Insuring Your Future: 5 Best Life Insurance Companies

We have a series of articles about life insurance to guide you through the basics, but the question remains: Which life insurance company is the best? The answer depends on what you’re looking for—the type of life insurance, the amount you need, your family situation. No need to stress, though; we’ve got our top recommendations to get you started.

The deciding factors: How we picked our Top 5

• Financial strength: For each company, we looked at the financial strength scores from four independent ratings agencies (A.M. Best, Moody’s, Standard & Poor’s, and Fitch). Additionally, we used the overall Comdex score to more easily compare life insurance companies. The Comdex score is the average ranking a company receives from the four rating agencies, which is helpful because the four companies all use different letter/number systems.
• Customer service reviews: We based this score on the results from the J.D. Power customer satisfaction survey and online customer reviews. We also looked at the number of complaints reported to the National Association of Insurance Commissioners (NAIC) and the ratio of those complaints compared to the national median.
• Policy type and variety: We considered how many types of life insurance policies each company offers, as well as any distinguishing features that give customers more options.
• Price: We gathered quotes for monthly premiums to understand how each company compares in price. We received individual quotes for a nonsmoker 40-year-old male and female in good health. Each policy was for $250,000 for a 10-year term.

Life insurance 101

If you’re unfamiliar with how life insurance works or the terms used, check out our Life Insurance 101 articles or jump down to our list of terms and definitions:

• How Does Life Insurance Work?
• Why Should I Buy Life Insurance?
• Types of Life Insurance
• How Much Life Insurance Do I Need?
• Guaranteed Issue vs. Simplified Issue Life Insurance

Our Top 5 best life insurance companies

Mutual of Omaha edged out the competition to take the number-two spot on our list, mainly due to its great pricing for monthly premiums. While pricing will vary for each customer, we found Mutual of Omaha’s quotes to be consistently lower than any other company we reviewed. If price is your main concern, be sure to consider Mutual of Omaha.

Mutual of Omaha has a good mix of policy types. There are two types of term life policies with lengths of 10, 15, 20, or 30 years. Additionally, there are two types of whole and four types of universal life insurance options. Mutual of Omaha offers plenty of optional riders as well, including a living benefit option, whole life children’s insurance, and accidental death insurance.

While Mutual of Omaha’s policy options are not as extensive as State Farm’s, we found a couple standout features that solidified its spot on our list. One is that both term and whole life policies are available without a medical exam, which is not something we found with many companies.

Another benefit is the Fit Underwriting Credit program, which allows policyholders to earn extra “fit” credits through healthy living. With more credits, you can potentially be in a better rate class with lower premiums. Term life policies can also be converted to whole life policies up to age 75, which is the highest age we found that option offered.

Although Mutual of Omaha’s financial ratings and customer service reviews are not exceptional, especially compared to our other top choices, they were high enough to ensure Mutual of Omaha’s second place on our list and our recommendation as one of the top life insurance companies.

Northwestern Mutual earned the number-three spot on our list, largely because of its strong financial ratings and positive customer reviews. Northwestern Mutual is one of only two companies on our list that earned a perfect Comdex score of 100, reflecting a strong financial standing. Northwestern Mutual also received above-average customer satisfaction scores in the J.D. Power survey and was the second-highest ranked insurance company in 2016. Additionally, almost no complaints were reported to the NAIC in 2016, and positive customer reviews specifically mention how quickly benefits are processed and received. All of that reflects a commitment to their customers.

As far as policy types and features go, Northwestern Mutual has less variety than other companies, which is disappointing. However, it offers all three main types of life insurance. Customers can choose from two term life insurance policies with lengths of 10, 20, or 30 years, or up to a specific age. We didn’t find many companies that offered that kind of customization, and it helped solidify Northwestern Mutual’s position in our rankings.

Another feature we like is the flexible premium payment options for a whole life policy. You can choose to pay for the duration of your lifetime, for a set number of years, or with a single (large) payment. However, another drawback is that the company does not offer any policies without a medical exam, and the accelerated benefit options (in case of terminal illness) seem limited. However, if the company’s offerings fit your family’s needs, you can be sure Northwestern will deliver on its promises.

New York Life is on our list of top life insurance companies thanks to its exceptional financial ratings. New York Life is one of only two companies on our list to receive a perfect Comdex score of 100 with top financial ratings. In other words, this is a dependable company on solid financial ground.

Beyond that, New York Life does not stand out in other categories. It receives average customer satisfaction ratings, and the quoted price range was average as well. As far as policy options and variety, New York Life offers two term and three whole life policies but no universal life policies and no policies without a medical exam. The additional rider features are standard, but there are flexible premium payment options (annually, semiannually, quarterly, monthly), which we liked.

One feature that stands out to us is the term length options. They can be yearly or for 10 or 20 years. We like to see options that allow policyholders to customize their plans, so this is a point in New York Life’s favor. Overall, New York Life is a good company that offers customers the security of financial stability.

Banner Life Insurance is one of two companies that issue life insurance policies under the Legal & General America brand. Banner made it onto our list largely because of its low premium prices. While every situation will be different, we found that quotes from Banner were consistently competitive and some of the lowest we received. If price is your main concern, we definitely recommend checking out Banner.

