Life Insurance Review Methodology

How we reviewed and rated each life insurance provider

Life insurance is an essential part of providing security for your family; it can also be used as part of an investment strategy, a savings vessel, or for estate planning. There are several choices when trying to decide what kind of life insurance you need, and it can be challenging to sift through all the options on your own to figure out which life insurance company will offer you the best insurance for your needs.

So we've done the legwork for you. We spent countless hours researching and reviewing 25 major life insurance companies to give you the best possible assessment. Here’s our methodology on how we reviewed each of them.

Life Insurance Review Methodology

In order to create an objective method, we decided to break down different areas of an insurance company's profile (age and financial stability), the user experience (the ease of getting quotes and complaints), the types of insurance available, and cost.

We looked at every insurer on our list and reviewed them in six primary categories:

  1. Diversity of product lines
  2. Additional product lines
  3. Stability and reliability
  4. Customer service
  5. Customer satisfaction & complaints
  6. Cost

A rank of 1 (lowest) to 5 (highest) was assigned for each category, which we then tabulated to get an overall rating based on 1 to 5 stars.

Companies with the highest possible rating were those that met all (or the majority of criteria) in each category and vice versa. As an example, companies with limited product offerings may have scored lower simply because they did not fulfill the complete criteria in the category.

Diversity in Product Lines

We researched the number of policy types and policy options offered by each of the insurance companies for each of our reviews. The three main aspects we investigated included:

  • Types of policies offered
  • Riders
  • Discounts or money back options

Using this criterion, we were able to review the scope of coverage each of these insurers was capable of offering, as well as the additional advantages each life insurer could offer you.

Types of Life Insurance Policies

We wanted to know how many plans a life insurance company could provide you with and we also reported this in our series of Life Insurance Reviews.

We checked for the availability of each of the following life insurance policy types with each of the companies we reviewed and assigned points for each of the following categories or policy types. Companies with the most diverse product offering scored the highest:

  • Term with more than 3 term options: For example, 10-year term, 15-year term, 20-year term.
  • Term with conversion: Allows you to convert your term life policy to a whole life or universal life policy down the line – often without having to take a medical exam, or undergo additional underwriting.
  • Level Premium Term: This allows you to avoid unexpected premium increases by locking in a “level” premium for the term, as opposed to policies that increase annually or every few years.
  • Guaranteed Issue Life Insurance: Does not require a medical exam.
  • Whole Life: A type of permanent life insurance that provides insurance for your entire life, or up to a specified age such as up to 121. This type of policy provides a death benefit and cash values (accessible savings).
  • Universal Life: Another type of permanent life policy that may allow greater flexibility in premium payments or cash value options.
  • Index or Variable Universal Life: A universal life policy that may involve a higher risk because the cash value portions have elements that may be based on market fluctuations.
  • Survivorship Life: A policy that insures two people, but only pays out when the second dies.
  • Final Expense: These are often lower-valued policies used when people want to secure smaller amounts of coverage to cover end of life or funeral expenses.

Each product type is valued at one point. Once we tallied the diversity of products each life insurance company was able to offer you, we then dug deeper to look into the value-added options such as available riders, money back premium offers, and the opportunity to earn dividends. The combination of the above policy types and the riders along with money-back options found gave us a score on a maximum value of 15 points.

The companies were ranked as follows:

  • Excellent (5): 11 to 15 points
  • Great (4): 8 to 10 points
  • Good (3): 6 to 7 points
  • Fair (2): 4 to 5 points
  • Poor (1): 3 points and under

Why Riders Matter in Life Insurance

We investigated how many riders were available and what options each life insurance company offered. An insurance rider provides you with the opportunity to add coverage or financial protection elements to the policy. A company offering several options for riders provides you greater flexibility and an opportunity to customize your life insurance to your needs and family needs. We included a review of available riders in our assessments, to help you choose.

Not every insurance company offers any or all riders, but knowing they are available can make one insurance company a better choice for you over another.

