Best life insurance companies 2020
Haven Life
Northwestern Mutual
Banner Life
State Farm
Nationwide
MassMutual
New York Life
Protective
Guardian Life
Mutual of Omaha
Amica Life
Lincoln Financial
Prudential
Principal
John Hancock
Transamerica
best life insurance companies Life insurance is essential if you have someone in your life who depends on your income. Unfortunately, many people do not have the right type of coverage or the right amount. According to the Life Insurance Marketing and Research Association, nearly half of all American households have low life insurance. A separate study conducted by employee benefits provider Unum found that approximately one third of all families would be financially stressed within the first month of losing the breadwinner.
The good news is that life insurance does not cost as much as you might think. Some also estimate that the cost of life insurance is five times as high as it actually is, reports the Insurance Information Institute (III).
We make the process of shopping for life insurance as easy as possible by researching for you and rating the top life insurance companies. To build our ratings, we evaluated dozens of companies, including elements such as financial strength, customer service, and cost. Read further which companies made our Best Life Insurance Companies of 2020.
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More Life Insurance Guides
Cheapest life insurance companies of 2020
How does life insurance work?
How to buy life insurance
What is Term Life Insurance?
What is whole life insurance?
What is universal life insurance?
What is an exam life insurance?
How to choose the best life insurance company
Buying a life insurance policy is similar to buying a home, in which you are paying for something that will be a part of your life for many years to come. Just like you inspect a house before buying it, similarly you should evaluate an insurance company before purchasing the policy. Follow these suggestions to ensure that the life insurance company you think is a sound business that will thrive for decades in the future.
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Financial Strength: Get a financial strength rating from at least five independent agencies: AM Best, Fitch Ratings, Croll Bond Rating Agency, Moody’s and Standard & Poor’s. This rating is based on the evaluation of the financial health of the life insurance company. We are able to share a portion of the ratings of our best life insurance companies. The best financial power rating, and every company on our list has AM. Best Rating of Superior.
Customer Service: Working with your life insurance company should not be a hassle. The best companies have easy-to-use websites, short hold bars when you call, and agents who advise you based on your needs and not their commissions. Some light can be shed by reading professional and consumer reviews when it comes to customer service of a life insurance company.
Policy Type: Not all life insurance companies offer every type of policy. Instead of choosing the wrong type of policy because you like the company, start with a company that makes the kind of sales that sell best according to your needs. We break down the distinction between types of life insurance and give a brief definition of other terms in our section about types of life insurance policies.
Policy Options and Add-ons: Other important considerations when purchasing a policy include the amount of premium, the option of arranging premium payment, selection for term period (for term life policy) and rate of return on cash value (for) A universal or whole life policy). Start with the right foot after getting a firm understanding of what each of these words mean. See our types of life insurance policies section for more information.
Company Size: All else being equal, companies with the most assets are most likely to be solvent, and therefore less likely to run into financial trouble and possibly leave you or your loved ones holding a worthless policy. Also, if you need a jumbo policy with a higher payout, a larger insurance company will probably be more willing to refund it. Potential benefits of using a small life insurance company include more personalized customer service and a more congenial environment.
See how we found the best life insurance companies by reading our methodology.
1. Heaven Life: Top rated life insurance company Heaven Life in our ratings. This insurance company only offers life insurance policies and uses an online application process without personal interaction with a traditional agent. While a relatively new player in the insurance business, it is supported by well-established masmutuals. Heaven Life aims to offer affordable, easy-to-term life insurance policies online, without the usual hassles of insurance shopping. Read more “
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2. Northwestern Mutual: Northwestern Mutual has over 160 years of experience in the financial services industry and offers a traditional approach to life insurance. Northwestern Mutual offers a variety of coverage options and less-technical but personalized method of determining coverage needs, and its financial advisors are available to help customers through the process. Read more “
3. Banner Life: Owned by Legal and General America, Banner Life offers three basic life insurance products – Term, Whole Life and Universal Life – with relatively few options for customization. The product offerings are straightforward, which can appeal to those who want to keep the process of buying life insurance as simple as possible. Read More »
Apart from rating the best life insurance companies, we have term life, full life and universal life coverage.
