A recent study showed that 36% of Americans intend to purchase life insurance in the coming year. With so many options to choose from, affordability is often a top consideration, as are ease of use and medical qualifications. Term life insurance is the go-to for affordable coverage when you want to protect your loved ones, especially if you’re on a budget or want to get insured without a medical exam.
We reviewed more than two dozen life insurance companies and identified the term life insurance policies that stood out from the rest, including ones that provide cash values, access to dividends, income for disability, fitness perks, and premium breaks if you become unemployed or have to file a home insurance claim. Here are our top picks:
Best Term Life Insurance Companies of 2021
- Best Overall: Northwestern Mutual
- Runner-Up, Best Overall: John Hancock
- Best Level Term: AIG
- Best Guaranteed Renewable Term: Transamerica
- Best Instant Issue Term: MassMutual
- Best Return of Premium With Cash Value: State Farm
- Best for Young Families: Mutual of Omaha
Best Overall: Northwestern Mutual
Northwestern Mutual was one of the highest-rated life insurance companies in our review. The company ranks fourth in overall customer satisfaction in the J.D. Power 2020 U.S. Life Insurance Study, down from first in 2019, and when we checked its history of customer complaints with the National Association of Insurance Commissioners (NAIC), Northwestern had very few for a company of its size.
Consistently one of the highest-rated life insurance companies
Pays dividends on many term life policies
Can convert term to whole life with guaranteed acceptance
Online information about policies is vague
Only agents can sell you a policy
Northwestern is a mutual insurer and, as such, it pays dividends to you on eligible policies, including term life options. This is unusual for mutual insurers, as dividends are usually paid only on whole life policies. These dividends, in combination with Northwestern Mutual’s outstanding reputation, financial stability, and comprehensive offering of term life products, are why we chose it best overall.
Northwestern Mutual’s term life insurance options include level premium, increasing premium, annual renewable premium, convertible policies, plus a unique whole life and term blended policy that allows you to mix both term and whole life coverage in one policy. The annual renewable plan is renewable up to advanced ages and premiums increase every year based on age.
Key highlights of the term life policies:
- Northwestern Mutual is the only company we found that offers the opportunity to earn dividends on eligible term policies.
- Optional level premiums, or annually increasing premiums
- Options available to covert term to a whole life policy with guaranteed acceptance
- A blended term and whole life policy that offers permanent coverage at term life pricing
The process for buying coverage from Northwestern Mutual varies based on your age and health. In some cases, you may qualify for simplified underwriting, while sometimes a medical exam is required. You must speak to an agent to purchase in either case.
Read the full review: Northwestern Mutual Life Insurance
Runner-Up, Best Overall: John Hancock
John Hancock has been in business since 1862, has an AM Best rating of A+ (Superior). It has a slightly above average complaint trend with the NAIC, but nothing too out of control. We chose John Hancock as the runner-up for best term life insurance because of value-adding riders like the Vitality program, living benefits and unemployment protection, and the company’s incentive plans to help you get or stay healthy.
Strong financial rating of A+
Can receive a simplified issue policy online
Offers a health incentive program to earn cash back
Term policies can’t be converted
John Hancock offers a full range of life insurance products, including simplified issue (meaning you only have to complete a medical questionnaire) and fully underwritten term policies (which involve a medical exam). Policies are available for 10, 15, or 20 years and many can be convertible into permanent policies. If you decide to convert your policy, John Hancock offers a wide selection of whole or universal life policies to choose from.
One big advantage of term life policies from John Hancock is a health incentive program that offers cash back, called Vitality. The Vitality program will provide you with a fitness tracker, and lets you earn points that can translate into cash back on your premiums, plus healthy living rewards like discounts on healthy food, or with other partners like Amazon.
Aside from the Vitality program rider, John Hancock also has critical illness or long-term care riders, and an unemployment protection waiver of premium rider, which will pay your premiums for up to 12 months if you become unemployed for more than four weeks.
John Hancock also offers life insurance for diabetics, and a Quit Smoking Incentive program (QSI) that charges the rate of a non-smoker for the first three years; this can provide significant premium savings and extra motivation to quit smoking.
Read the full review: John Hancock Life Insurance
Best Level Term: AIG
Founded in 1919, AIG is a global insurance company with a financial stability rating of A by AM Best. The company is the tenth-largest life insurer in the U.S. and offers a vast range of products in both term and permanent life insurance. We chose AIG as the best for level term because its Select-a-Term policy offers the most flexible range of level term life insurance policy options available today.