Here is a sample list of some of the insurance riders we found during our research:

  • Living benefits riders that give you access to cash or income if you need it due to a critical illness, or other situation requiring long term care
  • Riders that pay your premium if you are unemployed
  • Riders that give you a return of premium if you outlive your policy
  • Riders to add your children or spouse to your policy, instead of having to buy another policy to cover them
  • Riders to convert your policy from a term life policy to a permanent or whole life policy
  • Riders that pay your premiums if you become disabled

Discounts and Money Back Options

In our review, we also acknowledged companies that provided money back options, discounts, or participation in dividends. Here is the breakdown of what we included in our assessments:

  • Riders that give money back
  • Programs that provide discounts for participation in active lifestyle programs
  • Companies that provide discounts for insuring more than one product with them
  • Insurers who offer you the option of receiving dividends

Additional Products Offered

Studies have shown that customer satisfaction increases based on the number of services a company can offer. We checked each life insurance company to see what other products or services they provided in the following categories:

We then assigned a ranking on a scale of 1 to 5 as follows:

  • Excellent (5): Five additional products
  • Great (4): Four additional products
  • Good (3): Three additional products
  • Fair (2): Two additional products
  • Poor (1): One additional product

Although many life insurance companies offer other products or services, such as State Farm who has over 100 different products or services available, we used some of the more common categories found among most. We included home and auto because this is not a standard offering by life insurers. It can be convenient to have all insurance in one place where your agent fully understands your household's risk.

Stability and Reliability

The stability and reliability of an insurance company is an important part of the review. It's what gives consumers confidence that a company will pay benefits to beneficiaries. In our research for each life insurance company, we included information on:

  • Company background and history, including market share
  • Financial Strength Rating (FSR) by AM Best
  • Overall consumer sentiment using third party independent sites
  • How many years the company has been in business
  • The number of states it is licensed in
  • The maximum amount of insurance a company will provide for the death benefit

Financial Stability Ratings: AM Best  

There are five independent agencies that rate the financial solidity of an insurance company based on their own unique criteria: A.M. Best, Fitch, Kroll Bond Rating Agency (KBRA), Moody’s and Standard & Poor’s. We used AM Best as a representation of the Financial Strength Rating for the insurance companies in our review because the broadest number of companies are rated by this evaluator.

AM Best was founded in 1899 and is the world’s first credit rating agency. They review and rank using financial information from over 16,000 insurance companies worldwide. AM Best is recognized by the National Association of Insurance Commissioners (NAIC), as well as by the Securities and Exchange Commission (SEC) as a Nationally Recognized Statistical Rating Organization (NRSRO).

The Meaning of an AM Best Financial Strength Rating

The following table is AM Best’s rating legend, taken from AM Best.

We scored each life insurance company’s AM Best rating on a scale of 1 to 5 as follows:

  • Excellent (5): Superior rating A+, A++
  • Great (4): A, A-
  • Good (3): B, B-
  • Fair (2): C+, C++
  • Poor (1): C, C-, D

J.D. Power Rankings

Every year J.D. Power conducts independent research on customer sentiment in several fields, one of which is life insurance. We used the information from the J.D. Power Life Insurance Study’s overall customer satisfaction index rankings as part of our research and ranking for our life insurance reviews. The J.D. Power rankings are a good source of information covering six different areas of customer sentiment over 25 insurers. We explored each of these to include them in our rankings.

These are the six areas of customer satisfaction ranked in the J.D. Power Study:

  1. Product Offerings
  2. Price
  3. Statements
  4. Interaction
  5. Communication
  6. Application and Orientation

These six areas provide the Overall Satisfaction Score by J.D. Power. While we used this as a gauge, it was not heavily weighted in our overall rating process since J.D. Power requires companies to pay for a licensing fee to be rated, potentially skewing some results.

The J.D. Power rankings are based on a 1,000 point scale which assigns ratings on a range of two to five Power Circles. Power Circles are sampled consumer ratings for specific criteria and are broken down as follows:

Accessibility

For accessibility, we looked at where each life insurance company is licensed to operate in the U.S. Companies can be national, limited national, regional, or state-exclusive. We used a scale of 1 (lowest accessibility) to 5 (highest accessibility).

