Before considering policy options or pricing, you have to find a provider that will actually cover you. As a preliminary step, we cleared our list of companies that limit their customer base. That meant nixing providers that only write employer-sponsored group policies (like Metlife) and those with special eligibility requirements (like USAA, which only insures members of the armed forces). We also required that each company write policies in at least 40 states, so you won’t have trouble finding coverage in your area.
Financial security is the backbone of insurance — after all, a provider is only as good as its ability to pay out on a claim if need be. That’s why experts like Scott Johnson of Marindependent Insurance Services recommend that you “always check and understand the financial strength of an insurer you’re considering.” Luckily, there are a number of independent agencies that do this work for you, evaluating insurers’ financial health by measuring their current assets against their ongoing obligations.
We checked in with the three most prominent agencies to make sure that all of our top picks are in excellent financial standing. Each provider earned “Superior” scores from A.M. Best, which focuses solely on insurance, as well as top ratings from a second major agency: either “Very Strong” or better from S&P Global or “Excellent” or better from Moody’s. Each one is guaranteed to have the funds to pay out on your death benefit, should it come to that.
After vetting each company on our list for availability and financial strength, it was time to dive into coverage details. The best life insurance policies can be customized through add-ons called ”riders.” When tacked onto your insurance, they might extend coverage or bolster protections against unforeseen circumstances, like accidental death or disability. Some are even classified as “living benefits” and allow part of the death benefit to be accessed during your lifetime.
The most critical riders for you depends on the type of policy you’re considering. For instance, long-term care coverage is an important add-on for lifelong insurance but may not make sense for a short-term policy that’s set to expire while you’re still young. Keeping this in mind, we looked for providers that offer a wide range of riders to accommodate different needs. You can see a complete list of the coverage options we considered and who offers them in our guide on how to choose a life insurance provider.
- The 4 best life insurance providers
State Farm — Best Term Life Insurance
Northwestern Mutual — Best Whole Life Insurance
New York Life — Best Life Insurance for Seniors
TIAA Life — Best Cheap Life Insurance
Why we chose it
- Variety of term life plans
Unlike most companies — which carry one or two term life options — State Farm offers four different varieties that let customers match their coverage to their financial goals. The first, Select Term, is boilerplate, affordable term life that lasts for 10, 20, or 30 years. The second, Return of Premium insurance, is more expensive but allows you to recoup your paid premiums if you outlive the policy. Mortgage Term Life covers you for 15 or 30 years, with payments that decrease over time as your mortgage is paid off. Finally, Instant Answer Term provides up to $50,000 of coverage for those who do not wish to take a medical exam. Whatever your term life needs, State Farm likely has a plan to match.
Generous extension opportunities
Your life insurance needs could change at any time. For example, you may have kids living at home longer than expected, need to take out a second mortgage, assume care of an elderly parent, and so on. This means it’s important to look for term insurance that can be extended if necessary. State Farm has some of the most lenient allowances in that department. It lets you renew term coverage through age 95 or convert to a permanent policy through age 75, all without taking a medical exam. By comparison, many companies require a second health exam to renew or convert — meaning prices will go up. Some companies, like New York Life, may even require you to purchase an additional rider for conversion privileges. State Farm guarantees the right to extend coverage at no additional cost to you.
Best-in-class customer service
As of 2017, State Farm is enjoying its fourth year in a row as J.D. Power’s top-ranked company for customer satisfaction. The J.D. Power survey, which polled more than 6,000 life insurance customers, asks policyholders to rate their experience with a provider. Everything from policy options to billing and statements to customer interaction is taken into account — and State Farm scored top marks in every category. A guarantee of great service is especially important for life insurance. We’re confident that State Farm will be easy to work with and won’t muddy the claims process or add stress during an already difficult time.
Life insurance is pretty complex, so we appreciate any company that takes steps to simplify shopping and policy management. State Farm has a few unique tools to that end. First, the company offers quotes for term life insurance online. Not all providers do, and it’s a hugely convenient tool when comparison shopping. State Farm is also one of the few providers that lets you file claims online and provides a checklist of the information you’ll need to do so. Most companies tiptoe around the subject of claims and make information scarce, so State Farm’s straightforward approach is refreshing.
