| Average Life Insurance Cost Per Month ($250,000, 30-year term policy) | |||
|---|---|---|---|
| Company | 25 years old (average) | 40 years old (average) | 55 years old (average) |
| Nationwide | $20.89 | $28.88 | $99.97 |
| MassMutual | $18.15 | $29.58 | $122.46 |
| Protective | $16.06 | $25.66 | $107.12 |
| Banner | $16.07 | $25.71 | $107.91 |
| Mutual of Omaha | $19.68 | $31.39 | $137.39 |
| Guardian | $19.53 | $31.65 | $110.49 |
| USAA | $20.82 | $30.09 | N/A |
| Lincoln Financial | $17.25 | $26.36 | $114.05 |
| Penn Mutual | $16.78 | $26.48 | $110.38 |
| Transamerica | $16.99 | $35.70 | $128.68 |
*Life insurance quotes above are examples only and were collected for 30-year $250,000 term life insurance policies for non-smoking males and females ages 25, 40, and 55 in excellent health.
Life Insurance News
Bestow, Sproutt, and Haven Life bow out: Several newer companies that focused on using technology to simplify the life insurance buying process are leaving or have left the consumer market. Bestow Life Insurance Company is being bought by Sammons Financial Group, pending a regulatory hearing in Iowa that was scheduled for May 28, 2024, according to trade publication Coverager. Going forward, Bestow will concentrate on providing a technology platform to life insurance and annuities companies.
It’s the latest in a batch of insurance startups to face headwinds with the consumer life insurance market. Israeli startup Sproutt declared insolvency on May 8. In 2023, the company, which was founded in 2017, shifted its focus to offering agents a quoting platform.
And as of Jan. 12, 2024, you can no longer buy a new policy from Haven. The company’s parent, MassMutual, has always issued and managed Haven’s policies, and that will continue once the Haven brand is discontinued this year.
Many Americans don’t think they have enough life insurance: 42% of Americans say they need life insurance or they need more coverage, according to the 2024 Insurance Barometer Study by LIMRA, which stands for the Life Insurance Marketing and Research Association. The top reason cited for not having enough coverage was cost, but 78% of respondents overestimated the cost of basic term coverage. The largest groups saying they don’t have enough coverage include Gen Z and Millenials, women, and Black and Hispanic people.
Why You Should Trust Our Expert Insurance Reviewers
Investopedia collected data points related to dozens of criteria that are important when choosing life insurance, across 91 companies. We used this data to review each company for financial stability, customer satisfaction, coverage options, cost, and other features to provide unbiased, comprehensive reviews that can help you make the right decision.
Investopedia launched in 1999, and has been helping readers find the best life insurance companies since 2020. We are dedicated to helping you find the right life insurance provider for your needs.
Frequently Asked Questions
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Life insurance is a contract in which you agree to make payments to the insurance company while you are alive. In return the insurance company guarantees it will pay a sum of money to your beneficiaries when you die.
Term life insurance only lasts for a certain amount of time—for example, 20 years. If you don’t die during that time, your beneficiaries get nothing.
Permanent life insurance, such as whole life or universal life, lasts your whole life—but the premiums are much higher than for term life. Permanent life insurance also has a cash value component, which is kind of like a savings account that you can withdraw from or take loans against while you’re alive.
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Life insurance covers death from natural causes, illness, accidents, suicide, and homicide if you pass away while the policy is in force. The money is paid out tax-free, and beneficiaries can use it for whatever purpose they choose.
Insurers may deny a claim in certain circumstances—for instance, if a beneficiary is involved in the homicide of the insured. They also often exclude coverage for death by suicide if it happens within a certain period, such within the first two years of a policy. Some providers deny claims for deaths caused by risky activities such as skydiving as well.
Finally, beneficiaries may not get a payout if you lie or omit information on your application, or if you don’t keep up with payments for the policy.
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All of the companies in our list of the best life insurance companies have strong reputations. Nationwide, our number one pick, has been around for nearly 100 years, has an excellent financial strength rating from AM Best, and few customer complaints. MassMutual has an even better AM Best rating (Superior) and has paid dividends every year since 1869. State Farm also stands out because it consistently tops J.D. Power consumer satisfaction surveys.
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Not everyone needs life insurance. If you have enough money to pay for your final expenses and you don’t have dependents, you don’t really need it.
But certain other groups of people can benefit from having life insurance. If you have a spouse or children, you may want life insurance so that they can continue to have the same quality of life once they no longer have your income stream. You may want it to ensure your children have money for college, too.
Homeowners should have enough insurance to pay off the mortgage. And business owners are advised to get life insurance to clear business debts and help any remaining owners ensure business continuity.
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The main downside of life insurance is the cost. Your policy will charge you monthly premiums, which are another expense for your budget. The price depends on your age, health, lifestyle, and the amount of coverage you buy. If you stop paying, you lose your coverage.
Another downside of life insurance is that you might pay these costs without getting anything back. Temporary term life insurance policies have a set expiration date. If you live past the expiration date, your coverage ends. In other words, you’ve paid for life insurance without getting any payout for your heirs. Finally, you must qualify to buy life insurance. You will owe a larger premium if you have health issues or risky hobbies. If the insurance company decides these risks are too high, you might be denied the chance to buy a policy.
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Life insurance costs are largely influenced by the type of coverage you get, and your age and health when you buy the policy. You can get a more affordable life insurance policy if you choose term life insurance over permanent. You’ll only get coverage for a set amount of years, but that may be all you need. Buy the policy as soon as you need it instead of waiting, because rates are better for younger applicants. If you’re healthy, you’re better off getting a policy that requires a life insurance medical exam, as those policies offer better rates for healthy applicants. And finally, skip add-on benefits known as riders that you don’t need.
