Life insurance is a contract between a policyholder and an insurance company that states that the company will provide a financial death benefit upon the insured's death as long as premiums are paid. Knowing what options are available when it comes to pricing and available riders can help you decide what life insurance policy is right for you.
The best life insurance companies are those that customers can rely on, with high ratings for financial stability and customer satisfaction, few complaints, and robust product offerings. We also researched add-ons and riders that give some companies an advantage over others. Read on for our top picks.
Best Overall : New York Life
New York Life is the top-scoring insurer in our 2021 life insurance companies review. Established in 1845, it's the second-largest life insurer in the U.S. and has an AM Best Rating of A++ (Superior). The company is a mutual insurer, meaning that it pays dividends on eligible policies, which can add to the cash value of your policy investment. New York Life has paid dividends every year since 1854.
Highly reviewed company by both customers and J.D. Power
Good offering of additional riders, depending on the policy
AARP life insurance partnership for seniors
Quotes are not available online
Customer satisfaction rankings for New York Life are high, rated as better than most by J.D. Power (6 out of 23), and the complaints trend at the National Association of Insurance Commissioners (NAIC) is excellent, with few complaints for a company of its size (34 in 2020). In addition to the company’s abundance of insurance choices, this lack of complaints makes it our choice for the best overall life insurance provider.
The company offers term and permanent life plans, as well as plans for members of groups like AARP. You can purchase policies up to age 74 for term and up to age 80 for whole life products, some of which make you eligible for dividends. There are also universal life plans available.
New York Life offers riders to help you get the most value out of your policy, including a money-back rider, an accelerated death benefit rider (including chronic illness), and options to purchase paid-up additions. There's also a spouse's paid-up option, which enables a spouse to take proceeds from the death benefit and use it to purchase their own policy without a medical exam.
Quotes for New York Life are not available online. You will need to contact a New York Life financial specialist to determine what option is best for your needs.
Read the full review: New York Life Insurance
Runner Up, Best Overall : Northwestern Mutual
Northwestern Mutual was founded in 1857 and is the number one life insurance company in the U.S. by premiums written. The company has an AM Best Rating of A++ (Superior) with a very low level of complaints with the NAIC.
However, they did slip from a first-place finish in 2019 to fourth in the 2020 J.D. Power Life Insurance Study, but their score was still high, and fourth out of 23 is still a strong finish. Northwestern Mutual pays dividends on eligible policies, and in 2020, the company had a record-breaking year for dividend payouts with $6.2 billion paid to policyholders.
Provides many products across three main categories
They are the only provider offering a blended policy (both term and whole life)
Offers the possibility to collect dividends on some term life policies
Underwriting process or length of time isn’t clear
Doesn’t offer online quotes
Northwestern Mutual is the runner-up for the best overall life insurance company because of all the benefits, payable dividends, and variety of plans they offer, including the innovative blended policy. A consistently high-ranking insurer, they have an excellent reputation for providing the options and financial planning services to help you meet your goals, regardless of budget or age.
Northwestern Mutual offers several life insurance plans, including convertible term, level, and renewable term, whole life, and many universal life options. The company also has survivorship life policies, and they are the only life insurance company we found that offers a combined term and whole life policy. Additionally, they are the only insurer that offers the possibility to collect dividends on eligible term life policies, which is highly unusual.
Life insurance coverage through Northwestern Mutual is available for purchase from birth to age 80. You can expect that you will have to go through some form of underwriting, depending on your age and the plan you are applying for.
Read the full review: Northwestern Mutual Life Insurance
Best for Building Savings : MassMutual
Massachusetts Mutual Life Insurance Company has been in business since 1851 and has an AM Best financial stability rating of A++ (Superior). Like New York Life and Northwestern Mutual, MassMutual is a mutual insurer that pays dividends on participating policies.
MassMutual life insurance policies provide many opportunities to build savings through its whole life and universal life product lines. MassMutual has one of the lowest levels of complaints with the NAIC among all the insurers we reviewed.
Great policy options for building cash value
Strong selection of riders, depending on your policy
Offers some life insurance policies for children
Pricing isn’t readily available online for most policies
Average J.D. Power rating
If you are planning on building cash value through a permanent policy, it is important to consider the additional features of a policy, including dividends, any guaranteed rate of return, and investment options. MassMutual offers all these, which is why we chose it as the best choice for building savings.