Where Banner falls short in comparison to other companies is the variety of life insurance policy options. Banner offers only one term life policy and only one universal life insurance policy. No whole life policies and no nonmedical exam policies are available. However, the policies it does offer are good ones with several customization options.

The term life policy has lengths of 10, 15, 20, 25, or 30 years and can be converted to a whole life policy up to age 70, which is the second-highest age we encountered. For the universal life policy, customers have the option of paying their premiums for a set number of years or for the life of the policyholder. You can also add riders for specific term lengths to cover specific needs, such as a mortgage or a child’s schooling, but once the term is over, you don’t have to continue paying for something you no longer need.

Another of Banner’s strengths is its high ratings from financial companies with an overall Comdex score of 94. It also has a very low complaint ratio as reported to the NAIC, so it is a solid company and a great option if its offered policies meet your needs.

Additional life insurance companies of note

There are many life insurance companies out there, but in additional to our top five recommendations, we have five more that have something to offer and are worth considering in your endeavor to find the right life insurance policies for your family.

What we like

Nationwide’s standout feature is that it offers nine different universal life policies in addition to two term life and one whole life policy. If you are interested in using life insurance as an investment, Nationwide has a policy for you.

What kept it off our list

Nationwide almost made it onto our top five list, but the lack of standout features held it back. Nationwide has good financial ratings, above average customer service ratings, and a fairly low number of complaints, but nothing to distinguish it from the competition.

What we like

Transamerica has a good variety of policies with two term (including a nonmedical exam option), five whole, and three universal life policies. It also has competitive prices and several optional riders with more features than many competing companies.

What kept it off our list

Recently, Transamerica has had a less-than-impressive customer service record. Below-average ratings from the J.D. Power survey and a higher complaint ratio with the NAIC indicate problems with customer relations. Additionally, Transamerica has a C rating from the Better Business Bureau (as of this writing) based on its failure to respond to complaints.

What we like

Although Prudential doesn’t offer any whole life policies, it does have a wide variety of term and universal life policies—six of each. The term policies have lengths of 10, 15, 20, and 30 years, or they can be renewed yearly. Prudential also offers a long list of optional riders and additional features. It is one of the largest insurance companies in the world, so you’d likely find a policy that fits your needs.

What kept it off our list

Like Transamerica, Prudential has a recent track record of only average (at best) customer service. More complaints were reported to the NAIC about Prudential than almost any other company we researched. Negative reviews consistently mention difficulty in obtaining benefits and poor customer service.

What we like

AIG (American Insurance Group) is a huge insurance company with a solid list of life insurance options, including a whole life policy option without a medical exam. The company’s best feature is its low prices for monthly premiums. AIG consistently has some of the lowest prices, so if you’re on a tight budget, this might be a good company to consider.

What kept it off our list

Unfortunately, other than the pricing, AIG did not score well in our rankings. Its Comdex score is quite low compared to the other companies. It has very few standout features in terms of policy options, and customer service reviews are rarely positive. AIG received the highest number of complaints as reported to the NAIC, and AIG has had government action taken against it in the last few years.

What we like

Haven Life is a relatively new life insurance company, but it is backed by MassMutual, a large insurance company of excellent financial standing. What sets Haven apart is that it only offers term life policies without a medical exam for adults ages 18 to 64. However, Haven’s rates are not only comparable to fully underwritten term policies from other companies, but potentially even lower. Everything is done online and you’ll receive a decision quickly. If you need a nonmedical exam policy, this could be the company for you.

What kept it off our list

Because Haven focuses solely on policies that don’t require a medical exam, it offers only one policy type, so it is not for anyone looking for a cash return or even a whole life policy. Also, because Haven Life is so young, there are few customer service reviews available, so it’s unclear how it stacks up against the competition.

Insurance caveats: What to consider when buying

As with any contract, always check the fine print of a policy or rider that you add on. Look for renewal and conversion options for term life policies and find out if and when your premiums will go up. Check what isn’t covered (suicide, extreme sports, military service) or what exceptions will change the amount that is paid out (for example, accidental vs. natural death). Overall, read your policy carefully to make sure there aren’t any unfortunate surprises later on.

Ensure (and insure) your well-being

Although no one hopes to use a life insurance payout, having a policy is essential to protecting your family or business. Consider what you need and then take time to shop around for the best rate and features. Use our top recommended companies as a starting point and don’t give up—the comfort that comes from knowing you are covered is worth it.

Insurance terms

Here’s a quick list of some basic insurance terms used in this article:

• Term life insurance: A life insurance policy that lasts for a specific length of time, usually between 10 and 30 years. There is no cash value.
• Whole life insurance: A life insurance policy that lasts for the duration of your lifetime and builds a cash value.
• Universal life insurance: A life insurance policy that lasts for the duration of your life and builds cash value with lots of options on how to do that.
• Premium: The payments made to keep the life insurance policy current—usually made monthly.
• Conversion option: Many term life policies have the option of converting it to a whole life policy, so it will continue beyond the initial term at a higher fixed amount.
• Rider: Most companies offer optional riders, which add additional benefits to your current policy, usually at an additional cost.
• Nonmedical exam: Generally, life insurance policies require a medical exam to determine the customer health level, but some policies are available (usually at much higher prices) without a medical exam.