Types of life insurance policies
The reason for life insurance seems very complicated as it is due to all the jargon. After learning some unique words and phrases of the subject, take out the sting for life insurance shopping. Do we go more deeply on these in our life insurance work? And how to buy a life insurance guide.
Permanent Life Insurance: A category of long-term coverage that includes whole life and universal life policy types. These are more expensive than term but offer more benefits. This category is sometimes called cash value life insurance because a savings cash value account is created in the policy.
Whole Life Insurance: A type of permanent policy that has a constant premium and guarantees the accumulation of cash value. This policy type may qualify for a mutual company dividend and is usually expensive. For more information, see our complete life insurance guide.
Universal Life Insurance: A type of permanent coverage that creates cash value. This is often offered with flexible premiums, although those premiums affect the cash price and death benefit. Find out more in our Universal Life Insurance Guide.
Indexed Universal Life Insurance: A universal life policy that accumulates cash value based on performance of specific market indices such as the S&P 500. This type of policy is generally less expensive and less risky than a variable policy because there is no real investment in an index.
Variable life insurance: A type of permanent policy that has a cash value for many investment options. These options can be based on whole life or universal life coverage.
Life insurance term: A life insurance policy that covers a policyholder for a predetermined period of time, usually ranging from five to 30 years. When the term expires, the policy has no benefit. Although there is no cash value deposit, premiums for life insurance policies are usually much lower than premiums for permanent life policies. Learn more in our term life insurance guide.
No-Exam Life Insurance: A life insurance policy that does not require a medical examination, thus expediting the approval process. We explain this particular policy in our guide in Life Insurance with No Examination.
Death Benefit: The life insurance company pays your beneficiaries after your death. This is often a tax-free payment that can be paid outright or in installments depending on your policy. When you apply for a policy, you usually select the amount of the death benefit, also known as your coverage level, although some policies allow you to change this amount later.
Cash Value: A portion of your premium that the life insurance company sets aside in a separate account after paying administrative fees and other expenses. In general, this money is tax-deferred based on a fixed rate, a market index or other investments. Only permanent life policies have a cash value component.
TOP 10 BEST LIFE INSURANCE COMPANIES IN THE U.S.
How much life insurance do I need?
Determining the right amount of life insurance coverage is necessary to determine how much money your payers require for the premium payments you can pay. Here are the questions you should ask yourself:
Who currently depends on your income? Apart from your spouse and children, does this list include aging parents or a business partner?
How long will your family depend on your income? The answer to this question often determines whether a term or permanent policy is best for you. Keep in mind that in general, children become self-sufficient after college, and a spouse may not need supplemental income once they start using the funds in retirement accounts.
What major expenses do you want to pay with life insurance income? Common expenses include paying the mortgage on the family home, sending the child to college or helping the child get married.
What other loan do you want to cover? Some debts held in your name may disappear after your death, but you may want to pay back debts held jointly with your spouse or property taxes that may be owed to your heirs.
What are the last costs of life you want to pay? This may include funeral expenses or medical bills for extended illness.
What assets do you currently have? Cash accounts, real estate, investment accounts, other life insurance policies and retirement accounts are all assets that can help support your beneficiaries. You may want to raise or lower your coverage level after estimating your net worth.
How do we walk you through the steps of assessing the right level of coverage in your life insurance work? guide. If you are crunchy for the time being, a quick way to estimate the amount of life insurance is to multiply your annual salary by a number between five and 10.
How to get the cheapest life insurance rate
One of the main factors affecting your life insurance premium is your age. There is not much you can do about this number, but there are other ways that you can save money.
Premium rates are not the same from one life insurance company to another, even for a similar type of policy. While some premium policies come with additional benefits, it is not a guarantee that paying more gives you better coverage. Compare the side-by-side policies to better understand the terms and perks of each.
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