Choosing from the best life insurance companies is like walking into a grocery store with a significant sweet tooth. Where do you even begin?
The candy aisle? The checkout lane with the grab it and go choices? Or do you take a walk down the baking aisle and consider a cake, brownies or specialty cookies? You know, a box of ice cream bars or a big bucket of Neapolitan may go great with any of the aforementioned items…
Let’s say you decide ice cream does, in fact, sound like the winner. So you make a bee line to the frozen section sure you know exactly what you want. Yet, when you arrive at the aisle, there are six different doors, all with huge selections of brands, flavors, and different options to choose from. Overwhelmed again?
This can sometimes be how it feels to buy life insurance. At first, you can’t decide what type you need, and once you do make a decision, you have to go find the best company to satisfy your needs and wants. We’re going to attempt to help you make this decision, or at least make it simpler, so you only find yourself working with the top life insurance companies.
Finding The Best Life Insurance Companies
If you’re like many people we’ve worked with before, you don’t even know how many choices you really have when it comes to picking the best life insurance companies. There are more than 800 life insurance companies throughout the United States, all of which are different sizes, structures, and business models.
Just because you have your car, your homeowner’s, or your business insurance with a single company, does not mean it’s the best place to also buy your life insurance policy. In fact, you’re probably significantly better off not doing so, because you’ll have a much wider selection of companies all bidding for your business, with a larger selection of policy types as well. Don’t get tricked into thinking you can lower your rates by ‘bundling’ your policies, because it’s bogus.
To put this into perspective, you wouldn’t expect to buy every piece of clothing you have from the same retailer, right? I can’t imagine a scenario where someone would try to purchase all their clothes at the same store just to not have to go look somewhere else for a better deal, a better fit, or a better style.
Buying your life insurance privately will almost always yield you better premium payments, so long as you find a good life insurance company for your own situation. The best life insurance rates don’t always come from the same carriers.
The best insurance companies for life insurance are those who give you the exact policy you need, for the best price you can get, with the stability and financial foundation we all expect of a multi-million or multi-billion dollar institution. If you aren’t confident the company you do business with is going to be here in 5, 10, or 20 years, how can you be confident in a product which needs to last just as long?
There are several characteristics you need to focus on when narrowing down your top life insurance companies to choose from:
- Financial Strength
- Type of Company
- Type of Agent
- Level of Service
- Risk Tolerance
There are more than this, but focusing on these will help you get down to 8 or 10 which are most appropriate for you; remember, just because you haven’t yet heard of a life insurance company doesn’t mean they are not great. While some companies might have what you need, it might not be the best solution because of the health rating you’ll get, the level of service you require, or simply, price.
This one is paramount, and should be included in all insurance reviews. Choosing a company that will be outlasted by its own product is not one you want to deal with. While it would be nearly impossible to sit down and rummage through the financial documents of all the possible companies, it is possible to get a good idea of where they stand financially by reviewing their financial ratings through independent rating agencies. The most reputable life insurance companies are rated by independent agencies, by request.
A.M. Best, Fitch, Moody’s and Standard & Poor’s are the major credit rating agencies, with A.M. Best one of the go to for the life insurance industry. While these ratings aren’t a perfect measure, they tend to be close. Look for a company with nothing lower than an “A-” from A.M. Best, and we recommend not going any further down. This isn’t to say it means another company isn’t a great fit, but we’re looking long term. You need your company to be solvent to pay a claim as quickly as possible.
Other financial signs to think about are company surplus, company assets and in-force policies, and total liabilities. Most life insurance companies will publish this kind of information on their website to promote transparency and to be compliant where necessary, but someone like A.M. Best can furnish these as well.
For quick reference, here is a list of the best life insurance companies and their current financial ratings:
|American Income Life||A+||A+||AA-|
|Mutual of Omaha||A+||A1||A+|
|National Life Group||A||A2||A|
|New York Life||A++||AAA||Aaa||AA+|
|Royal Neighbors of America||A-|
|United Home Life||A-|
Type of Company
There is more than one type of life insurance company, and it’s the internal structure and operating personnel which make them different. One type of company is called a mutual life insurance company, and the other is a stock held life insurance company.
A mutual company is one who is owned entirely by those who do business with the company. The only way to own a piece of the company is to own their product, and they answer directly to their customers. Typically, dividends, or excess gains and funds acquired throughout the year, are distributed back to consumers. These dividends are never guaranteed, but some companies have been paying for over 160 years in a row. The type of agent you’ll deal with is more likely to be an in-house, or captive, agent, so you may need to find a local agent or call the company directly to make a purchase.
