The best life insurance companies of 2021
Fact-checked with HomeInsurance.com
Protecting your loved ones’ financial future with a life insurance policy is one of the most important decisions you can make. Life insurance can ensure your family can replace your income after you die, pay off credit card bills and a home mortgage or cover the educational costs of dependent children. With so many insurance companies to choose from, and so many types of life insurance products, selecting the right policy might seem daunting. To help, Coverage has narrowed the list to find the top life insurance companies in the U.S. for your comparison.
The best life insurance companies
- State Farm: Best for one-stop shoppers
- Globe Life: Best for young families
- Nationwide: Best online life insurance tools
- Northwestern Mutual: Best financial planning options
- Mutual of Omaha: Best perks program
- New York Life: Best policy options
- Pacific Life: Best permanent life options
- MetLife: Best end-of-life benefits
- USAA: Best for military members
- Bestow: Best for millennials
|Company||J.D. Power overall satisfaction rating||AM Best rating||Policies offered||Standout quality|
|State Farm||838 out of 1,000||A++ (Superior)||Term, universal, whole||Best for one-stop shoppers|
|Globe Life||810 out of 1,000||A- (Excellent)||Term and whole||Best for young families|
|Nationwide||803 out of 1,000||A+ (Superior)||Term, universal, variable, whole||Best online life insurance tools|
|Northwestern Mutual||790 out of 1,000||A++ (Superior)||Term, universal, whole||Best financial planning options|
|Mutual of Omaha||789 out of 1,000||A+ (Superior)||Term, universal, whole||Best perks program|
|New York Life||784 out of 1,000||A++ (Superior)||Term, universal, variable, whole||Best policy options|
|Pacific Life||776 out of 1,000||A+ (Superior)||Indexed universal, term, universal, variable, whole||Best permanent life options|
|MetLife||773 out of 1,000||A+ (Superior)||Group universal, group variable, term||Best end-of-life benefits|
|USAA||NA||A++ (Superior)||Term, universal, whole||Best for military members|
|Bestow||NA||A+ (Superior)||Term||Best for millennials|
State Farm: Best for one-stop shoppers
State Farm ranked #1 in J.D. Power’s 2020 U.S. Life Insurance Study. But State Farm also stands out in the industry for its wide range of financial products, including auto, condominium, renters and small business insurance. State Farm also offers checking and saving accounts, education savings accounts, home loans, Roth and traditional IRAs and trusts.
State Farm’s life insurance products
- Term life: 10, 20- or 30-year terms, with coverage up to age 95.
- Universal life: joint and survivorship universal life available, as well as long-term care riders.
- Whole life: final expense, limited pay and single premium options are available.
Globe Life: Best for young families
Globe Life has offered life insurance to American families for 120 years. While other insurers focus on life insurance for adults, Globe Life provides coverage plans for the entire family. In fact, generations of parents have established a savings account for their children with a Globe Life children’s whole life policy, which requires no medical exam and offers up to $30,000 in coverage for just a couple of dollars per month. Globe Life also offers family plans, which provide life insurance protection for parents and their children.
Globe Life’s portfolio of life insurance products
- Term life: death benefit up to $100,000, no medical examination required and a money-back guarantee.
- Whole life: features a set premium rate for life.
Nationwide: Best online life insurance tools
Nationwide ranked #3 in J.D. Power’s 2020 U.S. Life Insurance Study, earning 803 out of 1,000 overall customer satisfaction index points. Besides offering a great selection of life insurance products, Nationwide also provides a fantastic collection of online tools to help you decide which type of life insurance you need, how much coverage you need and how much a policy will cost.
Nationwide life insurance products
- Term life: 10-, 15-, 20-, 30-year terms available, convertible to permanent life up to age 65 and renewable up to age 95.
- Universal life: adjustable death benefit and premium.
- Variable life: flexible investment options to help grow your tax-deferred cash value faster.
- Whole life: monthly, quarterly, semiannual and annual premium payment options.
Northwestern Mutual: Best financial planning options
Purchasing life insurance is a recommended component of any financial plan. Northwest Mutual’s financial advisors can help you create a more comprehensive financial roadmap to pay off consumer debt, find the right home mortgage or eliminate student loans. A Northwestern Mutual financial advisor can also help you plan for retirement or advise you on investments that fit your long-term goals, like annuities, IRAs, mutual funds and stocks.
Northwestern Mutual life insurance products
- Term life: convertible to whole life, with fixed premiums and no medical exam.
- Universal life: flexible premiums enable you to adjust payment frequency and the single premium option allows you to pay a lump sum premium for a lifetime of protection.
