If you have financial dependents, you should also have life insurance, in most cases. 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. One of the biggest hurdles is picking the best life insurance companies in the United States.
There are, literally, hundreds of insurance companies. From giant, household brand names, to small and more local insurers. Some have one kind of product, while others have a different kind. Some are cheap, some are rather expensive. Some have internal agents only, others don’t. And, more importantly, some are financially secure, and others are less so.
Where are you supposed to start? We’re here to help.
After dealing with tens of life insurance companies, year after year, for all kinds of situations all across the country, we’ve attempted to narrow them all down to who we believe are the best 10 life insurance carriers for 2017. Of course, everyone’s situation varies, however these will apply to the greatest number of folk. Let’s dive in.
Our Picks For The Top 10 Best Life Insurance Companies This Year
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? Many of them all have the same kinds of products, whether it’s a basic term or permanent policy, but what makes one carriers product better than another?
Hint: it’s more than just price.
With so many confusing aspects like term lengths, coverage amounts, kinds of policies, and more, it can quickly become overwhelming. The process of finding the best life insurance company for you and your family does not have to be time-consuming, stressful, or expensive. Let us break it all down for you, step-by-step.
First, let’s talk about something really important: solvency and financial strength. You definitely don’t want to buy insurance from a company who is nearing default.
Life Insurance Company Ratings: How They Work
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 previously. Customer satisfaction rankings can help you learn a lot about how a life insurance company treats its policyholders.
But, 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. If a policy won’t be paying a benefit for up to 30 years, or more, don’t you want to attempt to be dealing with a company who has a very high chance of success?
Below is a sample chart of what ratings look like, offered by independent rating agencies.
The four major rating agencies for life insurance companies are A.M. Best, Fitch, Moody’s, and Standard & Poor’s. They each have their own rating scale, respectively.
Something to understand is a life insurer is not mandated to be evaluated by these agencies. The company has to elect to be reviewed and let these four independent rating companies to go through their books. Ratings are based on:
- Risk within investment portfolios
- Asset to debt ratios
- Cash reserves
- and more…
Once a company receives its grade, it’s also available for everyone else to see, too. Typically, we would only ever work with an “A” rated (or better) company. A life insurance company with a “B” rating (or worse), despite it sounding strong, is a concern.
Companies who have multiple “A” or better ratings are seen as safer bets than those with just one, but it’s not guaranteed. To help consumers evaluate the insurers with more than one, the scores are averaged out, in a way, to create what is called a Comdex score.
A Comdex score is simply a grade out of 100 to give you a quick snapshot of what percentile a company falls.
In addition to these, a company may also have a score with the Better Business Bureau, though this kind of grade is more for customer satisfaction.
A Quick Summary of the Top Rated Life Insurance Companies
While other sites may only provide you with the top 10, below, you will find our list of several more 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 Company For Your Family
For many Americans, the biggest factor when choosing the best life insurance company is price. We completely understand, too.
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 only reason you should choose a company.
Choosing a life policy, whether it is term, whole, universal, or variable coverage, based strictly 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 who refuses to pay benefits or tries to find reasons to avoid paying.
We find this to be extremely, extremely rare, but it has happened.
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, it’s just not the right one for you.
As an example, some companies focus more heavily on no medical life insurance for younger adults. If you’re a senior looking for a burial life insurance policy, you’re just an ideal client for them, and they aren’t an ideal carrier for you. No hard feelings.
The good news, however, is there are companies who focus much more intently on senior plans, so you’ll find a significantly better valued product there. This is one reason you want to work with an independent agency, like ours, because we have decades of experience in working with both types of companies and can point you in the right direction the first time around.
Additionally, always compare apples to apples – meaning, you should compare similar policies and keep in mind term and permanent life insurance have different features, costs, pros and cons.
Compare a 10 year term to a 10 year term, and compare a whole life to a whole life.
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.
Now, you’re likely going to work with an outside agent, not the company directly, because few companies have their own staffed agents. They utilize agents and broker across the country, because it’s more efficient for them to get in front of a larger audience. In fact, many carriers will only use this method.
On the other side of the coin, there are carriers who are the exact opposite, and only let internal agents place a life insurance policy for them.
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 your life insurance company immediately process and payout your claim.