A stock held company is one who has gone public, and it’s not owned by its policy owners. They are traded on a stock exchange, like the New York Stock Exchange (NYSE) available for anyone to become a part owner. In other words, profits go back towards those who own stocks first, not those who own a life insurance policy, like a dividend paying company might.
Type of Agent
As briefly alluded to above, there are also two types of agents: captive life insurance agents and independent life insurance agents. By choosing a certain type of agent you prefer, it could limit what life insurance companies you have access to because of what affiliations (called appointments) your agent has.
Captive agents are those who are employed directly by the company for whom they offer insurance. They typically do not sell for any other life insurance companies, although certain types of contracts now allow it. However, first and foremost, they must continue to sell their company’s insurance in order to keep their active status. These will also be local agents more often than not, operating in small towns to big cities all across America.
Independent agents are those who are not employed directly with any one life insurance company, but rather as many of the life insurance companies as they need. If you’ve heard of the coined term broker in regards to life insurance agents, they are one in the same. By offering many companies at once, they are able to ‘shop your rate’ quickly and efficiently, and knowledgeable independent agents are well versed with different products and their underwriting guidelines. If you want access to a mutual life insurance company’s policy, however, they may not be able to assist you.
Level of Service
As with any industry, the level of customer service you receive from a company can vary widely. This will be the hardest component of a carriers reputation to judge. You can first ask around from people you know for a reference to a company or agent who they were exceptionally satisfied with. You can also read reviews online, dial a few companies to see how quickly you can get access to someone, or even reach out to several agents to see who is most responsive and helpful.
The fact of the matter is, you won’t need to talk to your life insurance agent all that much, in the long run. Communication is very important in the beginning as you’ll both need to come to terms on what your goals are, your budget is, and what product and insurance company are the best fit. But, other than that, you will likely only speak with your agent at annual reviews, product changes like conversions or adding new riders, and when maintenance is required for contact information or beneficiaries. An exceptional agent is one who is proactive, not reactive, in these matters.
For most consumers this is going to be one of the larger determinations in where they’ll place their business. A life insurance policy is no more than a promise on a piece of paper, so it’s not uncommon to think they’re all the same and the lowest cost policy is the right one.
But, there is some truth to it. All the top life insurance companies in the United States are essentially selling the exact same thing, with minor differences. Should you need a very basic policy without any bells and whistles, your price sensitivity has merit. If you need something like estate planning completed, stop and think twice because the quality of company will really make a difference based on what you need to accomplish.
Consider asking your estate lawyer for a referral, but don’t skip on researching your own reviews for life insurance companies, too. At the end of the day, you’re the one purchasing the life insurance policy, not the lawyer.
If you really have a low risk tolerance, you’re probably more likely to go with a brand you already know rather than the company you’ve never heard of, and that’s perfectly fine. There are a handful of insurers who have been around for a very long time who have very household names. There’s no reason not to do business with them. The trade off may be a higher price, but many consumers are okay paying for a little extra peace of mind.
If a big brand name doesn’t matter to you and you want the simplest coverage at the most affordable rate, then you probably have a higher risk tolerance. You can forego the discussions of financials and company types and simply seek out what policy solves your needs with the right price.
Our Top 10 Life Insurance Companies for 2016
Based on our experiences, financial ratings, reviews from customers and consumers, and overall product availability, below is our top 10 selection of life insurance companies in America this year:
- Northwestern Mutual
- New York Life
- Massachusetts Mutual
Please refer to our list of no exam life insurance companies if you prefer to skip the medical.
Please refer to our list of burial life insurance companies if you require final expense.
Please refer to our complete list of life insurance companies to see all reviews.
Unquestionably, Northwestern Mutual is our top rated life insurance company for 2016.
Northwestern has been around for over a century, providing some of the most competitive permanent life insurance products in the entire industry. Backed up by perfect ratings from all four major credit rating agencies, they’re one of just a handful of companies with a perfect Comdex score.
While consumers see higher prices for term life and limited availability of product (sold exclusively through company agents only), these two downfalls are masked by an institution with $220 billion in assets, a long standing history, a stout financial portfolio, and promising future.
You will have access to insurance products, like participating whole life insurance, to full-scale investments to suit every need in your household or business.
See our full Northwestern Mutual Life Insurance Company review.
Coming in a close second place on our list of top ten life insurance companies, New York Life is a near match to Northwestern Mutual.