Points to consider
Rigid term lengths
State Farm only offers 10-, 20-, and 30-year term lengths (unless you opt for its 15-year mortgage term insurance). That means it’s not the best choice for people with very specific term needs: say, someone who only wants coverage for 12 years until their child moves out. If you’d prefer a more tailored term length, we suggest checking out New York Life, which lets customers choose a term life policy anywhere between 10 and 20 years.
Likely not your cheapest option
In our review of the best cheap life insurance, State Farm quoted slightly higher premiums than other companies we tested, including TIAA Life, Amica, Transamerica, and New York Life. Of course, premium comparisons need to be taken with a grain of salt. Life insurance quotes are highly personal, so State Farm may still end up being the best choice for you. We recommend requesting quotes from a few different companies to see how your coverage and pricing options stack up.
Why we chose it
Diverse policy riders
While riders are important for any life insurance policy — and all of our top picks offer a good selection — they’re especially critical for whole life insurance. Since your policy will be with you for the long haul, it should be able to adapt to all of life’s changing circumstances. That’s a big part of the reason we recommend Northwestern Mutual for permanent insurance.
The company has one of the best coverage selections we’ve seen, with 15 of the 16 popular riders we looked for. Its add-ons allow you to extend coverage to children or a spouse, excuse premiums if you become disabled, access the death benefit early in case of terminal illness, increase your death benefit to keep pace with inflation, and more. With Northwestern Mutual, you can build a policy that provides much bigger value than a death benefit alone.
Flexible entry point
We generally recommend whole life insurance for people with larger assets, as premiums tend to be expensive (around a few hundred dollars per month). That said, permanent insurance should still be accessible if you want it; meaning companies shouldn’t bar entry with sky-high coverage requirements. Northwestern Mutual’s whole life coverage starts at just $25,000, unlike many other companies that set their minimums at $100,000 or more. If you’re interested in whole life but not ready to buy into a huge policy, Northwestern Mutual makes it easier to get started with a reasonably sized benefit.
Above-average customer ratings
We put a high value on great customer service — especially for whole life insurance, as it will be around for the rest of your life. That’s why we love Northwestern Mutual: It’s one of only five companies with a perfect customer service score in J.D. Power’s 2017 survey. It’s considered “Better than most” across the board, from customer interaction to policy options to billing. You can count on helpful reps, a smooth payment system, and responsive claims processing. Plus, should you need to use any riders during the course of your term (Critical Illness, Disability, etc.), NWM will make accessing those benefits smooth and painless.
Strong dividend performance
One of the biggest benefits of a whole life policy is the ability to build cash value, and a sizeable annual dividend is an easy way to bolster that cash account. Of course, dividends are never guaranteed. They depend on a company’s performance, your policy size, and other factors. But your best bet is to pick a provider with a strong historical dividend record — and Northwestern Mutual is a frontrunner in that race.
The company (which has been around since the 1800s) paid out its 147th year of continuous dividends in 2017. With $5.3 billion to be paid out in 2018, it’s expected to remain one of the biggest dividend-paying life insurance companies on the market. That makes it a pretty sure choice for adding a yearly bonus to your whole life cash value account.
Points to consider
Sub-par online resources
Northwestern Mutual’s website notably sparse. It offers very basic details on the types of insurance it carries and nothing else. All signs direct you to “Take the next step” and contact an agent if you’d like to learn more. While you’ll have to talk with an agent eventually to get signed up, we prefer companies that provide enough policy information for shoppers to explore options on their own first. That way you have the means to comparison shop without an agent putting the sell on. Many companies provide comprehensive learning centers or FAQs to empower shoppers — in this regard, NWM falls far behind the pack.
No Child Term rider
The only rider on our list not offered by Northwestern Mutual is Child Term, an add-on that lets you extend coverage to your child or children for a small additional fee. If that option is important to you, we recommend looking at policies with either New York Life or State Farm — both of which do carry it.