Strong AM Best rating of A+
Flexible term life policy options
Offers strong living benefits
Term policy conversion options are limited based on term length
Doesn’t offer quotes online
AIG offers many different term life policies starting at a 10-year term, then a 15-year going up in five-year increments, all the way to a 30-year. Additionally, AIG also offers term life policies with a 35-year term—one of the longest available among insurers. This feature makes it possible to truly customize how long you need the coverage, which can save you money in comparison to other companies. What’s more, with AIG, premiums remain level for the entire term and renew annually until age 95.
While AIG term life policies offer conversion options, the time frame to convert is limited based on the term length you select.
AIG offers another level term policy with living benefits called the Quality of Life (QOL) Flex Term policy, which offers a death benefit and also allows you to access the death benefit early in the event that you are diagnosed with a chronic, critical, or terminal illness.
AIG does not offer quotes online, so you’ll have to speak to an agent to get individual pricing. You can provide your information through the company’s website, and a representative will contact you with your projected premium.
Read the full review: AIG Life Insurance
Best Guaranteed Renewable Term: Transamerica
Transamerica was founded in 1904 and is a part of one of the world’s leading international financial organizations, Aegon N.V. Transamerica has a financial strength rating of A (Excellent) by AM Best. We chose Transamerica as the best for guaranteed renewable term insurance due to the options built into Transamerica’s term life plans, the living benefits it offers, and the overall competitive pricing of the company’s products.
Strong term life plan options, including living benefits
Offers a wide range of coverage amounts, up to $10 million
Can convert to a permanent policy down the line
Competitive pricing across all coverage options
Requires a medical exam in most cases
Need to speak to an agent to get a quote
Transamerica offers two different term life insurance options with coverage amounts from $25,000 up to $10 million. The policy offers level premiums from a 10-year to a 30-year term, depending on the plan you select. You can purchase a term policy from ages 18 to 80, and the rate is guaranteed during the length of your term. One particular standout from Transamerica is the Trendsetter Super Series, a convertible term policy, which means you can change this into a permanent policy later. Riders may also be available to cover your spouse and children on this plan.
The Trendsetter LB policy is another Transamerica term life policy that offers living benefits that allow an accelerated death benefit for chronic, critical, or terminal illness. This plan also offers a monthly disability income rider that will pay if you are disabled and unable to work.
Most policies from Transamerica require a medical exam, but this is ultimately dependent on your age and coverage amounts requested. You may be able to obtain coverage without a medical exam if you meet certain criteria.
Read the full review: Transamerica Life Insurance
Best Instant Issue Term: MassMutual
MassMutual was founded in 1851 and is one of the oldest life insurers in the country. The company has an AM Best financial strength rating of A++ (Superior). It also has almost non-existent complaints with the NAIC. We chose MassMutual as the best instant issue term life insurance because of the options for simplified underwriting that let you get coverage immediately.
Simplified underwriting could help you get coverage quickly
Can apply online
Offers a free 10-year term policy for children
Limited policy information available online
Rates can be above-average in pricing for smokers and older applicants
MassMutual offers a direct term policy that makes coverage available for people ages 18 to 64 years old. The direct term policy uses simplified underwriting and allows you to apply online to obtain instant coverage. If they determine you will need a medical exam, they will cover you temporarily to give you time to set up an exam. The direct term policy is available in terms ranging 10 to 30 years with level premiums.
MassMutual also offers a free 10-year term life insurance policy to benefit children. The program is called LifeBridge and is part of MassMutual’s corporate social responsibility initiative. The program provides a free term life insurance policy with a $50,000 death benefit to qualifying parents or guardians of children under 18. If the parent should die, the child will receive money in a trust.
You can get quotes and apply online for MassMutual Direct Term insurance to see what they would charge you.
Read the full review: MassMutual Life Insurance
Best Return of Premium With Cash Value: State Farm
State Farm is a well-known insurer and consistently earns high marks for customer satisfaction. Established in 1922, the company has an AM Best Financial strength rating of A++ (Superior). These high ratings, in combination with the strength of State Farm’s strong Return of Premium Term plan and numerous discounts available, are what earned it the best return of premium with cash value spot on our list.