Having been in business nearly 170 years, they are one of the longest standing life insurance companies in America. They, like Northwestern, have top of the charts scores from all four of the rating agencies who review financial institutions, putting them in elite company.
New York Life has a most excellent suite of exclusive products offered from their agents only, and expect to pay the price for the extra quality, brand, and benefits. They are also the underwriting institution behind the highly acclaimed AARP, one of the most recognized names for senior benefits.
Expect a superior product from this company who has offered dividends for over a century.
See our full New York Life Insurance Company review.
Massachusetts Mutual, our third place contender for the year, is yet another life insurance company in our top three to be owned by its policyholders, and not by investors.
One of the larger companies we reviewed coming in over $500 billion in total assets, Mass Mutual has perfect ratings from all major rating agencies, with the exception of Moody’s, putting them among the strongest, financially stable life insurance companies in America.
Another reason Massachusetts Mutual is ranked so high this year is its focus not only only insurance, but financial planning. Many carriers have chosen to offer life insurance, but few have made such large strides as Mass in integrating insurance and investments together.
See our full Massachusetts Mutual Life Insurance Company review.
MetLife continues to be the largest provider of life insurance in the United States, but this was not enough to put them in the top 3 for the year 2016; simply being the largest life company is not enough.
The largest, most recognized name in life insurance, the Metropolitan Life Insurance Company brand is the giant of the industry. Since the civil war, MetLife has been offering life insurance to fit any budget, any business, or any need. Among these needs, other insurance products from dental to disability are available all under one roof.
Although it’s harder to get accepted with MetLife than many other companies, they offer a great lineup of products, including term, universal and whole. The ratings received by all four credit agencies are fantastic, and MetLife has secured “A” ratings across the board.
Metropolitan Life also has an affinity to working with those with specials needs, so consider this if it fits your criteria.
See our full MetLife (Metropolitan Life Insurance Company) review.
The go-to company for term life insurance in 2016, Banner has become one of the most aggressive insurers on pricing for the entire term market. They are hands down the best life insurance company for low prices on a term policy.
Although not a monster sized brand like many of its competitors, Banner is a long standing life insurance carrier who not only offers competitive premiums, but underwrites several very impaired risk categories most other life insurers shun.
$600 billion dollars of life insurance are currently in force with Banner Life, and they are housed in a financial conglomerate with nothing but “A” ratings from the agencies who rate them.
In addition to their term products, they offer very competitive universal life insurance options to fit the needs of the permanent insurance crowd. However, they don’t offer any true whole life products; they stick to what they know best.
See our full Banner Life Insurance Company review.
Just outside the top 5 of our list, Transamerica is a century old life insurance company with a great group of product choices to meet any need.
Nearly famous for it’s prominence in the skyline of San Francisco alone, Bank of America’s purchase of Occidental and it’s re-branding to Transamerica has given the company new life since its inception more than 110 years ago. Today, they host “A” ratings from all four rating agencies.
Transamerica Life offers an excellent variety of life insurance, including term, universal, whole and accident. Outside of their insurance arm, there are additional resources for investments, if you so choose, where Transamerica and their subsidiaries are competitive.
Transamerica is also international.
See our full Transamerica Life Insurance Company review.
Prudential is a household name, and their industry dominance and niche underwriting has gotten them into our top 10 best life insurance companies list this year.
Extremely successful in several smaller areas of life insurance, Prudential also has leveraged its brand to become a leader in the life insurance industry as a whole. This 140 year old financial institution is a premiere insurer, with ratings of “A” or better from all of the rating agencies. In competition with MetLife for most life insurance sold, Prudential did take home the highest in net premiums, topping $13 billion.
Although there is no whole life availability, Pru does have term, universal and indexed universal to fill their portfolio of products. Non-life insurance options include accident, critical illness, disability, and more.
Prudential has exceptional underwriting for smokers.
See our full Prudential Life Insurance Company review.
Most highly recognized for its investment side, few realize how well Fidelity has moved up within the life insurance industry.
Although it’s toward the bottom of our best life insurance companies list, it has a special place among the graded life insurance niche, earning its spot in the overall category for 2016. Fidelity is responsible for new advances in the marketplace, including it’s hybrid life insurance product line.
The company itself is aged and well known, and has more than $100 million of in force life insurance policies. There are also term products, whole life, and no exam policies available through Fidelity. As the company continues to embrace change, look for them to rise more towards the top in the coming years.
Fidelity has received an “A-” from A.M. Best, one of the top rating agencies.
