How to compare the best life insurance companies
Shopping for life insurance can be intimidating. With the number of carriers available, each one offering different types of life insurance, it can be difficult to know where to start. When studying life insurance carriers, there are some metrics that you can rely on to help effectively compare carriers. Does one company offer a wide range of life insurance policy types, as well as riders and endorsements to personalize your policy, compared to another? What does the qualification process look like, and what might your estimated life insurance premium be?
From there, you can also compare companies’ financial strength ratings and customer service scores from trusted third-party agencies, such as AM Best and J.D. Power, for an unbiased view of which providers may excel in these areas and give you the best experience.
How Bankrate picked the best life insurance companies for 2022
To find the best life insurance companies of 2022, Bankrate’s editorial team started by researching the largest life insurance carriers on the market. Areas of consideration included customer satisfaction, general affordability and financial strength ratings from trusted, unbiased sources, including J.D. Power and AM Best. We also looked at whether or not each insurer offers a mobile app, online portal, 24/7 customer service and local agents to determine each company’s accessibility. We then factored in each company’s coverage capacity (the maximum dollar amount of each company’s death benefit), the number of riders for optional coverage and the availability of a no-medical exam underwriting option. More information about each carrier is available below to help you learn about their benefits and drawbacks.
Bankrate’s picks for the best life insurance companies
|Guardian||Life insurance coverage without a medical exam|
|MassMutual||Whole life insurance|
|Mutual of Omaha||Digital accessibility|
|Northwestern Mutual||Customer service|
|Nationwide||Universal life insurance|
|State Farm||Term life insurance|
Best for: Life insurance coverage without a medical exam
The Guardian Life Insurance Company of America ranks well in customer satisfaction and financial strength and offers the most term life insurance riders on our list. According to the National Association of Insurance Commissioners (NAIC), the company also has fewer than baseline policyholder complaints and offers multiple no-medical exam policy options.
Guardian provides easy policy management through its network of more than 3,000 financial representatives across the nation and online account management. Guardian carries an A++ (Superior) financial strength rating from A.M. Best and offers multiple coverage options depending on your life stage, goals, needs and budget. It also offers relatively inexpensive life insurance for millennials.
|Dividends available on some policies||Must purchase coverage through an agent|
|Easy online management||Rider details limited online||Policies available for HIV-positive applicants|
|Multiple no-medical exam policy options|
Learn more: Guardian Life Insurance review
Best for: Whole life insurance
MassMutual won a 2022 Bankrate Award for best whole life insurance thanks to its A++ (Superior) financial strength rating from AM Best and for offering 13 whole life insurance riders, the most of any company we analyzed.
MassMutual, also known as Massachusetts Mutual Life Insurance Co., is a U.S. life insurance company owned by its policyholders, allowing select policyholders to earn dividends when the company does well. MassMutual offers an online application process for term life policies. Coverage takes effect immediately upon application approval, and applicants must usually complete medical exams for all term and universal life policies.
|Free coverage for qualifying low-income families||Limited online quotes|
|Convenient mobile app||Medical exams required for term and universal life policies|
|Numerous riders||No final expense policies|
|Superior financial strength||Below-average J.D. Power customer satisfaction scores|
|High coverage capacity (the maximum dollar amount of a policy’s death benefit)|
Learn more: MassMutual Life Insurance review
Mutual of Omaha
Best for: Digital accessibility
Mutual of Omaha ranked just behind the overall winners of Bankrate’s best life insurance study. The company ranks well above average in J.D. Power’s customer satisfaction survey and earned a financial strength rating of A+ (Superior) from AM Best. Mutual of Omaha offers no-medical exam life insurance options, and its digital features could make managing your life insurance policy easy.
Some people may be looking for the best online life insurance experience. In terms of accessibility, Mutual of Omaha offers a robust digital app, an online portal, local insurance agents and a 24/7 phone line for accepting your payments.
|Easy online quote process||Does not provide dividends|
|Offers digital money management app||Not all life insurance can be quoted online|
|High J.D. Power customer satisfaction scores|
Learn more: Mutual of Omaha Life Insurance review
Best for: Universal life insurance
Nationwide won a 2022 Bankrate Award for best universal life insurance coverage for its accessibility and wide range of riders.
