How to choose the best life insurance company for you
Look at customer satisfaction scores: Other customers’ experience can help you decide whether you want to do business with a company. You can get clues about a company’s reputation through:
Customer satisfaction scores from J.D. Power. The independent ratings firm publishes scores for nearly two dozen of the largest life insurers each year.
Complaints filed against the company with state regulators.
Consider financial strength: Financial strength is especially important for life insurance companies because you’ll want a company that can pay claims many years down the road. Financial strength ratings are available through ratings agencies such as A.M. Best and Standard & Poor’s. We don’t recommend considering insurers with an A.M. Best rating of B or lower.
Get prices: The cost of coverage varies among companies. It’s smart to get prices from at least a few insurance companies.
Evaluate product selection: Although many companies sell similar policies, some focus more on certain products, such as whole life insurance, or on certain customers, such as seniors. Knowing generally the type of life insurance you want to buy will help you narrow the choices. You can learn more about the product offerings of each life insurance company below by clicking on the NerdWallet reviews.
The deciding factors: How we picked our Top 5
Financial strength: For each company, we looked at the financial strength scores from four independent ratings agencies (A.M. Best, Moody’s, Standard & Poor’s, and Fitch). Additionally, we used the overall Comdex score to more easily compare life insurance companies. The Comdex score is the average ranking a company receives from the four rating agencies, which is helpful because the four companies all use different letter/number systems.
Customer service reviews: We based this score on the results from the J.D. Power customer satisfaction survey and online customer reviews. We also looked at the number of complaints reported to the National Association of Insurance Commissioners (NAIC) and the ratio of those complaints compared to the national median.
Policy type and variety: We considered how many types of life insurance policies each company offers, as well as any distinguishing features that give customers more options.
Price: We gathered quotes for monthly premiums to understand how each company compares in price. We received individual quotes for a nonsmoker 40-year-old male and female in good health. Each policy was for $250,000 for a 10-year term.
Life insurance 101
If you’re unfamiliar with how life insurance works or the terms used, check out our Life Insurance 101 articles or jump down to our list of terms and definitions:
How Does Life Insurance Work?
Why Should I Buy Life Insurance?
Types of Life Insurance
How Much Life Insurance Do I Need?
Guaranteed Issue vs. Simplified Issue Life Insurance
State Farm took the top spot on our list with an impressive five out of five stars for financial strength, customer service, and policy variety. Most notably, State Farm was the award recipient of the J.D. Power customer satisfaction survey in 2016 for the third consecutive year. State Farm also has a very low ratio of complaints reported to the NAIC for individual life insurance. The company has excellent financial ratings, resulting in a 98 Comdex score (out of 100), putting it on solid financial ground.
One thing customers like about State Farm is the number and range of life insurance policy options. State Farm is balanced in this regard with four term, four whole, and three universal life policy options. The term policy lengths are limited to just 10, 20, or 30 years, and there is a nonmedical exam term life policy available.
State Farm really sets itself apart with the many ways customers can customize their policies with additional riders and payment options. Depending on the policy, you can choose to pay your premiums monthly, quarterly, semiannually, or annually, or you can pay for a whole life policy for a specific number of years or all at once. There are options for children’s term life insurance that can be converted to whole life, as well as a variety of accelerated benefit features. State Farm also offers universal life policies that cover two people, which is less expensive than taking out two separate policies.
One drawback with State Farm is its pricing. Even someone in the “Excellent” health category would end up paying a little more per month than someone in lower health category from another company. However, the difference isn’t enough to be a dealbreaker. The many policy features and options combined with State Farm’s stellar customer service ranking make it our top choice for a life insurance company.
Mutual of Omaha edged out the competition to take the number-two spot on our list, mainly due to its great pricing for monthly premiums. While pricing will vary for each customer, we found Mutual of Omaha’s quotes to be consistently lower than any other company we reviewed. If price is your main concern, be sure to consider Mutual of Omaha.
Mutual of Omaha has a good mix of policy types. There are two types of term life policies with lengths of 10, 15, 20, or 30 years. Additionally, there are two types of whole and four types of universal life insurance options. Mutual of Omaha offers plenty of optional riders as well, including a living benefit option, whole life children’s insurance, and accidental death insurance.
While Mutual of Omaha’s policy options are not as extensive as State Farm’s, we found a couple standout features that solidified its spot on our list. One is that both term and whole life policies are available without a medical exam, which is not something we found with many companies.
Another benefit is the Fit Underwriting Credit program, which allows policyholders to earn extra “fit” credits through healthy living. With more credits, you can potentially be in a better rate class with lower premiums. Term life policies can also be converted to whole life policies up to age 75, which is the highest age we found that option offered.
Although Mutual of Omaha’s financial ratings and customer service reviews are not exceptional, especially compared to our other top choices, they were high enough to ensure Mutual of Omaha’s second place on our list and our recommendation as one of the top life insurance companies.