Why we chose it
Range of death benefits
New York Life offers Guaranteed Universal Life policies that are ideal for seniors. Its death benefits are flexible: Policies start at just $25,000 but reach as high as company retention limits will permit (read: in the millions). This is important for seniors, whose policy needs can range from the very small (for example, a few thousand dollars to cover funeral expenses) to extremely large (say, someone who wants to use life insurance as a channel for inheritance). Whatever your coverage requirements, New York Life likely offers a benefit fit to size.
Generous age limits
Seniors should be able to opt into life insurance when they’re ready, whether that’s at age 65 or 85. We’re impressed by New York Life’s generous age-of-issue allowance. The company will issue GUL policies through age 85 with or without a medical exam. That “no-exam” qualifier is important, especially when it comes to seniors. For someone with a pre-existing health concern, an exam could mean pricier insurance or even (in extreme cases) being denied coverage. New York Life is one of the few companies that will issue a brand-new policy without an exam so late in life.
Survivorship insurance option
New York Life also offers a Survivorship Universal Life option (and is one of only two top GUL companies to do so, along with Lincoln Financial). It delivers the same flexible payment plans and guaranteed death benefit of GUL, but with one big difference: SUL extends that coverage to two people and only pays out after the second spouse dies. This ensures that funds can be used to cover outstanding obligations, as well as taxes on any assets that the first spouse may have passed on to the second. New York Life’s SUL is a good option for two spouses that want sizeable, joint coverage without paying for two whole policies. Death benefits start at $250,000 and only max out at company retention limits.
Points to consider
Average customer resources
While we stand by the quality of New York Life’s insurance products, we’re less blown away by its customer resources. There’s no online quote tool for easy price comparison, and unlike some companies (The Globe, for example), New York Life hasn’t yet developed a mobile app to make policy management convenient for its customers. Most every decision or change has to be made by speaking with a New York Life representative over the phone.
To top it off, the FAQ on New York Life’s website is unhelpful. The answers to basic questions (How much insurance do I need? How do I get a quote?) instruct you to contact an agent directly. We appreciate when companies are more forthcoming with information on their websites, allowing customers to shop around without the pressure of speaking to a salesperson. If you’re hoping to do most of your life insurance comparison shopping online, New York Life isn’t as accommodating as many other providers.
Why we chose it
Affordable term life
In our review of the best cheap life insurance, we requested quotes for a variety of profiles: male and female, older and younger, smoker and non-smoker. TIAA came back with some of the cheapest quotes for every scenario, compared to State Farm, New York Life, Transamerica, and Amica Life. Of course, we can’t guarantee that TIAA will be your cheapest option. Quotes are highly personal — that’s why we recommend comparing a few providers before making your final decision. What we can say is that TIAA is likely to be among the most affordable and should definitely make your list when comparison shopping for cheap life insurance.
Opportunities for policy conversion
Of course, the “best” insurance isn’t all about affordable premiums; TIAA also offers comprehensive coverage. We’re particularly impressed with this company’s conversion allowances: TIAA will let you switch from a term to whole life insurance at any point during the original policy, without taking a second medical exam. This policy is uncommonly flexible. Most companies limit the timeframe for conversion or charge an additional fee for the privilege. We appreciate TIAA’s generosity in the face of life’s unpredictability.
TIAA’s Life Wizard tool makes it a breeze to determine your death benefit need, get a life insurance quote, and apply for coverage online. You can work through the whole process from start to finish in just a few minutes. By comparison, many other top companies (like New York Life or Northwestern Mutual) will only provide a quote if you call and speak with an agent directly. TIAA stands out for letting customers view and select their policy details without a sales rep watching over their shoulder. Of course, if you prefer to have a real person walk you through your options, that’s absolutely an option with TIAA as well.
Points to consider
Limited rider selection
TIAA has the shortest roster of any of our top picks: eight of the 16 popular riders we considered, compared to 11 from State Farm or New York Life and 15 from Northwestern Mutual. Most notably, TIAA lacks many of the living benefits that we looked for. It doesn’t offer Critical Illness, Long Term Care, or Disability riders, to name a few of the big ones. Our other top picks offer these and then some.
