Life insurance is one of those things we don’t think about until it’s too late. But opting to purchase a policy may be one of the most important decisions you’ll ever make because it can fill a significant void in the lives of your loved ones. A good life insurance policy can supplement or even substitute for your lost income should you become critically incapacitated or pass away unexpectedly.
But while we all know the purpose for getting life insurance, many people are at a loss when it comes to actually shopping for a reliable policy. How much coverage is enough? What types of coverage are available? Which company is the best one out there? These are just a few of the questions many consumers are left with as they explore the myriad of options before them. But the fact is, buying life insurance is really not much different than seeking out the right automobile insurer or home insurance policy. All of them are designed to protect you in the event of an unexpected occurrence.
With car insurance, you’re protected in case of an accident, but with life insurance your beneficiaries are protected in the form of compensation based on the amount of coverage you have purchased ahead of time. As you’ll find with automobile and home insurance policies, the terms and conditions of your life insurance coverage will dictate the amount of premiums you pay each month. There are other factors as well, mainly your current health condition and lifestyle. Much like the other types of insurance you can buy, the size of your policy and whether or not you match all of the underwriting criteria can also have an effect on your rates.
But we’re getting ahead of ourselves here just a bit, buying the right life insurance starts with understanding the different types of coverage that are offered by just about every company on the market.
Distinguishing Between Coverage Types
When you’re comparing life insurance coverage options and quotes it’s important to know what it is you’re looking for first. You may not have any idea between the various choices and that’s okay, many of the companies on our list have representatives who are ready to walk you through your options or, in lieu of a friendly voice on the other end of a phone, online resources that provide educational insight into buying the right type of life insurance. However, we’re going to go over the more common options that are purchased the most by the majority of consumers around the country.
Term Life Insurance
This is the most basic and affordable type of coverage among the list because it extends for a fixed duration of time and it can be as short as ten years and as long as thirty in most cases. If you pass away during the life of the term, then your beneficiaries receive the money from your policy. This can range from $25,000 on a low end to as high as $500,000 on average. Your health usually needs to be in great shape to qualify for this type of coverage and the other drawback is that if you don’t pass on and the term expires then you don’t see any of that money. It’s gone. Some companies may have renewal options to keep the coverage going into a new term and even more companies may allow you to convert the policy into another type beyond term.
Whole Life Insurance
Similar to a term life insurance policy in that your beneficiaries receive a cash payout in the event of your death, whole life insurance policies are different in that they continue for your “whole life”. It never expires as long as you continue to pay your premiums. There are a few advantages to this type of coverage, the first being that it never ends and the second being that your insurance company puts aside a portion of your monthly payments into a tax-deferred fund which you can then borrow against in the future.
Compared to term life insurance, whole life can get incredibly expensive with the former costing as little as $8 a month for every $100,000 you’re insured versus a premium that can get as high as $800 a month with whole life.
Universal Life Insurance
Universal works just like whole life in that there’s a death benefit paid to your beneficiaries and the coverage never ends or needs renewal. There’s even a modicum of cash value that comes with a universal life policy, just like you’ll find with the previous coverage. But the biggest difference is that universal coverage provides the insured with more choices and options for customization so that the policy better fits the needs of the purchasing individual. This coverage allows for you to set everything from how much of a payout should be sent to each beneficiary to the time your bill is due and you can even adjust how much your premium will be each month.
Much the same with whole life insurance, this coverage can also get expensive and many average consumers don’t consider this type to be within their budget range. Now without further ado, let’s take a look at the 15 best life insurances companies that we’ve come across for those looking to purchase a new policy.
1. Liberty Mutual
What’s great about Liberty Mutual is that they offer the three types of coverage, term at 10, 20, and 30 years, whole life, and universal, and they have an international presence in 17 countries. The company works with a wide array of affiliates to provide coverage for its clientele both here in the U.S. and just about anywhere abroad. That gives them a leg up over many of the other companies on our list.
Liberty Mutual also has affordable rates on each of its three plans, though whole life and universal will come with higher premiums, but the plans have cash value which can be accessed through policy loans. The company also offers final expense policies but you don’t deal with them directly, you will have to go through a third party provider that Liberty Mutual will work alongside to cover costs.