The rating breakdown is:

  • Excellent (5): National (with under 5 excluded states)
  • Great (4): National (5 to 34 excluded states)
  • Good (3): Regional (6 to 15 states)
  • Fair (2): Regional (2 to 5 states)
  • Poor (1): One state

Years in Business

How many years a life insurance company has been in business can say a lot about the staying power of a company and their ability to adapt to consumer needs over time. Life insurance has been sold in the United States since 1759. According to the Encyclopedia Britannica, between 1870 and 1872, 33 life insurance companies failed, with another 48 failing between 1873 and 1877. Over the past century, many of today's long-standing companies have survived very trying times, meeting their commitments through challenges like the Great Depression.

Here’s how we assigned rankings for how long the insurer has been in business, on a scale of 1 to 5:

  • Excellent (5): 125 or more years in business
  • Great (4): 100 to 124 years in business
  • Good (3): 50 to 99 years in business
  • Fair (2): Five to 50 years in business
  • New (1): One to five years in business

Life insurance companies often grow by acquisition, and many of these integrate the long-standing history of the acquired companies into their historical background. Most insurers have at least 50 to 100 years in business. If the service model of the newly formed company was significantly different from the parent company that they spun off from, we did not consider the previous history but instead considered the date of operation of the new company’s registration.

It's important to note that, in the modern era, if an insurance company is experiencing financial difficulties, it will likely be bought out by a bigger, more stable insurance company. While this should give policyholders confidence, there could be adjustments to servicing and deliverables consumers should be aware of.

Coverage Capacity: How Much Life Insurance Can The Company Offer You?

Finally, we looked at coverage capacity. Coverage capacity indicates how big of a policy you can get. Companies that could only offer limited amounts of insurance, such as $25,000 death benefit scored on the lower end of the scale compared to insurers who had the financial capacity to offer coverages in the millions of dollars if needed – in some cases up to $65 million. Since many families are looking for policies valued at several hundred thousand dollars, we used $500,000 as the top-tier benchmark.

  • Excellent (5): $500,000 +
  • Great (4): $300,000 to $499,000
  • Good (3): $100,000 to $299,000
  • Fair (2): $25,000 to $99,000
  • Poor (1): Up to $25,000

Customer Service

We reviewed the following elements of the customer service experience to determine a customer service ranking on a scale of 1 (lowest) to 5 (highest).

  • Application and orientation: How quickly you can get insurance.
  • Method of service: How, where, and from whom you can purchase your products or get assistance from.
  • Online support tools: The ease of which you can obtain information and get service online.

When it comes to customer service from a life insurance company, your experience with term life insurance versus permanent life insurance will be different. We considered things like whether people need help choosing riders at the onset of the policy or whether or not they need assistance managing cash value over time.

Third-Party Ratings and Method of Sale of the Product

We understand that many third-party rating entities require payment for participation or potential ratings, so while included them, we limited the overall weight in our evaluation. Where it is most helpful is in corroborating reviews and complaints. As such, we considered how products are sold (strictly online or with an agent's assistance) to determine whether or not that aids in preventing negative experiences.

We checked how you could expect to get service. In many cases, we called the insurance companies to verify what you could expect. We checked if you could get assistance via a phone agent or local agent who could only offer one product to you versus a broker or financial advisor who could provide comparisons for products or face to face meetings.

Insurers who fostered the ability for you to build a relationship with an agent, financial planner, or broker received the highest ratings. Insurers who only offered limited service levels, such as agents who could only discuss one type of insurance, or only provided service through online quotes received lower rankings due to the limited advice they could offer overall. The more options a company provided, the higher the rank in this portion of our reviews.

