If you have financial dependents, you should also have life insurance. Unfortunately, due to various concerns regarding cost, risk, hassle and time, there are still a number of Americans who are uninsured, but would like to have coverage if they only found the right policy with cheap rates from the best life insurance companies in the United States.
It’s easy to research different types of policies or compare free quotes online, but how do you know if a life insurance company is right for you?
With so many confusing aspects like terms, coverage amounts, types of policies, and more, it can quickly become overwhelming. The process of finding the best life insurance company does not have to be time-consuming, stressful, or expensive. Let us break it all down for you.
Life Insurance Company Ratings
The insurance industry is rated in several ways, from customer satisfaction to financial strength to policy offerings.
Many of us are familiar with JD Power’s customer satisfaction surveys, where insurance companies are ranked based on the different types of services they offer and the customer service experiences consumers have had with them. Customer satisfaction rankings can help you learn a lot about how a life insurance company treats its policyholders.
Checking the financial ratings of the life insurance companies you are considering can also be a great way to evaluate their long-term integrity. The purpose of life insurance is to provide financial stability in your own life, so reviewing the financial strength of providers can help you to discover which ones are legitimate and honor their policies.
Top Rated Life Insurance Companies
While other sites may only provide you with the top 10, below, you will find our list of the top 20 life insurance companies by ratings. These company ratings are based on policy offerings, cost of coverage, customer service, financial strength, and an overall rating that combines all these factors. Reviews and ratings are scored on a scale of 1 to 5, with 1 being the lowest and 5 being the highest.
|Mutual of Omaha|
|New York Life|
How To Find The Best Life Insurance Companies
For many Americans, the biggest factor when choosing the best life insurance company is price. Although premium rates between companies vary, the most common factors used to underwrite a policy – age, health, medical history, and lifestyle – are the same. Though do not allow health issues, such as diabetes, hinder you from seeking a great life insurance policy. However, a cheap quote is not the reason you should choose a company.
Choosing a life policy, whether it is term, whole, universal, or variable coverage, based on its premiums is a huge mistake. To find the top life insurance companies, the other factors you should consider include:
- the type of policy you are buying,
- the attached riders and policy benefits,
- the company’s financial stability,
- customer service and support,
- the claims process, and
- the company’s reputation.
Among these, pay close attention to customer support, claims processing, and reputation for timely pay outs. The last thing you want is a term or whole life insurance company that refuses to pay benefits or tries to find reasons to avoid paying.
Type of Policy and Benefits
Some providers specialize in certain types of coverage. If your risk profile doesn’t fit the company’s business model, the carrier will quote you higher rates to keep you from buying a policy from them. In cases like this, don’t be discouraged – get free online quotes and comparison shop.
Additionally, always compare apples to apples – meaning, you should compare similar policies and keep in mind that term and permanent life insurance have different features, costs, pros and cons.
A life insurance company’s customer service and support is essential to ensuring you understand your coverage options, death benefit, premiums, and the claims process. Also, buying a policy from a courteous, responsive carrier is extremely important if you ever need to file a claim.
Claims Processing, History
Another way to find out if an insurance company is right for you is to take a look at their claim history, which will show you the percentage of claims they pay and how many they contest or deny. This can help you to determine if the company pays benefits fairly for legitimate claims, and whether or not their customer service is good. It is critical that your life insurance company immediately process and payout your claim.
A death in the family is a traumatic and unsettling event for everyone involved. During the stressful time after a loss, the last thing you need to deal with is a stubborn insurance provider who denies your claim or delays paying it out.
Reputation and Honesty
Discovering whether or not the insurance company has received many customer complaints can be a major factor in helping you decide whether or not to purchase coverage from them. The Better Business Bureau, an Internet-accessible service that helps keep track of businesses both good and bad, can show you if the company has proved to be honest. Furthermore, you can try your state’s Insurance Department to check for complaints, and read online reviews on the companies whose life insurance quotes you are comparing.
Before we get into the specifics of the best life insurance companies, let’s discuss the basics of life insurance. It’s important to understand the policy you’re buying to make sure you’re getting the best plan for you and your family.
There are several types of policies that you need to understand the differences between, term policies and whole life policies. These types are exactly what they sound like.
