Find the best life insurance companies in 2021. Learn all about coverage options including types of policy and premiums.
9 Best Life Insurance Companies of 2021
Here are our picks for the 9 best life insurance companies in 2021:
- Northwestern Mutual – Best Life Insurance for Customer Satisfaction
- New York Life – Best Life Insurance for Mutual Insurance
- State Farm – Best Life Insurance for Immediate Term Coverage
- Liberty Mutual – Best Life Insurance for Quick Approval
- Bestow – Best Life Insurance without a Health Exam – the best way to get coverage during COVID19
- Haven Life – Super-fast access to MassMutual term life policies online
- Policygenius – Easily compare life insurance quotes from multiple carriers
- HealthIQ – Good health can lower your monthly premium
- Sproutt – Pricing based on their Quality of Life index
Northwestern Mutual: Best Life Insurance for Customer Satisfaction
|JD Power Rating||790/1000|
|Medical Exam Required||Yes|
- Offers term and permanent life insurance policies, which can be combined
- Term policies can be converted to permanent policies gradually over time regardless of your health status
- Premium options of 10- to 20-year term length have a fixed price, your monthly premium will remain the same
- There is a fixed window of time in which you can change your term policy into a permanent one
- Life insurance through Northwestern must be purchased through a licensed agent
Our top-rated insurance company, Northwestern Mutual, has the highest financial and customer satisfaction ratings awarded to any American life insurer. Northwestern Mutual also has the largest market share out of all life insurance companies in the nation with over $11 billion in premiums written.
Northwestern has two term life insurance options: annually renewable and level premium. As the name suggests, annually renewable policies renew automatically for a set period (up to age 80) and have more affordable upfront costs.
New York Life: Best Life Insurance for Mutual Insurance
|JD Power Rating||784/1000|
|Medical Exam Required||Yes|
- A solid option if you’re looking for flexible life insurance plans
- Term coverage options include yearly and level premium convertibles
- The yearly convertible policy starts with a low premium payment which renews annually, the life insurance rates increase gradually per year
- Once the level premium convertible option term ends, the policy cost increases
- If you choose to convert either of these term policies to permanent ones, you’ll have to pay a higher premium
New York Life stands as one of the nation’s oldest mutual insurers. As with Northwestern Mutual, the company’s shares are owned by their policyholders (depending on the specific policy) who benefit from annual dividend payouts. The company paid out 1.9 billion in dividends in 2020.
New York Life has both term and permanent life insurance options, and their term policies can also be converted to permanent ones later on.
State Farm: Best Life Insurance for Immediate Term Coverage
|JD Power Rating||838/1000|
|Medical Exam Required||Yes |
(Except for Instant Answer Term Insurance)
- Monthly premium stays the same for the initial term until it’s renewed
- Customize your policy with optional add-ons and riders such as children’s term rider or waiver of premium with disability
- The Return of Premium option builds cash value, which you can borrow against, and gives back the value of your policy if you outlive the initial term
- Convert the policy into a permanent one up to age 75, regardless of your health status
- State Farm agents can be reached by phone or email
- If you renew the policy for an additional term your premium will increase
- No live chat option available on the site
- The insurer is not licensed in NY, MA, or WI.
State Farm stands out for its top-ranking customer service record — ranking as the #1 company in Overall Customer Satisfaction according to J.D. Power’s 2020 U.S. Life Insurance Study. With just a single complaint, State Farm’s NAIC complaint ratio is also significantly lower than the national median for a company of its size.
If you’re in the 16 to 45 age range, you may qualify for State Farm’s Instant Answer Term Insurance, which features a $50,000 amount of coverage that doesn’t require a medical exam for the underwriting process. You can get rate quotes by talking to one of the company’s licensed agents, but policies can only be approved in the office.
State Farm also offers Select Term and Return of Premium life insurance. Select Term is available for 10-, 20-, or 30-year term lengths with a guaranteed benefit.