In terms of accessibility, Nationwide offers a user-friendly mobile app, streamlined online portal and a network of independent agents across the U.S. The multi-line insurer offers seven riders for universal life, the second-most of any company on our list. Nationwide also received the second-highest J.D. Power customer satisfaction score on our list and a financial strength rating of A+ (Superior) from AM Best, making it one of the most competitive life insurance companies in the marketplace in terms of third-party ratings.
|No-medical exam options available for universal, whole and term life insurance programs, depending on the customer’s eligibility||Limited online quotes|
|Second-highest J.D. Power customer service score||Policy acceptance not guaranteed|
|Plentiful rider options||No 24/7 help line|
|Can bundle life insurance with other Nationwide policies for significant potential savings|
Learn more: Nationwide Insurance review
Best for: Customer service
Northwestern Mutual received top-tier customer satisfaction scores and financial ratings, scoring just behind the overall winners of Bankrate’s study on best life insurance companies. Northwestern Mutual sells coverage through agents, which could be a good fit for those who prefer face-to-face interactions over a digital purchase process.
Earning an A++ (Superior) financial strength rating from AM Best, Northwestern Mutual shows a strong history of being able to pay claims. As a mutual company, it is owned by its policyholders. Northwestern Mutual offers a variety of term, whole and universal life insurance policies. The company ranks highly in Bankrate’s internal study of accessibility for providing a mobile app, online portal, local agents and a 24/7 customer service phone line that accepts premium payments.
|Dividends available on whole life insurance policies||Must buy coverage through an agent|
|Flexible policy options||Limited information available online|
|Wide range of riders|
|Easy-to-use online portal and mobile app|
Learn more: Northwestern Mutual Insurance review
Best for: Policy personalization
Prudential is the third-largest U.S. life insurer based on new market share rankings from the Insurance Information Institute (Triple-I). Prudential Financial ranked just behind our overall best life insurance company winners in customer satisfaction and accessibility. It offers plentiful rider options, easy-to-use online tools and live agent support.
The company has fewer overall policyholder complaints than average, according to the NAIC’s complaint index. The company has nine universal life insurance riders — more than any other carrier on our list. It offers a variety of term life and universal life insurance policies, giving customers a greater level of flexibility than some of its competitors. However, keep in mind that Prudential does not offer whole life insurance or no-medical exam policy options.
|Live agent support available||Medical history required for quotes|
|Online tools||Limited online quotes|
|Plentiful rider options||Selective policy options|
|Variety of term and universal life policies||Below-average J.D. Power customer satisfaction scores|
Learn more: Prudential Life Insurance review
Best for: Term life insurance
State Farm won a 2022 Bankrate Award for best term life insurance, thanks to its top-notch customer service and accessibility tools. As one of the top life insurance companies, State Farm also received the highest customer satisfaction score from J.D. Power on our list.
State Farm offers accessibility tools including a 24/7 customer helpline, easy-to-use mobile app, online portal and more than 19,000 exclusive local agents across the U.S. With an A++ (Superior) rating from AM Best, State Farm has a history of financial stability. The carrier offers a variety of term life insurance options as well as whole, universal and variable universal options.
|Numerous policy and rider options||$10,000 maximum for final expenses insurance|
|No medical exams required for some policies||Age-dependent exam plans|
|Can bundle life insurance with other State Farm policies for significant potential savings||Can only purchase from an agent; no online option|
|Best J.D. Power customer satisfaction rating on our list|
Learn more: State Farm Insurance review
What is life insurance?
Life insurance is a contract between you and an insurance company. In exchange for regular payments, the insurance company pays out a sum of money to your loved ones in the event of your death. These funds, also known as a “death benefit,” can help with covering expenses such as funeral costs and unpaid medical expenses. Depending on the type of policy, this sum can also be paid out after specific life events, such as a diagnosis of terminal or critical illness, or after you reach a certain age.