That said, it’s important to remember that living benefits are more crucial with a permanent policy than a term life policy. If coverage is set to expire while you’re still fairly young, then chances are lower that you’ll need to access the death benefit early. Make sure to consider term length and personal risk factors when choosing a provider — your own needs will determine whether TIAA is the right choice for your insurance.
Little term flexibility
Every insurance company structures their term lengths a little differently. With TIAA, you can opt for a 12, 15, 20, or 30-year term. This isn’t unusual; many companies offer terms in increments of five or ten years. However, it doesn’t leave a lot of room for customization. Some people may have specific coverage needs — say, for 13 years until a mortgage is paid off — and would prefer not to pay for more than they require. If that sounds like you, try a company like New York Life, which offers terms anywhere between ten and twenty years.
Guide to life insurance
How to choose a life insurance provider
Identify the right type of life insurance for you
Term life insurance is best for most people: especially younger folks, people early on in their careers, and those with limited financial portfolios.
Whole life insurance is best for people who have robust financial portfolios, need another channel for inheritance, and/or have maxed out traditional retirement savings.
Universal life insurance is best for seniors and anyone else who needs permanent life insurance coverage on a budget.
Each company has its own underwriting process, meaning each evaluates your “risk factors” differently: things like health, age, family history, and tobacco use. You won’t know who can offer you the best coverage for your dollar until you look at a few options. Try using our quote tool to see which providers in your area offer the best premiums for your insurance needs.
Speak with an independent financial advisor
When comparing insurance companies, we recommend sourcing advice from an independent agent or financial advisor. Independent agents work with multiple companies, and it’s their goal to find you the best combination of coverage and price for your needs — rather than just selling you a policy from the company they represent.
Consider adding riders
Riders help to bolster your life insurance policy, adding protection against illness, disability, and financial troubles, or even extending coverage to family members. Before committing to a policy, identify the riders that might be important for you. We’ve put together a list of some of the most popular riders — and which of our top picks carry them — to help you get started.
What is the reason for buying a “whole life” insurance policy? As the name implies, “whole life” insurance is meant to last for your entire life. This is the opposite of a temporary life insurance policy that covers a specific amount of time such as a 10-, 20-, or 30-year term. There are many good reasons for purchasing a whole life policy. The whole life policy never expires and in most cases, the premium doesn’t increase over the life of the policy. Some policies also build cash value that you can borrow from. Want a little help finding the right policy? Here are some of the best options for whole life insurance.
01 Best Whole Life for Building Cash Value: MassMutual
Death benefits are guaranteed through the MassMutual whole life policy, which means the beneficiary of your life insurance policy receives a lump sum cash payment regardless of when you die. Cash value benefits build over the life of the policy. If you are looking to use your life insurance as a supplement for your retirement income, the cash value of a whole life insurance policy can help contribute as a source of income. The MassMutual whole life policy also offers policy dividends, meaning you earn cash dividend payments annually. MassMutual is “A++” rated by A.M. Best and Insure.com rates MassMutual highly in the area of “value for the price.”
02 Best Whole Life for Pricing: Northwestern Mutual
Northwestern Mutual is the largest direct writer of life insurance in the United States. It offers policy dividends payments for its whole life insurance policy. Northwestern Mutual received a 4-out-of-5 score in a recent customer satisfaction rating from J.D. Power & Associates. The waiver of premium rider from Northwestern Mutual is available, which pays your insurance premium should you suffer a disabling injury. Premiums are guaranteed not to increase and the whole life policy from Northwestern accumulates cash value that is tax-deferred. Northwestern Mutual’s whole life insurance rates are very competitive, particularly for seniors.
03 Best Whole Life for Dividend Returns: New York Life
New York Life
New York Life has consistently received the highest financial strength rating from four major insurance rating organizations (A.M. Best, Fitch Ratings, Standard & Poor’s and Moody’s Investor Services). Why is financial strength important in your life insurance company? The financial strength of an insurance company shows its ability to meet financial obligations and pay any claims presented. For policyholders, this means higher dividend payments.