A typical turnaround time from submitting a claim to receiving access to the benefit is 7-10 days. While many consumers think a company would rather take as much time as possible, it’s not the case. A company is required to start paying interest on the money right away, so it’s in their best interest to get it to the beneficiary as soon as possible.
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, as alluded to above, is an internet-accessible service who helps keep track of businesses both good and bad, can show you if the company has proved to be honest. Most companies will have a profile at the BBB website, so you can review what types of complaints they’ve had, how many and over what time period, as well as to how well they fixed any issues with the client.
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.
The Basics Of Life Insurance: Keep Your Focus
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.
Understanding what type of policy you are looking for will immediately weed out lots of carriers when you’re first reviewing who is best for you. Let your agent know what you need, and they can help you seek out the perfect fit.
How much life insurance do you (really) 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 who 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 who are going to college, etc. you want to make sure your life insurance plan could cover those expenses if something tragic were to happen to you.
Finally, do you have future things you’d like to pay for, or leave a legacy for? If so, life insurance is a much cheaper way to leave behind a big benefit for pennies on the dollar.
There is no “perfect number” of how much you should buy, 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.
If you are buying for the purpose of an estate, you’ll have entirely different measures to consider.
The Process of Buying A Policy
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, then comes the paperwork. Nowadays, most applications aren’t technically “paperwork” because your agent can complete it over the telephone and get signatures with an electronic signature via email, but a few companies still require a fully completed paper application.
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.
Your criminal record, driving record, and family history of major health issues are all considered, where applicable. A simple speeding ticket won’t hurt you, but if you have parents who have died before the age of 60 due to cancer, this could raise your rates.
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 third party 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. They will confirm specific questions, review your driver’s license to confirm you are who you say you are, and be about their way. The exam takes about 20 minutes.
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. Anything which could potentially cause long term health risks or potentially lower your overall life expectancy is what increases your costs of insurance.
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, all life insurance policies do not cover deaths by suicide, criminal acts, or deaths which 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. This prevents high risk factors of premeditated fraud using a life insurance policy.
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.
One thing to note, is virtually every policy will have what is called a Free Look Period. For new policies, it is usually 10 days, but if you’re replacing a policy, it can be up to 30 days. During this period, if you change your mind, you can return the policy, and get your initial premiums back.
Health Issues? No Problem.
If you have been turned down for life insurance before because of a health condition, don’t think 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. But even those who have been denied, may have simply chosen the wrong carrier.
One alternative for someone who has a health complication which can prevent him or her from getting a traditional policy is to go with a simplified issue life insurance policy. These policies offer life insurance without having to undergo a medical exam.
These policies are very convenient for applicants who 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.
In addition, a graded or guaranteed type of policy will payout less (or none) in the first few years. Once the two or three year period is past, then they pay out the full benefit.
Our Top 10 Picks for 2017: These Are The Best Life Insurance Companies This Year!
Considering all the information above, and a ton of data we’ve compiled over the years, here are our top 10 best life insurance companies for the average consumer through the United States:
- Banner Life Insurance Company
- Prudential Life Insurance Company
- Northwestern Mutual Life Insurance Company
- Sagicor Life Insurance Company
- Protective Life Insurance Company
- American General Life Insurance Company
- State Farm Life Insurance Company
- Principal Life Insurance Company
- Metropolitan Life Insurance Company (Brighthouse Financial)
- Mutual of Omaha Life Insurance Company
In taking a look at all the possible factors, these companies stand out among the crowd with superior service, superior products, and the financial security required to be named the best of the best. Now let’s talk about why each one, specifically, was such a strong candidate.
Banner Life Insurance Company
Because the vast majority of American need a term policy, it was a pretty tight match to find the elite of the elite. However, when the cards were all laid down, Banner Life simply had the best value term life insurance policy, with great underwriting and a strong financial status backing its product.
A Legal and General company, alongside William Penn Life Insurance Company of New York, Banner stands out among the crowd for several different reasons.
Banner is secure. Few companies have such a quality high score. They’ve received a 94 Comdex score because of three excellent ratings:
- A.M. Best: A+
- Fitch: AA-
- S&P: AA-
To match this, their SMARTTerm and OptTerm series plans are some of the best term life insurance products on the market. Depending on your situation, they have something to fit every budget, every health class, and every need, all with high value for what you pay.