MassMutual’s participating whole life policy offers guaranteed cash value options, a guaranteed death benefit, and dividend participation. There are also a few universal life options to choose from. These give you flexible payments with customizable premium options to build higher cash values, and you can place your money in Guaranteed Principal Accounts (GPA) or investment accounts, depending on the risk you want to take. The savings you build in both the universal and whole life policies allow you to borrow from the cash values of the policy.
MassMutual also has riders you can add to the policy:
- A life insurance supplement rider that allows you to use dividends to purchase additional values
- Guaranteed insurability riders
- A disability waiver of premium rider
- Accelerated benefit riders that can help you cover costs of long-term care
Read the full review: MassMutual Life Insurance
Best Term Life Options : AIG
AIG was founded in 1919. It issues policies through American General Life Insurance Company or the United States Life Insurance Company. The company has an AM Best rating of A (Excellent). AIG ranked below the industry average in customer satisfaction in the 2020 J.D. Power survey. Although they received 197 complaints in 2020, this was below the industry average, according to the most recent data from the NAIC.
Large amount of life insurance policies to choose from
Living benefits available for those will critical or terminal illnesses
Can choose the term that fits your needs
Slightly elevated customer complaint ratios, although still below an average amount
AIG offers 18 different term life policy options through various flexible term life plans. The company's Quality of Life (QOL) insurance program includes the advantage of living benefits for chronic, critical, or terminal illnesses. The maximum term is 35 years, and the policies have level premiums throughout the selected term. After the end of the term, policies can be renewed annually up to age 95. AIG’s breadth of term life options is why we chose it as best for accommodating all of your term life insurance needs.
AIG’s term offering is unique because you can choose the length of term you need instead of accepting the standard term lengths other insurers offer (such as 10 or 20 years). You can also convert the term policy into a permanent life insurance policy without proof of insurability during an eligibility period. The company offers life insurance with no waiting periods and no medical exams.
Besides the QOL plan, AIG also offers the option to add riders to the term policy:
- Child rider
- Accidental death benefit rider
- Terminal illness rider
- Waiver of premium for disability rider
Read the full review: AIG Life Insurance
Best Estate Planning Option : Guardian Life
Guardian Life Insurance Company was founded in 1860 and is one of the largest mutual insurers in the U.S. The company has an AM Best rating of A++ (Superior). Guardian Life has 112 complaints with the NAIC and is below the industry average for customer satisfaction in the 2020 J.D. Power U.S. Life Insurance Study.
Offers a whole life plan designed to help you transfer wealth
Good selection of riders to add on to your policy
Online quotes for term life only; for whole life you must speak to a representative
Possible lengthy approval process that could require a medical exam after underwriting
Guardian is our choice for the best option for estate planning because of its specialized tax-advantaged plan designed for wealth transfer called the EstateGuard Whole Life Insurance. EstateGuard is a survivorship life policy with built-in living benefits, the ability to build cash values and borrow from them tax-free, guaranteed death benefits, and level premium payments.
The plan also has cash value growth guarantees and makes you eligible for dividends. It has term and permanent insurance options available for purchase from ages 18 to 85.
Guardian provides riders that you can add to your policy, including waiver of premium, charitable benefit, accidental death, a DuoGuard rider that allows a surviving spouse to purchase life insurance without proof of insurability, index participation features on whole life policies, accelerated death benefit riders for long term care, and guaranteed insurability riders.
The EstateGuard plan requires you to speak with a representative to obtain a quote.
Read the full review: Guardian Life Insurance
Best Optional Features : John Hancock
Established in 1862, John Hancock is the fifth-largest life insurer in the U.S. and has an AM Best rating of A+ (Superior) for financial strength. For a large and well-established company, John Hancock has a low level of complaints (96) with the NAIC.
Offers life insurance to people with diabetes
Quick underwriting process
You can get premium refunds for completing physical activity
Term policies can’t be converted to permanent coverage
Company has a lower than average customer rating
We named John Hancock the best life insurer for optional features because of its innovative approach to motivating policyholders to live healthier lifestyles by offering premium rebates and perks focused on health and wellness. The company offers simplified underwriting (without a medical exam) and fully underwritten policy types. It is known for quick underwriting and providing reasonable rates for people with health issues, such as asthma, diabetes, or heart disease.