Above average amount of discounts available
High AM Best financial strength rating of A++
Can bundle over 100 different products across life, car, and home insurance
No medical exam coverage options are capped at $50,000
Can’t quote most policy types online
State Farm offers over 100 different products, including term, whole, and universal life plans. And, the company offers other types of insurance as well. This can be an advantage if you insure your home and car with them and want to have a bundling discount on your life insurance.
Among the term life plans that State Farms customers can choose from are Select Term, Return of Premium, and Instant Answer.
Select Term is available in 10-, 20-, or 30-year terms that offer renewable coverage up to age 95 without having to take an additional medical exam. Policyholders can also add a spouse or child to the policy and convert to a permanent life policy without an additional medical exam.
State Farm’s Return of Premium Term plan offers level premiums on either 20- or 30-year terms. This policy is unique in that it has cash value and it allows you to borrow money from the value of the policy, which is not common for a term life policy. However, unpaid loans reduce the death benefit until they’re repaid. These policies are available for issue up until age 45 on the 30-year term and age 60 on the 20-year term. If you are a tobacco user, the issue age drops by five years.
The Instant Answer Term policy is a no-medical-exam policy available for people ages 16 to 45, for maximum coverage of $50,000.
State Farm offers several riders including a guaranteed insurability rider (up to issue age 37), spouse or child riders, and waiver of premium for disability riders.
Read the full review: State Farm Life Insurance
Best for Young Families: Mutual of Omaha
Mutual of Omaha was founded in 1909 and has an AM Best financial strength rating of A+ (Superior). The company ranks fifth out of 23 insurers for customer satisfaction overall by J.D. Power in 2020. The company is known for its guaranteed issue and simplified underwriting policies, but the company has a full line of term life options with great benefits for people of all ages.
Great perks program to give you a variety of discounts
Can get a rider to pay premiums of unemployed
Simplified underwriting process
Limited policy information available online
Two-year waiting period on death benefits on some policies
Mutual of Omaha has multiple options for term life insurance with issue ages of 18 to 80 years old. There is a simplified issue (no medical exam) Term Life Express policy, a Term Life Answers plan, and a Term Life Complete plan that has regular medical underwriting. Policy terms are available for 10-, 15-, 20-, and 30 years.
The 20- and 30-year terms on the express policy offer a return of premium rider. Policies have either level premiums for the duration of the term or you can choose to have a guaranteed premium for the first five years of your term and increase pricing thereafter. Death benefit amounts range from $25,000 to $1 million, depending on the plan.
Beyond the usual riders like child’s coverage, accidental death benefit, and disability waiver of premium riders, Mutual of Omaha also offers riders to help you in certain life events like job loss, with a waiver of unemployment rider (pays your premiums for a limited time if you are unemployed), and a residential damage rider (this waives your premiums for six months if your home sustains damage of $25,000 or more). These extra benefits are why we chose the company as the best for young families.
Mutual of Omaha also has a value-added perks program that provides cost savings and discounts for wellness services including massages, savings for home mortgages, and discounts on eyeglasses, among others.
Read the full review: Mutual of Omaha Life Insurance
When looking for the right term life insurance company you want to find a provider that has strong financial strength and offers the right coverage options for your situations. An easy and streamlined process is important but not if it costs you the coverage amount you need or prohibits you from adding important riders for your policy.
Of all the companies we’ve reviewed, Northwestern Mutual offers the right blend of affordability, speed of the application process, and total coverage options.
What Is Term Life Insurance?
Term life insurance is a contract between a policyholder and an insurance company that provides a certain amount of money (the death benefit) if the insured person dies during a defined period of time (the term). Term life insurance is commonly used to provide money to families or dependents so that a sudden loss of income doesn’t cause them financial hardship.
Term life insurance is also important for those who are not a primary income earner, but nevertheless support their families as state-at-home parents or caregivers for children or elderly parents. In these cases, term life ensures that there is money to pay for hired help to step in if a tragedy happens so that family members can maintain their quality of life as much as possible.
Do You Need a Medical Exam for Term Life Insurance?
Most term life insurance policies will require you to get a medical exam because your premium will depend on the risk your health brings. Some term life insurance providers offer a streamlined process that only requires you to answer a medical questionnaire but those policies are typically capped at $50,000 or less in coverage.
Which Is Better: Term or Permanent Insurance?