Underwriting can be bypassed, though going through the medical can yield some of the most affordable policies on the market, lasting up to 30 years. If you have health concerns, Banner even utilizes a customized rating table, unique to their company, which can help make a policy much more affordable than anywhere else.
If you want a quality, cheap term policy to protect you and your family, check out Banner. You won’t be disappointed.
Prudential Life Insurance Company
Another top notch company you may want to review is Prudential Life Insurance Company, likely a much more household name than the aforementioned. While Pru doesn’t have the cheapest term policies, they are close. What sets them ahead of the pack is their liberal underwriting style, making life insurance much, much cheaper for a huge demographic of consumers who aren’t the Olympic athlete type.
Much like the others on this list, Prudential has excellent financial ratings, putting them in the top tier for solvency and safety. They include:
- A.M. Best: A+
- Fitch: AA-
- Moody’s: A1
- S&P: AA-
On top of a very favorable underwriting style for many Americans, Prudential is widely known has having a great depth of product types, helping small families, business owners, and even workers by having a strong workplace benefit plan to offer employers. Even outside of insurance are investments, annuities, and other ways for you to save for retirement and other big financial goals.
Pruco has been around for a long time, and their service is high quality. Don’t hesitate to buy your life insurance plan, or other investments, through Prudential.
Northwestern Mutual Life Insurance Company
Rounding out the top three, we’ve got one the best mutual life insurance companies, Northwestern Mutual. For those looking at the permanent product lines for basic whole life on up to complex estate plans, Northwestern Mutual is who you’re looking for. If their product wasn’t already among the best value, they do have the high financial ratings of any other company, period.
With the highest scores attainable by all four credit rating agencies, Northwestern has a perfect score:
- A.M. Best: A++
- Fitch: AAA
- Moody’s: Aaa
- S&P: AA+
In addition, to great products and a perfect report card, Northwestern offers the complete package for permanent products, backed by a company owned by policy holders, not share holders. This is a big deal because, for all those owning a participating plan, each year the company offers dividends means extra growth for you. And Northwestern Mutual has maintained this dividend (though it’s not guaranteed) for more than a century.
If your needs are lifelong, Northwestern better be on your short list.
Sagicor Life Insurance Company
Just outside the top three is Sagicor Life Insurance Company, a name you have perhaps not yet heard. However, they are widely considered as the pinnacle when it comes to no exam life insurance policies, one of the fastest growing market segments in all of life insurance across the country. As big data emerges, and consumers continually value convenience more than anything, Sagicor has taken the greatest leap in satisfying these consumers.
An “A” rated company by A.M. Best, Sagicor has actually been around since 1840, making it one of the older companies. You may not have heard the name, simply because they got their start in the Caribbean.
Whether you are in the market for a short duration term policy, or a long lasting universal life insurance policy, Sagicor can satisfy both those needs, all without the medical exam. Sagicor Life has been a huge mover and shaker in this arena for years now, and is only getting better.
Need approval in just days, not weeks? Let Sagicor take care of you.
Protective Life Insurance Company
Last in our top five, but first in class for universal coverage is Protective Life Insurance Company, one who is truly dedicated to what their name implies.
Having slipped ever so slightly, largely due to competitive term life premiums, Protective still manages to have one of the best solutions available for those in need of a specific universal contract. Protective has the ability to create fully customized plan, whether you need your insurance to last 10 years, or until you’re well beyond 100 years old.
And something you might want from your lifelong carrier are excellent financial ratings. Protective delivers.
- A.M. Best: A+
- Fitch: A+
- Moody’s: A2
- S&P: AA-
Underwriting will be a little more finicky with Protective, so we definitely suggest speaking to us before applying with them. For certain conditions, they are very competitive, but for others, they could improve. In any case, have confidence with Protective; they are a great company.
American General Life Insurance Company
Another insurer who has stood the test of time is American General, otherwise known as AIG. You’ve likely heard the name, and they made our top 10 list for several reasons. Expect high value products, where you’ll get good band-for-your-buck, a full suite of products, including Accidental insurance, and exceptionally good sweet spots for certain risks.
Top tier “A” ratings from all four rating agencies? Check:
- A.M. Best: A
- Fitch: A+
- Moody’s: A2
- S&P: A+
One of the larger life insurance companies in America, all things considered, they also take care of the larger folk especially well, allowing a slightly higher BMI applicant to receive a lower rating. This is an excellent carrier for someone who struggles with their weight, and you could see premiums reduced by as much as half when compared to similar companies.