For example, John Hancock has a life insurance policy for people with Type 1 or Type 2 diabetes called Aspire. There's also a Quit Smoking Incentive (QSI) program that allows smokers to enjoy the reduced rates of non-smokers for the first three years of a policy. The stand-out feature of John Hancock’s life insurance is the Vitality Program which provides a fitness tracker and the ability to earn points that entitle you to premium refunds based on your physical activity.
The Vitality Program also gives you discounts and rewards with partners like Amazon and certain grocery stores specializing in healthier food choices. Some of the company’s plans give you access to the Life Track Policy Management service, which allows you to take a hands-on approach to managing your policy's cash values.
John Hancock has several life insurance plans, including term and multiple types of universal life. Additionally, the company provides a series of living benefit riders, a waiver of premium for unemployment riders (pays your premium if you are unemployed for up to 12 months), and critical illness and long-term care riders.
Read the full review: John Hancock Life Insurance
Best Guaranteed Issue : Transamerica
Transamerica has been around since 1904, is the eighth-largest life insurance company in the U.S., and has a financial strength rating of A from AM Best. Transamerica has average ratings for complaints with the NAIC and ranked 18th out of 23 insurers reviewed for customer satisfaction in the J.D. Power study.
Online quotes are available for some life insurance policies
Quick and simple underwriting process
Company doesn’t offer access to professionals to answer your financial questions
Customer ratings fall short of other providers
Transamerica’s financial strength and living benefit options for their simplified issue policies make them a strong contender. Although several companies offer a final expense guaranteed issue policy, Transamerica offers issuance for a large age range with final expense insurance available to age 85. The policy has a maximum limit of $50,000, which is higher than many other insurers, and the final expense policy has no waiting period.
In addition to final expense policies, Transamerica offers term life insurance, whole life insurance with level premiums and guaranteed cash values, and some universal life insurance products.
Riders with Transamerica include accelerated death benefit riders for nursing home or terminal illness, monthly disability income riders (which pays you up to $2,000 a month if you become disabled), a return of premium rider, and a child or grandchild rider.
Transamerica offers quotes online for final expense policies.
Read the full review: Transamerica Life Insurance
When getting a life insurance policy, the two most important things are making sure that the policy meets your needs and that the company will pay on the policy. Based on this, New York Life offers the best combination of coverage and additional rider options to help you tailor-make a solution for you and your family. Plus, the company is highly reviewed and has a long history of paying on long-term life insurance policies. This can give you the peace of mind you need to protect your family’s financial future.
Compare the Best Life Insurance Companies
|Company||AM Best Rating||Coverage Capacity||Issue Ages||Policies Offered|
|New York Life
|A++||$5,000,000 and up||Up to 80||Term life, whole life, universal life, variable universal life|
Runner-up Best Overall
|A++||$10,000,000||Up to 80||Term life, whole life, universal life, variable universal life, survivorship life|
Best for Building Savings
|A++||Not stated||Up to 90||Term life, convertible term life, whole life, universal life, variable universal life|
Best Term Life Insurance
|A||Not stated||Up to 85||Term life, guaranteed issue whole life, universal life, variable universal life, final expense|
Best Estate Planning Option
|A++||$1,000,000||Up to 85||Term life, whole life, universal life, variable universal life, survivorship life|
Best Optional Features
|A+||$65,000,000||Up to 90||Term life, universal life, variable universal life, indexed universal life|
Best Guaranteed issue
|A||Not stated||Up to 85||Term life, whole life, indexed universal life, final expense|
Frequently Asked Questions
What Is Life Insurance?
Life insurance is a contract between you and an insurance company. As part of your agreement, you pay premiums on your policy, and in exchange, the insurance company agrees to pay out a set amount of money to beneficiaries of your choice if you die during the duration of the contract. When you buy life insurance, you decide how long you need the insurance and how much of a death benefit you want.
Term vs. Permanent Coverage
Term and permanent life insurance both provide a death benefit in exchange for premiums. While term life insurance provides a death benefit for a limited amount of time, permanent life insurance includes a death benefit for the rest of your life—so long as you pay your premiums.