- Whole life: builds tax-deferred cash value.
Mutual of Omaha: Best perks program
Ranked #5 in J.D. Power’s 2020 U.S. Life Insurance Study, Mutual of Omaha provides exceptional life insurance coverage, plus an attractive perks program. The Mutual Perks program extends a wide range of discounts, which can save policyholders a bundle of money in their everyday lives. Participating businesses include amusement parks, auto repair centers, gas stations, golf courses, movie theaters, resorts, restaurants and tax services, to name a few. Mutual Perks members can also enjoy discounts on EyeMed Vision Care eye examinations and eyewear, along with discounted rates on home mortgages. Best of all, Mutual of Omaha has partnered with businesses all over the country, so you can enjoy discounts at home and when you’re on the road.
Mutual of Omaha’s life insurance products
- Term life: 10-, 15- and 30-year terms, convertible to permanent life, providing coverage up to age 80.
- Universal life: flexible premiums and an accelerated death benefit option to pay medical expenses for a chronic or terminal illness.
- Whole life: death benefit up to $25,000, fixed premiums and no medical exam required.
New York Life: Best term life options
New York Life pulls ahead of the pack with an impressive selection of term life insurance options. The Spouse’s Paid-Up addon allows the spouse of a deceased policyholder to purchase their own term life policy using the death benefit, with no medical examination. The Living Benefits option enables you to use part of your death benefit to pay medical expenses if you become terminally ill and the disability waiver of premium addon pays your premium if you suffer a disability. New York Life’s Policy Purchase option allows you to increase your coverage, without submitting to another medical examination. The provider also offers yearly-renewable term life policies, which gives you the option to convert your coverage to a permanent life policy, and a low premium convertible option that locks your rate for up to 20 years.
New York Life’s portfolio of life insurance products
- Term life: level premium convertible option locks your rate for up to 20 years.
- Universal life: guaranteed death benefit, fluctuating death benefit and return of premium rider options available.
- Variable life: permanent coverage, with add-on options to protect your cash value and waive fees in the event of disability or loss of income.
- Whole life: fixed premium with accidental death, disability waiver and living benefits options.
Pacific Life: Best permanent life options
Ranked #7 in J.D. Power’s 2020 U.S. Life Insurance Study, Pacific Life shines with a fantastic selection of permanent life insurance offerings. Pacific Life’s indexed universal and variable universal life policies feature flexible premiums and guaranteed minimum interest crediting rates. The carrier’s whole life policies feature fixed premiums and its universal life policies feature current interest crediting rates and enable you to adjust your premium.
Pacific Life’s selection of life insurance products
- Indexed universal life: index-based cash value performance, with floor protection to protect your death benefit.
- Term life (not available in New York): 10-, 15-, 20-, 25- and 30-year terms, optional accelerated death benefit and annual, semi-annual, quarterly and monthly premium payment options.
- Universal life: death benefit protection, with flexible coverage and premium options.
- Variable universal life (not available in all states): market-driven cash value investment options, death benefit protection and flexible allocation options.
- Whole life (not available in New York): fixed premiums and guaranteed earnings rates.
MetLife: Best end-of-life benefits
MetLife’s life insurance benefits don’t end with paying a death benefit claim. Its MetLife Advantages program offers funeral planning assistance to help your loved ones find a funeral home and local florist. The program also helps survivors find local support groups and offers them up to five private sessions with a professional grief counselor. Your survivors can also take advantage of MetLife’s Total Control Account, which gives beneficiaries immediate access to death benefit funds, in an interest-bearing checking account. MetLife also extends will preparation services to its policyholders, supported by more than 15,000 attorneys. Benefits may vary by state. Currently, MetLife only offers its life insurance policies through employers.
MetLife life insurance products
- Group universal life: includes a death benefit and savings account, owned by the insured, enabling you to take the coverage with you when you change employers.
- Group variable universal life: owned by the insured, features an option to make additional payments to increase your investment.
- Term life: the dependent term life option allows you to add coverage for an eligible child, partner or spouse, and the supplemental term life option enables you to add more coverage as your needs change.
USAA: Best for military members
USAA only offers membership to U.S. military members, pre-commissioned officers, veterans and their children and spouses, but if you qualify, you will have access to a wide range of financial products. USAA offers numerous insurance products to protect your automobile, boat, home, motorcycle and RV. The provider’s banking services include certificates of deposit, checking and savings accounts, credit cards, home mortgages, personal loans and recreational vehicle loans. Members can also take advantage of USAA’s investment products, which include annuities, education 529 plans, IRAs and mutual funds. USAA also offers members a selection of health coverages, including dental, vision and long-term care insurance.