There’s no reason to fret about a policy with AIG. You know you’ll be getting quality insurance from a quality insurer, every time.
State Farm Life Insurance Company
If it weren’t for high premiums, State Farm would be significantly higher on our list. The primary reasons we have State Farm Life Insurance Company so high, are simply based on brand name recognition, product selection, and convenience. Each of these speak for themselves, though high rates leave a lot left to be desired about this insurer. Underwriting is a little difficult, though healthy applicants will enjoy a simple process to buy.
They do have have excellent financial strength to go along with their household name, bringing in these ratings:
- A.M. Best: A++
- S&P: AA
Just last year, they received the highest score attainable from J.D. Power for consumer satisfaction, showcasing their customer service from the internal agents. It should be noted, these are the only agents you can purchase a State Farm policy from.
As a final thought, those who are in the high risk category for health or hazardous activities should look beyond State Farm to save on premiums.
Principal Life Insurance Company
A company jumping into our list this year is Principal Life Insurance Company, who has been making excellent strides in the life insurance industry of late.
Perhaps the strongest product Principal has right now, is its simplified policy with a benefit up to $1 million. This is more than double of the closest competitor, and it allows the insured to get covered very quickly, whether it be a term or permanent policy. All of this, without the medical exam? That’s an industry leading proposition.
Of course, with a name like Principal, you can expect strong financial numbers, too. Here’s what the credit rating agencies think:
- A.M. Best: A+
- Fitch: AA-
- Moody’s: A1
- S&P: A+
Principal doesn’t have the cheapest products, but for what you can get, the value is more than there. They work hand-in-hand with individuals, employers and employees, which many carriers do not. We enjoy the depth in their life insurance product lines, and beyond, too, where they have plenty of investment options for those who like to have their insurance and investments all in one place.
All in all, Principal is a no brainer if you need $1 million in coverage fast, and they excel in several other areas, too.
Metropolitan Life Insurance Company (Brighthouse Financial)
Everybody knows of Snoopy and his relationship with MetLife, though recently, Metropolitan Life Insurance Company has ceased to continue its insurance affairs with perhaps one of the most memorable names in the industry. Now under rebranding efforts and working with the name of Brighthouse Financial, there are still plenty of chances to score big and leave the big price tag behind.
Current ratings for Brighthouse Financial are:
- A.M. Best: A
- Fitch: A+
- Moody’s: A3
- S&P: A+
Individuals have a nice range of both term and permanent options, and the MetLife Advantages program offers a wide range of workplace benefits, including life, supplemental, and even accident insurance for those who need it. With a world class amount of insurance in force, a highly rated company, and extraordinary customer satisfaction, MetLife remains in our top 10 for this year.
For workplace benefits, more specifically life, MetLife is a well known leader, and you can be confident in your purchase for years to come.
Mutual of Omaha Life Insurance Company
Rounding out the top 10, we have Mutual of Omaha, who has a couple unique aspects about them none of the others on our list have.
For a vast majority of middle aged folks to senior citizens, a burial policy is all that is required. Mutual of Omaha has a superior product for this market, with an exceptional process. The rates are very comparable to the others in the market, and the benefits are as reliable as any. The fact they are a mutual life insurer adds a bit of bonus to those who make MoO their carrier, and the long term advantages of this are many.
They are no stranger to the scene, having been around more than a century, and they are still as strong as ever, boasting the following ratings:
- A.M. Best: A+
- Moody’s: A1
- S&P: AA-
In working with the pre-retiree and retiree market, they also have a nice selection of long term care, medicare supplements, critical illness and disability insurance, as well as investments, too. While we don’t weight this too highly, it definitely makes sense for this market, and gives Mutual of Omaha a clear edge for the senior market.
If you need a final expense policy, Mutual of Omaha has your back.
Well, there you have it. Our top 10 best life insurance companies for 2017, boasting the top term insurer, the elite of the specialty carriers, and the guys who give you the quickest coverage, for less. If you have any questions or input on how we ranked these companies, please do not hesitate to ask.
Get Started Today! Let us help.
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 you review and compare multiple companies before deciding which provider you ultimately want to give your business to.
We can help you accomplish this in an easy, non-invasive way.
Remember, don’t just look at price – look for value!