Liberty Mutual: Best Life Insurance for Quick Approval
|JD Power Rating||n/a|
|Medical Exam Required||Yes (Except for Passport Term Insurance)|
- Approval process in as little as 10 minutes with no medical exam required
- Immediate online approval of simplified issue insurance
- Liberty Mutual excels in its simplified issue term offering, Passport Term
- Web interface feels dated and could provide a better user experience
With Liberty’s Passport Term policy you can get terms for 10, 15, 20, and 30 years with the option to renew the coverage at the end of the term and convert to a whole life policy.
With above-average customer satisfaction ratings, strong financial standing according to A.M. Best, and a below-average customer complaint ratio, Liberty Mutual a strong candidate for those looking to purchase term life insurance, and quickly.
Best Online Life Insurance Options
If you’re looking for a simplified and more efficient way of shopping for term life insurance online, any of the options below could be a great alternative.
Bestow: Best Life Insurance without Health Exam – the best way to get coverage during COVID19
- Complete the application process online in minutes
- No medical exam is required
- Premiums start from $16/mo
- Assistance available through phone, email, and live chat
- Only those between the ages of 21 and 55 may apply
- The 20-year term is only available for those under 45 years old
- Bestow does not offer policies in New York
Bestow is a marketplace designed for those who value a quick application process and simple term life options. The company offers 2-, 10-, and 20-year terms, with an amount of coverage from $50,000 to $1,000,000.
Bestow’s policies are issued by North American Company for Life and Health Insurance.
Haven Life: Super-fast access to MassMutual term life policies online
- Get a quote in minutes
- The online form calculates a benefit amount based on your annual income, number of household members, and combined debt
- Policies are underwritten by MassMutual, one of the oldest insurers in the nation
- Policies include a complimentary rider which gives you free or discounted access to a fitness app, and a customized, state-specific, and legally-valid will
- Doesn’t allow spouse or child riders, only individual insurance
- Only offers term life insurance
- Underwriting requires access to your full medical history
Haven Life is another great option for those looking to purchase term life insurance quickly and easily online, with the warranty and financial backing of a well-established company. Haven Life offers 10-, 15-, 20-, or 30-year term life options featuring guaranteed level monthly life insurance rates and benefit amounts of up to $3 million.
Policygenius: Easily compare life insurance quotes from multiple carriers
- Brokerage includes many types of insurance through major carriers
- Users can create a will or trust using attorney-approved tools
- Live chat and phone assistance, 7 days a week
- 24/7 email assistance
- Policy premium quotes or ranges are non-binding
- The final price will be determined after application once the underwriting process is completed by the insurance company
Policygenius is an independent insurance broker that partners with a range of companies. Policies are offered through insurers such as AIG, Banner Life, Brighthouse, John Hancock, Lincoln Financial, Mutual of Omaha, Pacific Life, Principal, Protective, Prudential, SBLI, and Transamerica.
HealthIQ: Good health can lower your monthly premium
- Find quotes from various life insurance carriers and products in one place
- Lower pricing based on your current health, health knowledge, and active lifestyle
- Special rates through specific insurance partners
- Compare rates against 30 different carriers
- Online quotes require users to agree to be called by agents
- All rates and savings advertised are hypothetical and subject to change
- For an online-based insurance broker, the website could be much more user friendly to navigate.
HealthIQ is the ideal option for the health-conscious consumer. The company partners with over 25 national insurance companies, including Prudential, Mutual of Omaha, and Transamerica.
HealthIQ’s mission is to reward those leading active, healthy lifestyles with lower life insurance rates. Rather than looking only at your health history, HealthIQ takes into account your current health, health literacy, and activity levels to determine the monthly premium.
Sproutt: QL Index determines bases your premium on your overall well-being score
- Fast approval
- User-friendly web interface
- Offers term and whole life insurance policies without medical exams
- QL Index evaluates your overall well-being based on five factors: movement, sleep, emotional health, nutrition, and balance
- No phone assistance over the weekend
- Coverage may be denied based on BMI, previous bankruptcy, or specific medical conditions
Newcomer Sproutt Insurance is an independent broker that matches consumers with insurers — such as Prudential, Nationwide, and AIG Direct — who provide standard term or whole, no-exam, or guaranteed policies.
What makes Sproutt different is their unique approach to evaluating their users’ life insurance rates via an individualized “Quality of Life Index” determined through a short quiz covering healthy habits, exercise, and emotional wellbeing.