2. State Farm
The company that prides itself on customer service and garnered the highest ratings across the board with J.D Power and Associates, State Farm offers everything a customer would want to make the experience of purchasing life insurance a worry-free and simple process. Just contact one of their 18,000 agents nationwide and they will walk you through your choices of term life policies that range from as little as five to as many thirty years or one of their three whole life plans that are available. They also offer universal life for single recipients and couples as well as disability and long-term care coverages.
Beneficiaries won’t always get personal attention, however, unless they are able to contact your agent directly. If not, they’ll go through the national office which lacks some of the personal touch that you may prefer for your loved ones after you pass.
They say you get what you pay for, and that old adage is no more apt than with MetLife. The company offers a comprehensive variety of different policy coverages with a few features that are exclusive to them alone. You can choose from the standard policy types such as term, whole life, universal, as well as variable life and survivorship coverage. With term, MetLife is the only company with a term life option that extends until the age of 90 as opposed to a pre-determined period of time as you’ll find with just about every other insurer. Some of these coverages don’t even require a full exam, you just need to answer one or two health questions. Long-term care and disability plans are also available as well.
But just be warned, MetLife had a lot of terrific coverage at some of the highest rates of any company not just on this list but in the industry as a whole. So shop around and compare first.
Much like many of the other companies on our list, USAA offers a variety of different types of insurance, auto, home, and life, and they’ve received high marks from customers in all categories. But there is one drawback to USAA that many people encounter when exploring their options which is that the company’s services are limited only to active and former members of the U.S. military and their families. So unless you qualify under those requirements, you can’t access their coverage.
However, if this applies to you then USAA is a terrific choice not just for the types of policies they offer, which are many, but they cater specifically to veterans because their coverage does not have a “war clause”, something other companies sometimes put in their policies. This clause provides the insurer the ability to raise their rates on benefits for active duty military who have endured combat conditions. USAA won’t ever do this, which is good considering which segment of the population they serve exclusively.
5. Farm Bureau
In the same vein as USAA, Farm Bureau is also an exclusive insurer that does not offer its services to the general public. Instead, you must hold membership in a farm bureau in order to take advantage of their coverage options, of which they offer the main four: term, whole life, universal, and variable universal. All of them come with different advantages but they each offer the death benefit and the life policies all accrue cash value. Farm Bureau also provides policies for children for all but with variable life and getting a standard term policy doesn’t require a medical exam. Farm Bureau can be reached through any one of their insurance agents, ready to answer any questions to assist you in choosing the right plan.
Consumers who have a pretty good idea of what type of plan and coverage they are shopping for right now would do well to check out Farmers. They have an impressive array of plans available that can get quite specific and some of which aren’t offered by competitor companies. If you’re looking for a small amount of coverage, then their $50,000 term life plan may be just right for you. That same plan is only $25,000 in the state of California or Texas. Besides the typical life plans, Farmers also offers accidental death coverage which isn’t something every insurer provides to its clients. You have a few limits where age and state eligibility are concerned as these are available only to customers between 18 and 59 years old with policies that can range from $50,000 to $200,000 at just $8 a month for every $100,000 of coverage.
7. New York Life
An insurer is only as good as its financial stability and New York Life has been given the highest marks from every major rating agency in the industry. From A.M. Best to Standard and Poor’s, the company has received the highest grades for their capacity to meet all pending and future financial responsibilities to it policyholders. That means you can be sure the company will be there when you need them most and for life insurance customers that reliability is paramount.
The company offers an exhaustive number of coverage options and policy features, making them one of the most thorough life insurers on the market today. Their rates for coverage are as varied as their coverage choices, so anyone can find the right policy at just about any budget.
Allstate is among the most trusted and well-known companies on our list (holding that distinction along with State Farm) and they have been given a high rating for financial reliability from A.M. Best with an A+ for the company’s overall financial outlook. It’s one of the many reasons so many consumers trust Allstate for their insurance needs. However, the company is more often the first choice for providing auto and home insurance policies with life insurance coming in a distant second. They offer such policies but their coverage options are pretty standard including whole life, universal, and variable universal life.