04 Best Whole Life for Optional Benefits (Riders): MetLife
MetLife received the No. 2 ranking in customer satisfaction from J.D. Power & Associates. The MetLife whole life insurance policy offers a guaranteed level premium and cash value benefits. Dividend payments are earned starting with the second year term of the policy. MetLife gives policyholders the options of adding more coverage to the basic policy by something called a policy rider. Several policy riders are available: The Enrichment Rider (option to add more coverage and cash value over time as you need it); Accident Death Benefit (additional payment for a death as the result of an accident); Child Term Rider (coverage added for your children); Enhanced Care (cash value available for prolonged illness with access to up to 90 percent of the policy value); Flex Term Rider (a term life policy can be added that adds to the coverage for a period of time); and the Disability Waiver (premium is waived for a disability of six months or more).
05 Best Whole Life for Final Expense Coverage: Transamerica
Transamerica’s whole life insurance policy is available in amounts up to $50,000. Group whole life insurance is also available through your employer as a voluntary benefit in amounts up to $25,000. Small whole life insurance policies are available through Transamerica designed to cover funeral costs and other final expenses. Premiums are guaranteed for life as long as you keep paying your premium. Cash accumulation (tied to the performance of investments) is available that can be borrowed from and the tax payable on cash accumulation can be deferred. The accelerated death benefit pays a portion of the policy’s death benefits if you have a terminal illness, chronic illness or a critical illness such as a heart attack or stroke after your policy goes into effect. Transamerica has an “A+” financial strength rating from A.M. Best.
06 Best Whole Life for No Medical Exams: Mutual of Omaha
Mutual of Omaha
Mutual of Omaha does not require a medical exam for coverage and offers whole life insurance in values from $2,000 to $25,000. Whole life insurance policies are available for individuals aged 45 to 85 (in NY, 50 to 75). Children’s whole life insurance is also available. Mutual of Omaha has an “A+” financial strength rating from A.M. Best. There is a graded death benefit for the first two years of the policy, meaning, if during the first two years of the policy the death results from natural causes, the beneficiary receives all premiums paid plus 10 percent. For death by accidental injury, full benefits are available as soon as the policy becomes effective. Coverage is guaranteed for as long as you continue to pay your policy premium. Since Mutual of Omaha is a mutual firm, it pays back policyholders in the form of dividend payments.
07 Best Whole Life for Cash Value Options: Guardian
In addition to paying policy dividends, Guardian also excels at options available to customers looking to accumulate cash value. In fact, there are eight different cash value options, far more than other life insurers. Guardian has an “A++” financial strength rating from A.M. Best. The whole life policy through Guardian offers guaranteed premium, cash value accumulations, potential dividend payments and tax benefits such as being able to defer paying taxes and the dividends accumulating on your policy. Also, if you have to borrow against your policy, the loan may not count as income for tax purposes. Several riders are available, including waiver of premium, enhanced accelerated death benefit, guaranteed insurability and the accidental death benefit.
08 Best Whole Life for Paying off Your Premium Early: State Farm
Courtesy of State Farm
A whole life insurance policy from State Farm has many benefits, including lifetime coverage, access to cash value (tax deferred), guaranteed death benefit and level premium amounts over the life of the policy. Policy limits are available up to $100,000. State Farm also has what they call “Limited Pay Life Plans” for 10, 15 or 20 years. What this means is that you can completely pay for your life insurance premium for the term you choose, in 10, 15 or 20 years. This will help you avoid having to pay life insurance premiums during your retirement.
You are eligible to earn dividend payments but these are not guaranteed. If you are looking for a value in whole life insurance, State Farm offers more policy discounts than many other insurers; (67 percent vs. 40 percent for the industry average). State Farm offers online quoting for its whole life policy. State Farm is “A++” rated by A.M. Best and has the highest rating from J.D. Power & Associates in the area of customer satisfaction.