There are many good reasons for purchasing term-life insurance. If you need a policy for a specific term of 5, 10, 20 or more years, term-life insurance gives you this option. A term life insurance policy is also more affordable than purchasing whole life insurance if you have budget considerations. Some term life insurance policies also have an option to convert to a whole life policy at the end of the policy term so that is something to keep in mind as well.
Regardless of your reason for purchasing term-life insurance, you need a life insurance company you can count on to be there when you really need it. Some things to look for when considering a term-life insurance company include financial strength, customer satisfaction, policy offerings, value for price and company reputation. The life insurance companies on our list have received consistently high ratings in one or more of these categories and are among the best options on the market.
We teamed up with QuinStreet to help you get life insurance quotes from the following insurers. Below the table, we list our picks for the top term life insurance companies and why we chose them.
Best Term Life Insurance Policies of 2020
- State Farm: Best Term Life for Bundling Policies
- New York Life: Best Term Life for Financial Strength
- Transamerica: Best Term Life for Policyholders Over 50
- AIG: Best Term Life in Customer Service
- Voya: Best Term Life for Employers' Benefit Plans
- Northwestern Mutual: Best Term Live Value for Converting to Whole Life Plan
- John Hancock: Best Term Life in Overall Customer Satisfaction
- MassMutual: Best Term Life Value for Price
State Farm has coverage options for several lines of coverage (homeowners, auto, life and more), which is something you don’t see from companies who only specialize in life insurance. This can qualify you for some attractive life insurance discounts, especially if you have another policy with State Farm. With bundling bundle life, health, homeowners and auto coverage, you can save significantly on your premium. From the 2017 Insure.com rankings, these are State Farm’s scores (on a scale of 1 to 100): 92.5 overall customer satisfaction; value for price 93; customer service 93; 87% would recommend. State Farm received an “A++” financial strength rating from A.M. Best and a 4 out of 5 rating from Consumer Affairs.
Term-life insurance through State Farm is available in terms of 10, 20 or 30 years for up to $250,000 face value. Premiums are payable monthly or annually and you have the options to continue coverage on a renewable basis up to age 95. Premiums may increase annually but will never exceed the maximum premium in the policy terms. The death benefit is tax-free. You can add additional coverage with riders for children’s coverage, an additional named insured on the policy and a waiver of premium rider if you become disabled prior to age 60.
Why do you think financial strength might be an important factor in choosing an insurance company? You guessed it! It is that company’s ability to pay on a claim. There is little danger that this company is going to close its door or be unable to meet its financial obligations. In addition to having the highest financial strength rating of “A++” from A.M. Best, New York Life also offers a variety of term-life policies that are customizable to your unique needs and financial situation. It also has short-term policies available (policy term of five years). Pricing was also a big consideration (30 percent of people choose this company because of price). In additional to life insurance, New York Life also offers long-term care insurance.
New York Life offers term-life insurance with several options including yearly convertible term policies, level premium convertible term policies and policy riders that add extra benefits. Policy terms are available for periods between 10 and 20 years with guaranteed premium options available for as long as 20 years. The policies are upgradable to a whole life insurance policy at the end of the term. There are several policy riders available to add coverage for accidental death, children’s insurance, chronic care, disability waiver of premium, living benefits and more.
A unique thing to love about Transamerica life insurance is its term life policy for 30 years for “over 50” policyholders up to age 58. Most life insurers do not offer this option. From the 2017 Insure.com rankings Transamerica received 81.5 in overall customer satisfaction with 83% of policyholders who would recommend Transamerica to others. Transamerica has an “A+” Superior rating through the A.M. Best insurance rating organization. It offers universal, variable universal and term life insurance products as well as variable and fixed income annuity products.
Term life insurance through Transamerica is offered in policy terms ranging from 10 to 30 years in five-year increments in values of $25,000 to $2,000,000. Some policies do require a medical exam. There are two term-life insurance policy types available through Transamerica; Trendsetter Super Series (up to $1,000,000 in coverage with a guaranteed premium that is convertible to a whole life policy at the end of the term); and the Trendsetter LB (up to $1,000,000 with living benefits option to receive an accelerated death benefit with a qualifying illness while you are still alive).
From the 2017 Insure.com ratings, AIG scores 89.4 in overall customer satisfaction. What does it mean to be top in customer service? It means that the company is not satisfied unless you are. AIG also has an “A” financial strength rating with A.M. Best and a 4 out of 5 rating by ConsumerAffairs.
Term life insurance through AIG is offered in term choices of 10-, 15-, 30- and 35-year terms. A unique feature of the AIG term-life policy is the AG ROP Select-A-Term option where you can get money back when you reach the end of your policy term without a claim. The money is guaranteed and also tax-free.
Voya has long been a top life insurance provider. It won the People’s Choice Award No. 1 spot with a score of 97.1 out of 100 in overall customer satisfaction from Insure.com. Voya is A.M. Best “A” rated in financial strength. Voya was formerly known as ING U.S., Inc. Its term life is only available through its employers’ benefits programs. Plans and terms vary by state.
Voya offers a discount for paying annually and has terms for 10, 15 or 20 years with values ranging from $100,000 to over $1 million. There are accelerated death benefits and a waiver of premium rider should you become disabled. Voya is better known for its universal life insurance products but is still a reputable company with high ratings. If your employer has a term life policy offered through Voya, it is a good option to consider.
The reason for naming Northwestern Mutual as the best term life policy to convert to a whole life plan is the dividend payment potential. Northwestern permanent life insurance policyholders can expect to receive over $5.3 billion in dividend payments in 2018 according to its company representatives. As a mutual company, Northwestern Mutual is owned by its policyholders and shares profits with policyholders through dividend payments. Northwestern Mutual also scored 89.3 out of 100 in overall customer satisfaction in the 2017 Insure.com ratings. Northwestern Mutual has an “A++” financial strength rating from A.M. Best.
Four term-life policies are available from Northwestern Mutual, including Level Term 20 (level premium for 20 years); Level Term 10 (level term for 10 years; Term 80 (this is an annually renewable policy with rates that are not guaranteed from year to year. However, this policy is guaranteed renewable to age 80); Term 10 (annually renewable coverage for 10 years. After 10 years, you would have to purchase a new policy to retain coverage.)
John Hancock was a well-known American Revolution patriot and is the inspiration for the company name. The company was founded in 1862 and is headquartered in Boston, Massachusetts. The company has a top score in overall customer satisfaction from the Insure.com ratings, scoring 90.4 out of 100. John Hancock also does well in the affordability category with an 88 score in value for the price.
Term life Insurance through John Hancock is offered in policy terms of 10, 15, or 20 years with a minimum policy value of $100,000. The policy premium is guaranteed to remain level (not increase) for the term of the policy. As is common with many life insurance companies, John Hancock offers the option to turn a term life insurance policy into a whole life insurance policy at the end of the policy term.
MassMutual has a long-standing reputation as a top life insurance company and received a score 91 out of 100 in value for price in the Insure.com People’s Choice Awards. MassMutual has an “A++” financial strength rating from A.M. Best. Because it is a mutual insurer, customers are also owners and receive dividends.
Term life insurance through MassMutual pays a lump-sum benefit available with level premium amounts guaranteed for a specific amount of time (usually 10 or 20 years). The premiums may increase after this time. With MassMutual, you have the option of converting the term life policy into a whole life insurance (also known as a permanent life insurance) policy without having to undergo any additional health questions or physical examinations. By converting the term life policy into a whole life policy at the end of its term, you can gain benefits such as cash value for the life insurance policy.