The company’s insurance brokers are licensed by law in all 50 states where they do business, as well as in the District of Columbia.
Other Life Insurance Companies We Considered
To determine our list of best life insurance companies, we looked at three key areas: financial stability, customer experience, pay-out warranty, and product offerings.
To rank in our top four, companies had to meet strict standards, such as having high marks in J.D. Power’s 2020 U.S. Individual Life Insurance Study, an NAIC complaint ratio well below the national average, and solid financial ratings (A and above) from A.M. Best.
Although this eliminated many companies from making our limited cut — MetLife, Lincoln Financial, Prudential, MassMutual, TransAmerica — there are still plenty that offer life insurance plans that can fit your needs, budget, and standards.
The Basics of Life Insurance
How Your Policy is Priced
Besides speaking to your financial advisor or a life insurance agent, it’s helpful to understand what factors go into determining your life insurance rates.
Factors that Affect Life Insurance Premiums
Your premiums will increase with the risk of disease as you get older.
Women have a higher life expectancy than men, so their rates tend to be lower.
Compromised health means higher premiums, the opposite is also true.
FAMILY MEDICAL HISTORY
A family history of cancer or heart disease can increase rates.
Smokers will pay higher premiums than non-smokers.
LIFESTYLE & OCCUPATION
High-risk jobs or hobbies (mining, fishing, transportation, rock climbing, skydiving) can mean higher premiums.
Types of Life Insurance Policies
Term Life Insurance
Term life insurance plans last for a predetermined period (most commonly 10-, 15-, 20-year terms), and then it expires. If you were to pass away before the term length is over, a death benefit would be paid to your designated beneficiaries to cover funeral expenses, help replace lost income, and leave your family inheritance.
The death benefit can be paid out as a lump sum, in installment, or as an annuity. When you choose a lump sum payout, your beneficiary receives the whole benefit at once. Conversely, if you choose to annuitize your benefit payout, it’s spread out when into fixed installments.
Term life insurance policy is the most easily accessible and the easiest one to understand, according to Alison Salka, Senior Vice President and Research Director at the Life Insurance Marketing and Research Association (LIMRA).
Permanent Life Insurance Policies
The other option available is permanent life insurance policies, which include whole and universal life. These options are commonly used as tax-free financial products for their cash value component. According to Chris Huntley from InsuranceBlogByChris, “whole life insurance is oversold and not needed in 90% of cases. It’s sold as more of an investment than as life insurance.”
The main difference between a term life insurance policy and permanent life insurance policy is that term doesn’t accrue a cash value, whereas permanent (whole, universal, and other variations) does. Depending on the policy, you can borrow against that money and use it as a savings tool or an investment vehicle. But keep in mind that, according to Huntley, it could take seven to ten years to break even on whole life policies because of their upfront fees.
Another important factor, brought up by Salka, is that consumers often overestimate the cost of life insurance. That’s why, in her opinion, term life insurance is the appropriate and understandable option for average consumers looking for standard coverage.
You can learn more about these life insurance plans in detail in our Guide to Life Insurance Policies.
Frequently Asked Questions About Life Insurance
We spoke to a number of experts — including insurance strategist David Gastwirth, Alison Salka of LIMRA, and Chris Huntley — to address your queries about life insurance coverage and how to shop for it.
1)What is life insurance?
Life insurance is a policy taken out on your life, and paid out in the event of your death, that protects those that depend on you financially. The funds can serve to pay your final medical expenses or be used to set a trust fund for your children’s tuition, estate planning, or to pay off remaining debt and mortgages.
2) When is the best time to get life insurance?
Meaningful life events often make people reevaluate their need for life insurance, said Alison Salka. Marriage, children, as well as the acquisition of a house or other responsibilities, might be the best time to get life insurance to lessen the financial repercussions and provide you with the peace of mind of relieving some of the burdens from your loved ones.
3) I have life insurance through my employer, is that enough coverage?