We used the following criteria to assign a score from 1 to 5:

  • Excellent (5): Financial Advisors, Brokers
  • Great (4): Captive Agent
  • Good (3): Multiple agent (plus website and call center)
  • Fair (2): Website with call center and/or chat
  • Poor (1): Online Quote and Purchase (Self-serve)

Online Resources

An important element of understanding your life insurance is to be able to do a little research beforehand. Research shows that six in 10 people use social media to learn about products and services. We researched how many options each insurance company offered clients or potential clients to do research about products, ask questions, and get answers (online). We also looked into how many of these insurers provided online policy or account management.

We checked to see if the insurers offered apps to help you manage your policy, and what their processes were for submitting a claim or changing a beneficiary.

How We Measured Online Resources

Here’s a list of some of the elements we tested and used to compile a rank for each life insurance company in the category of transparency and online services:

  1. Do they offer an online quote?
  2. Do they offer a life insurance estimator tool?
  3. Do they offer a search for a lost life insurance policy?
  4. Do they offer the option to manage or make changes online?
  5. Do they have forms available online?
  6. Do they have an FAQ?
  7. Do they offer interactive blogs, videos, access to deeper information like brochures?
  8. Do they have comparison tables to help you understand the difference between life insurance products, or who each product may be good for?

Point System Criteria

We assigned the following ranks based on a points system as described:

  • Excellent (5): 13 to 15 points
  • Great (4): 10 to 12 points
  • Good (3): 6 to 9 points
  • Fair (2): 3 to 5 points
  • Poor (1): 1 to 2 points

How We Tested Online Tools

Once we determined what options were available, we tested the online quoting tools, as well as the life insurance estimator tools. We completed online forms to see what the resulting user experience would be.

We integrated our observations into each of our reviews to help our readers understand what to expect or and what the customer path was when using these tools.

Where companies offered an “online quote” but did not deliver an actual quote online, they did not receive points compared to other life insurance companies who provided the online quote as promised.

Customer Satisfaction

The insurance industry is regulated. When an individual has a problem with an insurance company that can not be resolved with the insurer, it is the State Insurance Commissioner who can help you resolve that claim.

The National Association of Insurance Commissioners (NAIC) maintains a registry of complaints filed against insurers. The registry provides information on the nature of complaints, as well as the anticipated level of complaints that would be normal for an insurance company to received based on market share and size.

We used the information found in the NAIC registry to validate our ranking for complaints. We looked at data over recent years, and checked the complaints ratios for consistency, to look for any patterns of change over the years that might be notable and reported these in our reviews where applicable. We used the most recent complaint ratios to determine a score from 1 (lowest) to 5 (highest) based on data from the NAIC. You can also do your own search for complaints and company information at the NAIC here.

Here’s How the NAIC Determines the Complaint Share Report

The complaint ratio is organized by policy type categories. We searched the Individual Life Insurance Category for the complaint ratios and used these in our reviews.

The NAIC collects the total number of complaints per category among all insurers per calendar year. This number allows for a calculation of the company’s “Complaint Share” of all complaints nationwide. The NAIC then uses the total amount of U.S. based life insurance premiums collected by the life insurer in relation to all life insurers in the U.S. market. This gives them a market share number for the insurer. Then the life insurance company’s complaint share is divided by their market share to obtain their complaint index number.

The NAIC determines a national median complaint index number as a baseline comparison point with the median index always being 1.0. This represents the expected average complaint number in any given year. The complaint index number is then divided by the national median complaint index number to obtain the company’s complaint share. Anything above 1 is representative that the company has received above-average complaints about a company of its size and market share.

For example, a score of two would indicate a company receiving twice the number of complaints than expected. Anything below one represents a lower than expected number of complaints, with zero being half of the anticipated number of complaints compared to others in the industry based on size, market share, and product line.

In cases where a score was drastically higher than the expected norm, we researched the reasons complaints were submitted and reported these in our life insurance reviews to help you put into perspective the nature of the complaints.

Some examples of categories of a complaint are:

  • Underwriting
  • Delays
  • Premium notices
  • Surrender problems
  • Claim handling
  • Denials of claims

The reports also provide information about the resolution of complaints and showcases where the life insurer’s decisions were maintained or overturned as a result of the complaint.