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If you outlive your term life insurance policy, your coverage ends. Term life insurance is temporary life insurance. It only lasts a set period, such as five or 20 years. If you live past this point, you lose your coverage. However, you may have some options to stay covered past the end of the term.
First, some insurers allow you to renew and extend your term life insurance without a medical exam. The price will be higher when you renew than when you first bought the term life insurance because you will be older. You may also be able to convert your temporary term life insurance into a permanent policy with no expiration date. Finally, you could try applying for a brand-new policy. If you don’t use one of these three options, you will no longer have life insurance after outliving your term policy.
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We researched and reviewed 91 companies to find the best 12 companies you see above on this list. Below are the companies we researched, along with links to individual company reviews to help you learn more before making a decision. Those that didn’t make our list may have had fewer policy types and features, worse financial stability ratings, lower customer experience ratings, fewer riders and living benefits, or higher rates.
AAA Life Insurance, AARP Life Insurance, Aflac Life Insurance, AIG Life Insurance, Allianz Life Insurance, Allstate Life Insurance, American Amicable Life Insurance, American Fidelity Life Insurance, American Heritage Life Insurance, American Income Life Insurance, American National Life Insurance,Americo Life Insurance, Ameritas Life Insurance, Assurity Life Insurance, Bankers Life Insurance, Banner Life Insurance, Bestow Life Insurance, Boston Mutual Life Insurance, Brighthouse Life Insurance, Cincinnati Life Insurance, TruStage Life Insurance, Colonial Life Insurance, Colonial Penn Life Insurance, Columbian Financial Group Life Insurance, Columbus Life Insurance, Combined Life Insurance, Companion Life Insurance, Equitable Life Insurance, Erie Life Insurance, Ethos Life Insurance, Farm Bureau Life Insurance, Farmers Life Insurance, Fidelity Life Insurance, Foresters Life Insurance, Forethought Life Insurance, Freedom Life Insurance, Gerber Life Insurance, Globe Life Insurance, Guardian Life Insurance, Haven Life Insurance, John Hancock Life Insurance, Kansas City Life Insurance, Kemper Life Insurance, Ladder Life Insurance, Lafayette Life Insurance, Liberty National Life Insurance, Lincoln Financial Life Insurance, Lincoln Heritage Life Insurance, Lumico Life Insurance, ManhattanLife Insurance, MassMutual Life Insurance, MetLife Insurance, Midland National Life Insurance, Minnesota Life Insurance, Mutual of Omaha Life Insurance, National Life Insurance, Nationwide Life Insurance, New Era Life Insurance, New York Life Insurance, North American Life Insurance, Northwestern Mutual Life Insurance, Ohio National Life Insurance, Pacific Life Insurance, Pan American Life Insurance, Penn Mutual Life Insurance, Physicians Mutual Life Insurance, Primerica Life Insurance, Principal Life Insurance, Protective Life Insurance, Prudential Life Insurance, Reliance Standard Life Insurance, Sagicor Life Insurance, SBLI Life Insurance, Securian Life Insurance, Senior Life Insurance, Southern Farm Bureau Life Insurance, The Standard Life Insurance, State Farm Life Insurance, Sun Life Insurance, Symetra Life Insurance, Texas Life Insurance, The Hartford Life Insurance, Thrivent Life Insurance, Transamerica Life Insurance, United Life Insurance, Unum Life Insurance, USAA Life Insurance, Voya Life Insurance, Western & Southern Life Insurance, West Coast Life Insurance
How We Chose the Best Life Insurance Companies
In order to compile our list of the best life insurance companies, we developed a comprehensive life insurance methodology. We started off by researching what consumers want from life insurance companies, and for that, we looked to third-party consumer studies, including J.D. Power’s 2022 Individual Life Insurance and Annuities studies and the 2022 Insurance Barometer Study, by Life Happens and LIMRA.
With those findings in mind, we spent three months digging up information about more than 55 features on 91 life insurance companies, including ratings for financial strength by AM Best, customer satisfaction, and individual customer complaints reported to insurance state commissioners and recorded by the NAIC (National Association of Insurance Commissioners). We also considered years in business, cost, online tools, no-medical-exam options, policy types and features, and available riders.
NAIC Methodology: We considered each company’s NAIC complaint index for its life insurance business by averaging those NAIC complaint index values over the three years (2021, 2020, and 2019).
Our review process gave preference to companies with superior financial stability, few customer complaints, and a robust suite of products and resources. In particular, we valued online quoting and application tools, transparent pricing, and no-exam policy options. Companies received ratings boosts if customer service was accessible via features like live chat. We ranked each company according to the following categories and weights:
- Policy types and features: 21%
- Financial stability: 17%
- Application process: 16%
- Customer satisfaction ratings: 15%
- Customer service: 14%
- Riders and living benefits: 9%
- Cost: 8%
Costs were evaluated by collecting term life insurance quotes for 25-, 40-, and 55-year-old male and female non-smokers in excellent health for 30-year $250,000 term life policies. We used Compulife data available through Term4sale.com.
We compared individual offerings between companies by delving deeper into product specifics, including maximum coverage amounts, maximum issue ages, included riders (in particular, the number and type of living benefits available at no upfront cost) , and product-specific application processes. We used this research to determine the best companies for different products, consumer groups, and use cases.
Of the companies we considered, those with the greatest financial stability, fewest complaints, lowest cost, most generous benefits, easiest application process, most generous no-medical-exam options, and widest available features scored the highest across categories.
Guide to Life Insurance