Term life coverage is where the company excels most with two types available, basic which provides a limit of 15 years of coverage without any health exam and it would be best for people with pre-existing conditions, and Truefit which offers protection for 10-30 years and has more flexibility of benefits and coverage.
Like many of the other companies on our list, Transamerica offers a range of coverage options for people who may be looking to save a little money on their life insurance policy. The company offers choices that fall to the lower end of the price spectrum and flexible terms to fit just about any situation. If you go with their simple term life insurance, then you won’t need a medical exam and they underwrite policies for as little as $25,000.
Transamerica has so many choices for tweaking your policy that you may want to seek them out when you’re not quite sure what you want or need in your life insurance coverage. This is especially true since their customer service is considered one of the company’s best traits.
10. Mass Mutual
Another company that has received some of the highest ratings for long-term financial solvency, Mass Mutual has been given an A++ by A.M. Best and classified as “superior” for its credit outlook for the future. That means you can rest assured the company will still be around when it comes time to pay out your policy in full, particularly with whole and universal life policies. Much like with Transamerica, Mass Mutual also has a litany of flexible customization options for every type of policy they sell and these riders can provide additional protections such as long-term care, disability, and terminal illness coverage.
Mass Mutual even offers extra riders for funeral costs and extended coverage for a spouse. Their online quotes leave a little to be desired, however, and forget about using any kind of mobile app as they don’t even have one yet.
11. Northwestern Mutual
They may not have the household name recognition of many of the other names on our list, but Northwestern Mutual can match up with the big boys when it comes to coverage and policy options as well as long-term financial fortitude. Their coverage choices range from term, whole, and universal life policies with cash back and surrender options that let you end a policy early or receive the premiums that were paid out if you live longer than a temporary policy. All of their policies are fully customizable and flexible to best protect you and your family no matter what your current situation and should you run into an issue with making a payment on time, Northwestern is happy to work with you.
Choosing an insurer like Prudential can offer both advantages and disadvantages in equal measure. On the one hand, Prudential prides itself on being able to provide a wealth of coverage options at competitive prices, particularly in certain ways that cater to individuals who might have special needs or unique issues that need some extra additional protection. The company is well-known for offering extra riders to its policies where their typical coverages may not be fully adequate.
But with that in mind, Prudential also has some of the most strict and unforgiving underwriting criteria on our list. So prospective clients who have a history with smoking, DUI’s, diabetes, any forms of cancer, or have traveled to certain regions of the world that might affect one’s health might find this company a bit restrictive.
Considered one of the better overall choices for life insurance, AIG is often the choice for consumers who are wrestling with some pre-existing conditions, particularly those with diabetes, because their underwriting criteria is rather liberal and flexible. The company is eager to help those who may have been denied by other carriers. They offer term life coverage at 10 years all the way to 30 and they offer exceptional living benefit riders to most of their policies. AIG provides terminally ill policyholders the ability to receive some of their death benefits to help defray hospice care and medical costs.
Fidelity is often recognized as an investment firm that assists with financial planning, retirement planning, and investment accounts. So it may not sound too far out of the realm of possibilities that they would offer life insurance. The company provides universal and term policies and they don’t all require medical exams. But what stands out about Fidelity, and indicative of their brand, is that they offer beneficiaries with inheritance specialists to help manage the monies being paid out on a policy. The one major drawback with Fidelity is that they only pay out in lump sums, but the advantage to that structure enables beneficiaries to invest that money for the long term.
The company known for car insurance, and to a lesser extent home insurance, also helps to provide consumers with life insurance. They work with LifeQuote to help you track down quotes from the best companies for term, whole, and a variety of other life insurance policies. But it’s important to know that Geico doesn’t actually issue policies but instead helps to approve the companies that exist within the network from which LifeQuote helps consumers select their insurer.
Our Final Thoughts
As always, it’s important to do your own due diligence and compare what each company offers in basic coverage and policy additions that can extend your protections beyond what comes with your policy. These companies are some of the most solvent and financially stable in the industry, but there are certainly many other alternatives. This list may offer a good insight into the companies that provide life insurance, but there are definitely more that might have better rates and terms to serve your needs more effectively. Seek them out if you don’t find what you’re looking for here and compare what you’ll pay against what you (or your beneficiaries) will receive upon your ultimate demise.