We used the following scale to rate each insurer's complaints:

  • Excellent (5): < 0.50
  • Great (4): 0.50 to 0.75
  • Good (3): 0.75 to 1.0
  • Fair (2): 1.0 to 1.5
  • Poor (1): > 1.5

Better Business Bureau Rating

We verified the Better Business Bureau (BBB) rating for each insurer. The BBB provides an opportunity for consumers to rate service providers, including insurers. However, the ratings of consumers do not impact the BBB rating of the business, instead, the BBB uses information such as:

  • How the business responds to the complaints on the site.
  • How long the business has been in operation.
  • The BBB also researches government actions against a company and includes any known issues into their ratings for their accredited businesses (a business does not need to be accredited to receive a BBB ranking).

The BBB’s ranking credibility has been brought into question over the years. Therefore, the BBB rating and information was used as a checkpoint to read about what consumers were sharing about their experiences in general, and the BBB rating was weighted minimally for the purpose of our ranking.

Due to insurance being a regulated industry, other more authoritative measures such as the NAIC reports were what our complaints scores were based on.

However, we used the following scale to rate each BBB ranking in our calculations:

  • Excellent (5): A+
  • Great (4): A, A-
  • Good (3): B+, B
  • Fair (2): B-
  • Poor (1): < B-

How We Compared the Cost

We researched the cost of each life insurance company by running online quotes for a direct comparison whenever possible and provided samples of the comparisons for men and women aged 25, 35, 45, 55, and 65 (depending on the insurer). We also ran comparisons of the cost for children’s life insurance, where this was a specialty of the life insurance company.

Using these factors, we reported our findings in our life insurance reviews. If an insurer was better known for reasonable pricing in one area, we tested that against competitors and also shared those detailed results with an analysis in the individual life insurance company’s review.

Payment Terms and Flexibility

Life insurance can be paid in different ways, or on different payment terms. We explored which payment options each company offered and reviewed these by policy type where applicable. Points were assigned for each category, and companies with the most payment options received the highest scores. Payment options included:

Level pay or level premium: When the cost of the insurance is locked in so it makes it easier to budget. This option is either for the life of the policy or for a limited time, such as five years.

Monthly, semi-annual, quarterly, or yearly: Based on your budget, and choice of policy, some companies offer flexibility giving you the option to pay premiums from monthly to annually.

Lump-sum or upfront payment options: In some cases paying for a whole life policy upfront can be used as a strategy to build cash values sooner than if you paid it over time. Some companies also offered the option to buy additional insurance using a single payment, without additional medical exams or underwriting.

Although most insurers offered standard monthly or annual payment options, some of the other options varied greatly among insurers, some based on the plan type you chose, or whether or not you selected the option as a rider. We covered these findings in each individual insurer’s review where applicable.

We used the following ranking to score each insurer in this section as follows:

  • Excellent (5): Limited pay options, one-pay, and monthly
  • Great (4): Two of the above
  • Good (3): One of the above

Consumers should be aware that costs range widely. A small term policy for a young, healthy individual might be as low as $15 per month while permanent insurance for a middle-aged person in average health might be several hundred dollars or more depending on the desired coverage. Consumers should shop rates to always confirm they are getting the best price for the desired policy.

Choosing the Best Life Insurance For You

Our 25 top insurance company reviews were written with the consumer in mind, knowing the questions you might have, and the answers you need to make an educated choice about such an important purchase. We looked at service models and read the fine print, to help you sift through the information using a comprehensive methodology.

Choosing the best life insurance is highly individual. When you are looking for a life insurance company, you may be wondering about pricing, coverage, who has a good reputation (or not), and how each company aligns with your own needs. Our reviews were structured to give you the opportunity to look at features, pros, cons, and to give insight into which company may align with your needs and lifestyle. Our reviews are intended to be a resource and are for informational purposes.

The information in our reviews should not be considered insurance, legal or financial advice and are based on general information available at the time of review. Insurance companies change their products, pricing and strategy on a regular basis, therefore, you should always speak to a professional to learn what financial products will best suit you. In the end, every consumer needs to determine what is best for them.