USAA’s life insurance products
- Term life: 10-, 15-, 20-, 25- and 30-year terms, convertible to permanent life, plus child policies (not available in all states).
- Universal life: flexible premium payments, interest rates up to 2% and tax deferred earnings.
- Whole life: tax-deferred cash value and the option to make payments for the life of the policy, until you turn 65 or for 20 years.
Bestow: Best for millennials
Bestow is changing the way people buy life insurance. Most providers require you to fill out a lengthy application and medical questionnaire, then you must wait days or weeks to find out if you qualify. But Bestow has harnessed the power of technology to qualify applicants in a matter of minutes.
The all-online process requires you to submit your Social Security number and answer questions about your citizenship, hobbies, lifestyle and medical history. Once you submit, Bestow’s algorithm determines your eligibility and lets you know if you’re approved within about 10 minutes. If you qualify, you won’t have to take a medical exam and can purchase a policy online. All Bestow policies are underwritten by North American Company for Life and Health Insurance.
Bestow only sells life insurance to people 21 to 55 years of age, and offers:
- Term life: 10- and 20-year policies, with fixed monthly premiums and coverage up to $1 million.
How to choose the best life insurance company
Finding the best life insurance to fit your needs isn’t difficult, you just need to know how to approach it. Begin by deciding the type and amount of coverage you need. Price is important to most consumers, but also look for a company with sound financial strength and a track record of good customer care. Follow these simple steps and you’re on your way to buying a life insurance policy that fits your needs.
Deciding on the best type of life insurance coverage depends on what you need a policy to accomplish. If you just want to leave a nest egg for your surviving children, a universal life, variable life or whole life policy might meet that objective. But if your policy serves to meet more immediate needs, like replacing your income or paying off a mortgage, a term life policy might provide greater protection. Term life policies often provide more coverage for a lower premium, especially if you take out a policy while you’re still young and healthy.
As when buying any type of insurance, get quotes from several carriers before buying a policy. Besides comparing rates, also consider the options each carrier offers. For example, if you plan to purchase permanent life coverage, consider a policy that offers an accelerated death benefit, just in case you face a lengthy terminal illness. Likewise, if you want term life coverage, consider policies that are convertible and renewable — in case you decide to continue coverage at the end of the term.
Consider financial strength
An insurer’s financial strength is an indicator of how well it can meet its claims obligations. AM Best has produced financial ratings for more than 120 years. Researching financial ratings on the AM Best website requires login, but you can sign up for a free account in a few minutes. AM Best assigns “A++” to “D” ratings to the insurers it analyzes. When considering a life insurance company, look for carriers that have an A or higher AM Best rating.
Consider customer and claims satisfaction
Each year, market research company J.D. Power produces a U.S. Life Insurance Study, which rates and ranks life insurance companies based on overall customer satisfaction. Using a 0- to 1,000-point scale, Power’s 2020 U.S. Life Insurance Study based its results on responses from nearly 5,500 life insurance customers. Among our top 10 companies, eight ranked among the highest in the J.D. Power study. When reviewing the Power survey, consider insurers that rank above the industry average.
What is life insurance?
Life insurance is a financial instrument that covers the life of an individual. When the insured dies, the beneficiary or beneficiaries of the policy receive a death benefit. Oftentimes, beneficiaries use the death benefit to pay the deceased’s final expenses or to pay off debts or a home mortgage. A young widow or widower may also use the death benefit to replace lost income or pay their children’s educational costs.
Auto and home policies cover types of personal property. Usually, car owners and homeowners must purchase personal insurance for their dwellings and vehicles. However, some companies offer group life insurance to their employees as part of a benefits package. If you have a group life insurance policy that doesn’t provide the level of coverage you need, you can also purchase an individual policy directly from an insurer.
What does life insurance cover?
Many life insurance policies only cover one individual’s life (though multiple beneficiaries may be assigned). However, some providers offer policies that can cover more than one person. For instance, State Farm’s joint universal life insurance product can cover a couple or business partners. When the first insured person dies, the surviving partner receives the death benefit. Some insurers, including Globe Life, also offer family life insurance plans, covering the adults with individual life insurance policies and the dependent kids with riders to their parents’ policies.
How much life insurance do I need?
Choosing the right amount of life insurance coverage will depend on your needs. If your loved ones depend on your income, you’ll need sufficient coverage to replace your income for a year or more after you die. Financially secure folks may only need enough life insurance to cover their final expenses, like funeral and burial costs. Working professionals may need enough coverage to pay off a mortgage or to pay the educational expenses of surviving children.