Term life insurance covers you for a limited time period, whereas permanent life insurance covers you for life. The key differences between the two are in the length of time you are covered and in the benefits and coverage provided. Permanent life insurance policies offer a death benefit but also include cash value accumulation. Some make you eligible for dividends.
Permanent insurance also allows more flexibility in premium payments, and you can also use the accumulating cash values to borrow from later on. Which one is better depends on what you want to accomplish with your life insurance.
Covering temporary debts
When you want lower premiums
To supplement other life insurance
To provide coverage to pay off a specific debt like a mortgage
Paying final expenses
Using life insurance for savings
If you want the option to borrow from your policy later
If you want flexible premium payments
You can also stack policies, split your protection, or combine permanent life and term life in order to meet your specific needs.
Why Get Term Life Insurance?
People often hear about term life insurance as a good choice when you have a limited budget or have short term debts or costs of living that would disappear over time. Term is also a good solution for buying supplemental life insurance if you only have a limited amount of insurance through your workplace. Young families rely on term life insurance as an affordable option to provide a death benefit so that the family does not go through unnecessary financial hardship due to the loss of one or both parents.
According to LIMRA, it would take less than a year for most families to feel the financial impact of the loss of the primary wage earner in the family. Overall, life insurance will never replace you, but term life insurance can provide a payment to replace whatever income (or support) you would have been able to provide your family or dependents if you were there, enabling them to live the lifestyle you were providing.
Some examples of how term life insurance can be used are to:
- Pay off a mortgage
- Replace lost income
- Provide for college or schooling of your children
- Pay off other debts (credit cards, loans)
What Is the Cost of Term Life Insurance?
Costs of term life insurance vary depending on the insurance company you choose, the coverage amount, policy features, your health and lifestyle, where you live, and age. We ran sample quotes for term life insurance from 10 of the top life insurance companies for applicants 25 to 55 years old in good health and found monthly premium estimates ranging from $10 to $63.
What are Term Life Insurance Rates by Age?
The rates for term life insurance are going to depend on not just your age but also your gender, the amount of coverage you need, the term of your policy, and, typically, your overall health. Let’s look at some generic ranges of what you could end up paying for a large coverage policy of $500,000 that carries a 20-year term.
|Age||Average Monthly Premium Range for Women||Average Monthly Premium Range for Men|
|30||$175 - $200||$220 - $240|
|40||$280 - $300||$330 - $350|
|50||$640 - $660||$830 - $850|
The total amount you’ll end up paying will depend on a number of factors that make it difficult to predict. This is why you should apply directly with a provider or talk to a life insurance agent about your situation.
How to Get the Best Term Life Insurance Quotes?
You’ll typically get the best term life insurance quotes if you apply when you’re younger. However, being in good health is another way to get the lowest quote possible. If you’re wanting to prepare in advance of applying for life insurance to lower your potential premium then you can work on your health by losing weight or quitting any smoking habit you have. You can also immediately stop any activities like skydiving or flying planes that the insurance company might find risky or dangerous.
Do You Need a Medical Exam for Term Life Insurance?
Although common to obtain most life insurance policies, there are a number of no medical exam life insurance policies you can buy including term life insurance. When buying these policies, you will not be required to undergo a medical exam, blood tests, or other procedures that might disqualify you from coverage. However, you might have to answer a few questions about your health, including disclosing any pre-existing conditions.
Should you choose one of these policies, it is possible that some of the benefits of term life insurance may be left out. For instance, your policy might not have a cash value, your coverage and payout amounts might be lower, and your premiums might be higher.
Depending on your health, age, and budget, traditional term life insurance could be a better choice.
Is Term Life Insurance Worth It?
Term life insurance is a great option to give your family peace of mind that they will be taken care of if the worst happens. If you buy term life insurance with riders that offer benefits like critical illness, chronic illness, or disability income riders, then term life insurance gives you value-added features to protect you financially when something goes wrong (even if you outlive the term).
If you are strategic with your term life insurance policy purchase and do the research about the options available to you, term life insurance can be a good investment to ensure financial stability for the people you care about, for the term of your policy and possibly beyond.
How We Chose Term Life Insurance Companies
We reviewed over 25 life insurance companies to identify the top insurers. To identify the best options for term life, we did specific research into each company’s term life offerings, underwriting process, and policy features. We sampled pricing and explored what special advantages each company provided with value-added services, perks, money-back options, or riders. To make the final cut, companies had to offer policies nationwide and provide multiple term options available across most age groups.
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