See our full Fidelity Life Association review.
Another rising company for life insurance is Principal, coming in at number nine on our list of top 10 life insurance carriers we reviewed.
Although it is more highly rated than some of our other companies on the list, including four ratings of “A” or better, Principal does not quite have the footprint yet of a best in class carrier.
One of the prime reasons Principal Life Group made our list was not only their host of term, universal and variable universal life products, but their no exam life insurance underwriting which allows consumers to purchase up to $1,000,000 in coverage, regardless of which type of insurance they choose. This doubles the industry allowance on death benefit amounts.
Principal has more than just life insurance among its offerings, including financial investments through subsidiaries.
See our full Principal Life Insurance Company review.
Squeaking into our list of best life insurance companies at number ten is Protective, a company many haven’t heard of just yet. Despite this, they have a dominant foothold within more than one sector of the life insurance industry.
For more than a century now, Protective Life has lived up to its name in protecting households and businesses all across the United States. With more than 5 subsidiaries, an international presence, four separate “A” ratings, and a huge number of policyholders, Protective is getting noticed for the first time in a major way.
You will have your pick of term life insurance, universal, or variable universal, where Protective is extremely price competitive. Especially with its universal products, Protective is one of the few companies who offers permanent insurance for all tiers of fully underwritten life insurance.
If you are considering permanent coverage for estate planning, Protective may be among your considerations.
See our full Protective Life Insurance Company review.
Best Life Insurance Companies By Category
New this year is our individual selection of top carriers by category. As each consumer assesses their particular needs, the type of life insurance they require could be different from the next person. Because no single carrier has the best product among all categories, it seemed necessary for us to make the distinction for each area of life insurance.
To have won the honor of top carrier for any category, greater emphasis was put on product, price and additional benefits provided by the company itself which would enhance the overall experience in buying from them. Utility of a product, its riders, the convertibility (where appropriate), and its availability to several demographics was most heavily weighted.
Here are the current year’s selections:
Best Term Life Insurance Company
Without a doubt, the top term life insurance company this year is Banner Life Insurance Company, who exemplifies what consumers want in term insurance: simplicity, wide availability, and superior pricing. Banner has some of the most cost effective term insurance products on the market and includes excellent riders and convertibility for those looking to add a little oomph to their policy.
Best Universal Life Insurance Company
Our top universal life insurance company this year goes to Protective Life Insurance Company, who hosts the most comprehensive assortment of universal life at virtually unbeatable prices. With perhaps the most highly customizable universal product out, anyone seeking the cheapest possible solution for permanent coverage should look no further than Protective.
Best Whole Life Insurance Company
Also awarded our overall best life insurance company for the year, Northwestern Mutual takes the cake for any consumer looking to find top notch whole life insurance and survivorship life insurance. The greatest considerations taken into account were safety, security, guarantees and growth, as those are the pillars to any company looking to establish themselves as the best whole life insurance company. Among other things, a good selection of riders, credits from term conversion, and dividends make these products second to none.
Best No Exam Life Insurance Company
If there was any one category which had a front runner most separated from the pack, it’s our winner for the top no exam life insurance company this year, Sagicor. The evolution in accessible, no medical exam coverage is dominated by Sagicor, who sports top honors in virtually every aspect, including variety, types of coverage, and everyone’s favorite, price. In addition, their prowess includes some of the fastest issuing coverage in the industry.
Best Burial Life Insurance Company
The the final expense arena, the top burial life insurance company lies with Mutual of Omaha and their level, permanent coverage options. Though there were close contenders because of the necessity to compare all sub-types of burial (level, graded, guaranteed), Mutual of Omaha stood out with superior availability to wider demographics, simple and fast underwriting, and very comparable prices. Their products have plenty of long term guarantees, and the company behind the product is strong and stable.
Best Impaired Risk Life Insurance Company
Not everyone is perfectly healthy, and for those looking for affordable higher risk coverage, Prudential is easily the top impaired risk life insurance company, and has been for a while. The most aggressive, liberal underwriter for coverage in the industry, Pru, as their often referred to as, boasts uncharacteristically relaxed guidelines in the most progressive areas of life insurance. Where some carriers won’t even attempt to go, Prudential offers traditional coverage with little reserve.
All reviews are our own, based on our own criteria, knowledge, experience, customer reviews, and more, and are not endorsed by any company. Additional companies will be added, and the list may change at our discretion with full disclosure of such.
Updated March 14, 2016 – Rankings chart updated to reflect recent down grades of Genworth.