A term life insurance policy is only effective for a certain length of time or “term”. These policies come in different term lengths, but normally 10, 15, or 30 years. Once the term is over, the policy is no longer active, and you won’t receive any money from it. Think of the term as an expiration date on a carton of milk.
At the other end of the life insurance spectrum is whole life policies or permanent life insurance. As you can guess by the name, whole life policies will provide coverage for your whole life. As long as you pay the premiums, you have coverage from the life insurance policy. These plans build cash value as you pay monthly premiums, which means that whole life plans tend to be more expensive than term policies.
How much life insurance do you need?
One of the most popular questions when someone is shopping for a life insurance policy, is “how big of a policy do I need?”, the answer depends on several different factors.
How many people are dependent on your salary? Is it just you and your spouse? Do you have one kid or four? Is this for business, like a buy/sell agreement or other key man type? The number of people that rely on your salary to get by is going to change the size of your life insurance policy.
Another factor is how much debt you have. If you have a mortgage, student loans, car payments, kids that are going to college, etc. you want to make sure that your life insurance plan could cover those expenses if something tragic were to happen to you.
There is no “perfect number” how much you should buy in your life insurance policy, but a lot of financial experts suggest getting ten times your annual salary. In most cases, this will give your family enough money to pay off any funeral costs, any unpaid expenses, and have enough money to get through this difficult time in their lives.
Getting a Life Insurance Policy – The Process
Because shopping for a life insurance policy isn’t a very common item, most people have no idea what they will need or have to do to get approved for their plan. After you decide which company you’re going to buy your policy through (which we will get to later in this article), then comes the paperwork.
You’ll have to answer basic questions about your height, weight, financial information, and banking information. Aside from the basic information, you’ll also have to answer questions about your lifestyle like how much you exercise, if you use tobacco, and how often you drink.
After the initial paperwork, the insurance company will schedule your medical exam to determine what kind of health you are in. The results from this exam will play a huge role in determining how much you’ll pay in monthly premiums. The exam will be completed by a nurse or paramedic and will consist of things like taking your blood pressure, heart rate, a blood sample, urine sample, and asking questions about your family history.
If you want to get lower monthly premiums on your policy, it’s important to focus on your health. Things like being overweight, smoking, or excessive drinking can cause your rates to go through the roof. Before you start the applications process, lose any extra weight, kick the cigarettes, and slow down on the alcohol, your bank account will thank you.
Read The Policy Carefully
Finally, always read the fine-print, so you are 100% certain about the terms and conditions of your policy as well as any riders you are adding. Failing to do so can be disastrous. Learn about your carrier’s exclusions, restrictions or limitations on benefits.
For example, some life insurance policies do not cover deaths by suicide, criminal acts, or deaths that occur within the “exclusionary period”. The exclusionary period is a pre-determined time period, usually two years, after buying your policy, during which your beneficiaries will receive a refund of your premiums instead of a death benefit payout.
Other insurance companies will work with you to add a specific type of coverage to an existing policy, but your rates may increase. By familiarizing yourself with the details, you can avoid discovering any nasty surprises when making a claim, trying to change your death benefit, or making any other adjustments to your coverage.
If you have been turned down for life insurance before because of a health condition, don’t think that you can’t receive a good policy at a reasonable price. A lot of people have been denied coverage because diabetes, heart conditions, and other chronic conditions.
One alternative for someone that has a health complication that can prevent him or her from getting a traditional policy is to go with a no exam life insurance policy. These policies offer life insurance without having to undergo a medical exam.
These policies are very convenient for applicants that would receive poor rates because of their health, but not taking the medical exam comes at a cost. These plans are going to be more expensive every month than a traditional policy, but having a more expensive life insurance plan is better than nothing.
Top Life Insurance Companies
The insurance industry is extremely competitive, and life insurance companies are always offering cheap quotes and good customer service to lure you away from other carriers. Because of this and the long-term nature of life insurance, it is important that you review and compare multiple companies before deciding which provider you ultimately want to give your business to. Be aggressive – get free quotes, compare policies, ask for discounts, and negotiate, but don’t be afraid to pay up when you find the best life insurance for your financial needs. Remember, don’t just look at price – look for value!