Coverage offers a guide to life insurance to help you determine the type of policy you need and the level of coverage that suits your needs. Some insurers, including AIG Direct, also provide life insurance calculators on their websites, which guide you through a series of questions to determine the level of coverage that meets your needs.
How much does life insurance cost?
Life insurance companies often advertise low rates, which may not accurately reflect your personal variables that affect your rate. For instance, you may see an ad claiming that a 40-year-old male can purchase a $250,000 term life policy for under $14 per month. In reality, life insurance premiums are based on several factors, including, your age, family’s health history, gender, hobbies, occupation, personal health history and tobacco use, as well as the type of policy and level of coverage you need. For the most accurate premium estimate, request quotes from several life insurance carriers.
Life insurance policy options
Life insurance policies fit into two categories, term and permanent. Both types of policies pay a death benefit when the insured dies. However, the two categories of policies work differently. Permanent life insurance covers you throughout your lifetime, while term life doesn’t. Term life insurance covers you for a fixed period and doesn’t build a cash value, while permanent life insurance has a saving component that enables you to grow your investment.
Term life insurance
Term life insurance covers you for a specific period, usually five to 30 years. For example, you may decide to purchase a 10-year, $100,000 term life policy. Level term policies are the most popular because they pay a fixed death benefit throughout the term. Some term policies are renewable, allowing you to extend coverage for another term. Typically, term life policies don’t return any of your premium payments at the end of the term. Policies that feature “return of premium” are available with some providers but cost significantly more. Most term life policies require a medical examination and only provide coverage up to a certain age, usually around 80. Term policies only pay the death benefit if the insured dies during the term, but typically feature the most affordable rates.
Whole life insurance
Whole life insurance is a traditional type of permanent coverage that covers you until you die, regardless of age. Unlike term life insurance, whole life builds a tax-deferred cash value over time, which you can borrow against. Whole life policies feature a fixed death benefit, which only pays when the insured dies. While whole life policies continue to provide coverage regardless of your age, they usually cost more than term life insurance. Whole life is the grandfather of permanent life insurance, but a few more modern types offer more investment flexibility.
- Universal life – This type of policy builds a cash value based on a money market rate of interest. Universal life policies enable you to change your premium payments, after accumulating a cash value, and some allow you to increase the death benefit, but only after passing a medical examination.
- Variable life – With variable life insurance, you can grow the cash value of your policy by investing in bonds, money market mutual funds and stocks. However, if your investments perform poorly, your policy’s cash value and death benefit can decline.
- Variable universal life – This type of insurance enables you to grow the cash value of your policy by investing in bonds, money market mutual funds and stocks, while also allowing you to adjust your coverage level and premium payment.
- Indexed universal life – With an indexed universal life policy, the savings vehicle is linked to a market index, like the S&P 500, and features an interest rate guarantee.
Guaranteed issue life insurance
Guaranteed issue life insurance is for folks 50 to 80 years old and designed to cover final expenses such as funeral and burial costs. This type of policy offers guaranteed acceptance, with no medical examination, and provides $5,000 to $25,000 in coverage. Guaranteed issue policies earn a cash value and fixed premium, and provide lifetime coverage.
How we chose the best life insurance companies
To find our top 10 life insurance companies, Coverage searched for carriers that offer the most common types of coverage. Since customer satisfaction is a major consideration for all consumers, we turned to the most recent J.D. Power U.S. Life Insurance Study to find out how well insurers performed in areas such as policy offerings, claims handling, customer care and price. We also considered the special needs of military members and the demands of busy young professionals, who prefer to conduct most business online. And we selected insurers with good financial ratings.
All life insurance policies include a death benefit, and some feature a savings account.
- Term life policies cover you for a specified period, while permanent life policies provide lifetime coverage.
- Some permanent life insurance policies enable you to choose the way you want to invest your earnings.
- Term life insurance offers the most economical coverage, but it doesn’t provide lifetime protection.
- Price is important but choosing an insurer with a good financial rating and customer service track record is essential.
Life insurance is one of the best ways to ensure that your family can continue on sound financial footing without you. Choosing the right life insurance policy begins with deciding how much coverage you need, how long you need coverage and what you want the coverage to achieve. While term life policies provide economical coverage, permanent life policies give you more bang for your buck because of their cash value component. Sources such as AM Best and J.D. Power provide invaluable analysis to help you decide which life insurance company is right for you.