Permanent life also offers several advantages beyond the death benefit, including:
- The opportunity to build savings in cash value growth
- The option to borrow money from the value of the policy if you need it
- The ability to earn dividends (only with mutual insurers who offer participating policies)
- The opportunity to invest your cash value
- Flexible premium schedules
Overall, permanent life insurance is a more comprehensive product than term life. It offers the opportunity for saving and investing, plus a death benefit that is available for your lifetime. Where term life excels is when one needs lower-cost insurance or coverage for only a finite period of time. For instance, one may choose to carry term life protection only until children are through college and out on their own.
What Does Life Insurance Typically Include?
A standard life insurance policy provides a death benefit. Permanent policies also include cash value and, in the case of mutual insurers, dividends on eligible policies. In addition to these core offerings, most life insurance policies also offer several riders to help policyholders get additional value out of their policies. These riders are usually optional and increase the cost of your policy.
Some examples of riders include:
- Accidental death riders
- Living benefits or accelerated death benefits
- Waivers of premium if you are disabled
- Return of premium riders
- Child or spousal riders
- Guaranteed insurability riders
What Does Life Insurance Typically Exclude?
Life insurance covers death due to illnesses, accidents, and almost any other reason. However, most policies contain exclusions or waiting periods before the life insurance policy will pay out the full death benefit.
Here are some examples of common exclusions or clauses:
- An incontestability clause that can apply in the first two years of an insurance policy and allows the insurance company to challenge claims in that time period.
- Death as part of extreme sports or adventure activities, or if your work in a high-risk industry and die on the job.
- Failure to disclose all facts or answer questions on your life insurance application truthfully. Knowingly omitting or providing false information on an application are examples of insurance fraud.
What Are the Typical Costs of Life Insurance?
Most people overestimate the cost of life insurance by three to five times. The average cost of life insurance will vary depending on your age, health, sex, amount of coverage you choose, and the type of policy. Life insurance pricing can also vary depending on the state you live in and what kind of lifestyle you lead.
You can expect to pay up to 10 times less for term life insurance than for permanent life insurance because the term is for a limited time, and the policy does not have cash values. Prices for the cheapest life insurance start around $10 per month and can run into hundreds of dollars per month.
Is Life Insurance Worth It?
Insurance is about protecting your family’s financial security and avoiding financial hardship if an unexpected loss occurs. In the case of life insurance, it is about replacing the insured's income in case they die. If you do not need the protection, then life insurance is not worth it. If death would create a hardship, then life insurance is worth it, just as home or car insurance is worth it. Unlike home or car insurance, though, life insurance can also help you build savings.
A good way to make sure life insurance is a good investment is to take advantage of riders to include things that might happen besides your death. For example, get a return of premium rider if you suspect you will survive the term or a policy that will pay accelerated death benefits for chronic, terminal, or critical illness if you believe this may be likely given the state of your health.
How to Choose the Best Life Insurance Company?
Similar to picking an auto or home insurance company, there are several factors to consider when deciding which life insurance company is right for you. For starters, you'll want to consider your specific needs and whether the company offers life insurance products that will fit those needs. For example, if you have a young family and are the primary breadwinner, you'll want to find a company that offers affordable policies for young families. If you have health issues, you may want to consider an insurer that specializes in no-medical exam policies.
You'll also need to decide if you want a permanent or term insurance policy, as some are better for term life insurance policies than others. And if you prefer a permanent policy, you want to pick a company that specializes in those.
And, finally, when finding the right life insurance company for you, you'll need to keep a close eye on prices. The cost of life insurance varies widely by company and product type, so when shopping for a policy, you need to compare policies within your budget.
Finding the best life insurance company can be challenging, especially since the advantages of one company over another are not immediately obvious. Everyone’s needs are unique, so we looked at over two dozen insurers to come up with our list of the best life insurance companies. We researched each company’s financial stability, reputation, customer satisfaction ratings, complaints with the NAIC, and ratings with the BBB.
Our life insurance methodology also considered policy plan options, riders, and value-added benefits for various age groups and other specific needs. We looked at quotes, spoke with insurers and agents, and reviewed policy features, limitations, and advantages to finalize our selections for the best life insurance companies.