Employer-provided group insurance plans are usually limited to five times your base salary, which insurance strategists such as David Gastwirth say is not enough. “My rule of thumb is that your life insurance should be 10 to 15 times what you make,” said Gastwirth. He explains that underwriting on group policies can cost more as they may apply smoker rates for all under the policy. In his opinion: “Your insurance portfolio should be individually owned.”
4) Which is better, term or whole life insurance?
In regards to whether term or whole life insurance is better, insurance strategist David Gastwirth has to say: “I have a philosophy about insurance. If there are people who depend on you financially, who will have a financial issue if you are no longer here, I want you to concentrate on death benefit protection only, and that would be term insurance. (…)
“If you would like to have a vehicle by which you can accumulate and distribute cash in a tax-efficient manner,” he continued, “whole life insurance is a wonderful product for that purpose, but not if you’re focused on the death benefit.”
5) What does a life insurance death benefit cover?
A life insurance death benefit can cover final expenses (funeral, burial, outstanding medical bills), mortgage payments, debt, a child’s college tuition, domestic labor expenses, estate taxes, and living expenses for surviving dependents.
7) What’s the best way to calculate how much term insurance I need?
There’s no one-size-fits-all answer to calculating your term insurance needs. “You pay into it for as long as you need it. Hopefully, you have a financial plan in place so that at the end of your term, whether it’s 10, 20, 30 years, you no longer need that,” said Chris Huntley of Insurance Blog by Chris. The best way to determine how much term insurance is right for you is by working with a financial planner, he continued.
Life Insurance Glossary
- Underwriting – The underwriting process is used by insurance companies to get a picture of how much your policy will cost based on health and family history, among others, by assigning an underwriting class that determines the life insurance rates.
- Death Benefit -The sum of money paid to your beneficiaries in the event of natural or accidental death.
- Premiums -The cost of your life insurance plans, paid monthly, annually, or semi-annually.
- Beneficiary – Person, organization, or charity that receives the payout of the death benefit.
- Rider – Coverage add-ons to your policy at an increased price, such as an accelerated death benefit, chronic illness, or long term care.
Our research into the best life insurance companies takes into account such factors as financial strength as evidenced by each company’s market share and A.M. Best rating; customer experience based on J.D. Power’s 2020 U.S. Individual Life Insurance Study scores; the National Association of Insurance Commissioners’ (NAIC) Life and Fraternal Insurance Industry report; and feedback from experts across the industry.
We consulted with life insurance researchers, independent consultants, insurance agents, and brokers, along with economists specializing in the insurance sector — and representatives from LIMRA. After those consultations, we narrowed the scope of our research to focus on the life insurance products that everyday Americans are most often seeking: term life insurance with simplified underwriting.
It’s when shopping for quotes or making changes to a policy that you most appreciate a company that offers superior customer service. That’s why the most important factor to consider when shopping around for life insurance is the insurers’ track records for customer satisfaction.
We used J.D. Power’s 2020 U.S. Life Insurance Study and the NAIC’s Complaint Ratio Report to measure each company’s performance concerning serving customers efficiently.
J.D. Power’s study ranks the overall customer satisfaction of the largest life insurance providers in the United States. It uses an index model that measures insurers’ performance in application and orientation, communications, interaction, product offerings, price, and statements. The companies are then ranked on a scale of 1000 possible points.
The National Association of Insurance Commissioners’ (NAIC) Complaint Ratio Report catalogs the number of complaints filed against an insurer, compared with the other companies in the market.
Money favored companies with high customer satisfaction ratings and a low complaint ratio.
Policies and Coverage
Life insurance offerings are fairly similar across the board, so we favored companies that offer a convenient purchase process and the flexibility to customize a policy. We also prioritized companies that offered innovative term insurance products and a variety of riders.
An insurer’s financial strength is another important factor when shopping for life insurance. We used A.M. Best ratings to determine each company’s ability to pay out claims, selecting only those that were deemed superior and excellent in financial strength. Companies with ratings below B (fair), were eliminated.
While this factor is often overlooked by consumers, financial stability matters. When an insurance company declares bankruptcy, for example, their client and product portfolios are sold to other insurers, delaying any payouts for claims that are being processed when the change takes place. When you choose a company with a high A.M. Best rating, you’re betting on their ability to pay out your claim on time, without major hassles.