How does life insurance work?
When you purchase a life insurance policy, you are making an agreement with an insurance company to make regular payments toward continued coverage with the policy. You will also choose a beneficiary, which could be a person or organization, that the insurance company will pay once you pass away. To claim the funds, your beneficiary would have to file a claim with the company, who will then process it before making the payment.
Types of life insurance policies:
There are many types of life insurance policies, but in general, they fall under two categories: term life insurance, which is only in force for a set time, and permanent life insurance, which is in effect as long as premiums are paid in most circumstances. Permanent life insurance comes with a cash value component. Depending on your individual needs and preferences, having one or both of these types of policies could be an integral part of your financial plan.
- Term life insurance: With a term life policy, you and the life insurance company enter into a contract for a specified death benefit amount for a set period of years. Term life can be an affordable option for those wanting a large death benefit amount, but there are also drawbacks. A term life insurance doesn’t have the savings or investment potential of permanent life insurance, and because it’s only active for a set number of years, it’s possible to outlive your policy and receive no benefits. However, you may be able to convert it into a permanent life policy if your company offers this.
- Whole life insurance: A form of permanent life insurance, whole life insurance usually comes with set premiums and a cash value account. While you may not be able to change the policy after it is active, having the cash value component can be useful for those who need a low-interest loan.
- Universal life insurance: Another form of permanent life insurance, universal life insurance is known for its flexibility. The premium and death benefit can be adjusted as needs or lifestyles change. It also has a cash value component and can come with different investment strategies to help you grow the value of the policy.
How much does life insurance cost?
The cost of life insurance depends on a number of rating factors. Personal aspects like your age and health play a large role. Generally, younger people and healthier people pay lower rates. Additionally, the type of policy you choose, your coverage limits and what riders you include will affect rates. Permanent policies tend to be pricier, and higher coverage limits generally mean higher rates. Adding riders will also likely increase your premium. While shopping around might help you find cheaper life insurance, keep in mind that rates don’t really vary between companies for the same exact policy type and coverage limits. You may be able to find a cheaper policy by looking at different types of life insurance, however, or adjusting the death benefit amount.
How to choose the best life insurance company:
When you are ready to buy life insurance, taking a few extra steps can ensure you find the best policy based on your wants and needs. Here are some things to look for when choosing the best life insurance company for you:
- Ask for recommendations: Your friends and family may have life insurance with a company they love. You may want to ask them about their experiences with customer service at these companies.
- Review customer satisfaction ratings: You can visit the J.D. Power website or check the carrier reviews in this article to review each insurance company’s customer satisfaction ratings. J.D. Power assigns each company a score out of 1,000 possible points.
- Assess financial stability: We recommend looking at a company’s financial strength rating from a third-party agency such as AM Best, Standard & Poor’s (S&P) or Moody’s. A company with a low financial stability rating has a poor history of being able to meet financial obligations and may struggle to pay life insurance death benefits to policyholders if a high volume of claims are filed simultaneously. It is important to have the assurance that your insurer has a history of strong financial stability.
- Look at customer reviews: Dozens of consumer-oriented sites such as Google, Yelp and Consumer Affairs provide reviews from insurance companies’ customers. It may be most helpful to ignore the outlier reviews and focus on the overall average instead. What did the average customer say about the company you are considering? Are the items they complained about important to you? For example, if someone complained that the company does not offer a mobile app, but a mobile app is unimportant for your needs, you may not need to consider that review in your assessment.
- Get multiple life insurance quotes: It can be beneficial to compare life insurance quotes from multiple carriers and compare prices to help you find the best cheap life insurance policy. Keep in mind that prices will vary more widely for different policy types, although additional policy features could be another cost-influencing factor.
- Seek professional counsel: While a life insurance calculator can be useful, you may be better able to determine your needs by talking with a financial advisor or a licensed life insurance agent if you have more complex needs or questions. A life insurance agent can help you decide what type of life insurance coverage is right for you and how much life insurance you need. When choosing between the many types of life insurance, it may help to get a second opinion from a professional.