Life insurance is an important financial product that can cover your final expenses, protect your loved ones, and provide a safety net for their future. But what are the best life insurance companies and how do you decide which policy is right for you?
We’ve pulled together this list of top life insurance companies to help you quickly and easily find the best coverage options to suit your needs.
Best life insurance companies of 2020
- Haven life insurance
- Ladder life insurance
- Bestow life insurance
- Fabric life insurance
- Ethos life insurance
Haven helps consumers apply for up to $3 million in term life insurance coverage quickly and easily. They offer a simple online application process, and applicants who meet certain criteria may be able to get life insurance coverage without a medical exam. Haven's term life policies are issued by Massachusetts Mutual Life Insurance (MassMutual), which has been in business for over 160 years and has an A++ AM Best rating. Haven offers an accelerated death benefit with its policies, which sets it apart from competitors. This benefit allows you to use your life insurance coverage to cover medical expenses if you're diagnosed with a terminal illness and have a life expectancy of two years or less.
If you're looking for flexible life insurance coverage, Ladder may fit your needs nicely. Consumers can apply for up to $8 million in term life coverage through Ladder, and the company issues its policies through Fidelity Security Life Insurance Co. and Allianz Life Insurance Company of New York, which has an A+ AM Best rating. What makes Ladder unique is that offers policyholders the opportunity to increase or decrease coverage over time based on their financial situation and needs.
Bestow allows consumers to apply for up to $1 million in term life insurance coverage without a medical exam. The application process takes minutes, and premiums can be as low as $8. Bestow partners with the North American Company for Life and Health Insurance® to issue its policies. North American has an A+ rating from A.M. Best and has been a reliable insurance provider for over 130 years. The fact that Bestow offers a simple application process and the option to get coverage without a medical exam sets this insurer apart from its competitors.
Fabric offers term life insurance and accidental death policies from an A+ AM Best rated insurance provider. Fabric's policies are backed by Vantis Life, which has been offering life insurance coverage to consumers since its founding in 1942. Unlike other insurers, in addition to its insurance policies, Fabric also offers an app to help you manage your finances and a free service for creating a last will and testament.
Ethos life insurance
Ethos allows consumers to enter some basic information online and receive quick quotes for up to $1.5 million in term life insurance coverage. Ethos term life policies are issued by Legal General America, and they're reinsured by Munich Re and Assurity Life Insurance. Both companies have A+ AM Best ratings and have been in business since the 19th century. Ethos policies come with an accelerated death benefit and a 30-day money-back guarantee. During that period, you can opt to cancel your policy and get a refund.
What makes these the best life insurance companies
The companies listed above are only a few of the trusted insurers out there. However, they each serve as a great starting point for you to begin your life insurance policy search.
Each of these companies offers a simple, online application process. Most will take you only a few minutes to complete and, depending on your individual situation, you could be on your way to life insurance coverage that same day.
They are online insurers, which means you are able to apply for coverage, submit any required documentation, and finalize your policy without ever leaving home. Rather than making an appointment with an insurance agent or scheduling a call, you can buy life insurance when it works for you.
Lastly, we believe that these are some of the best life insurance companies around when it comes to buying affordable term life coverage. Insurance policies are available in a variety of term lengths and coverage amounts, and if you’re approved for a policy, you may be able to get life insurance coverage for just a few dollars a month.
How to choose the best life insurance coverage
No two circumstances are identical, so the type of life insurance coverage that’s right for you — and the best life insurance companies to buy that coverage from — might not be the same for your brother, best friend, or neighbor. Before deciding on a new policy, there are a few important things to consider first.
What type of life insurance do I need?
Take a good look at your own unique situation when determining the type of policy that best serves your needs. This includes:
- Your loved ones’ needs: What is required to care for your spouse, children, aging parents, siblings with long-term needs, etc.? Also think about how long you expect your life insurance beneficiaries to need financial support and how much is required annually.
- Any existing assets: Do you already have significant retirement savings built up? If so, you may decide that you only need life insurance for a few years, to cover the remainder of your earning years.
- Life insurance cost: What does the life insurance coverage cost? Keep in mind that permanent life insurance policies will likely come with higher premiums than term life insurance policies.
The type of life insurance you choose also depends on your income (what you can afford), your health (your approval odds and premiums), and your lifestyle/hobbies (whether you’ll be approved for the coverage you want).
Types of life insurance
- Term life insurance
- Whole life insurance
- Universal life insurance
You might find yourself debating term vs whole life insurance. Whole and universal life are types of permanent life insurance, meaning they don't expire as long as you pay your premiums — which can be expensive. With term insurance, your policy expires at the end of a term (ex. 30-year term), but you'll typically see lower premium payments. For most people, term life insurance policies provide exactly what you need: affordable monthly payments in return for a death benefit payout.
If you decide to go the term life insurance route, you’ll need to review your policy options, and decide how long you want coverage for and which life insurance riders — if any — are important to you. Many of the best life insurance companies offer a range of term lengths, coverage limits, and optional riders for added protection.
How much life insurance do I need?
Next, you’ll want to determine exactly how much life insurance coverage you need. Calculating this amount involves looking at the following factors:
- Your income: One quick way is to simply multiply your current earnings by the number of years you’d want to replace that income for your family (10 or 15 is common). Be sure to also consider sources of hidden income, such as health insurance benefits provided by your workplace.
- Your debt burden: Whether you have a mortgage, student loans, credit card debt, or owe on personal loans, be sure to account for this in your life insurance calculations.
- Future expenses: You may want to consider any significant future expenses when calculating your life insurance coverage. These could include college tuition for your children, charitable donations, and money for your kids’ weddings or a down payment on their first home.
It’s important to note that different life insurance companies will offer different levels of coverage. For instance, some insurers offer policies up to $300,000; others can provide you with millions in coverage.
If you’re going to pay premiums on your coverage each month for years, it’s important that your life insurance is worth the cost and is something you can afford.
To find the perfect coverage at the perfect price, you should spend some time shopping around. The companies listed above offer a simple process for obtaining quotes, which makes it easy to compare life insurance plans and quickly. And in many cases, it may only take a few minutes to get a quote and apply for coverage. The process is likely simpler than you think.
The companies we chose for our best life insurance companies list are among the top online insurers in the country, based on our competitive analysis and an analysis of current partners. We did not evaluate all companies in the category. For the purposes of this piece, we did not review traditional life insurers.
FinanceBuzz ranking criteria include:
- NAIC complaint index score: This score is correlated with customer satisfaction. It measures total complaints to state regulators relative to total policies issued.
- AM Best rating: AM Best is an independent credit rating company that measures the financial stability of insurance companies. AM Best calculates financial strength ratings for companies based on creditworthiness and ability to pay customer claims and other debts in a timely fashion. Four of five companies on our list received an A+ rating or higher from AM Best.
- Pricing: The cost to obtain an insurance policy with a specific provider
- Ease of use: How simple the process is and how long it takes to apply
- Total coverage: How much coverage a particular provider offers
Life insurance FAQs
What is the best life insurance policy?
The best life insurance policy for you may not be the same one that’s best for someone else. You first need to look at your own needs and personal factors before you can choose the type of policy, term length, and coverage limit that suits your needs. Only then can you decide on your best life insurance company and policy.
Which is better, whole or term life insurance?
When it comes to term vs. whole life insurance policies, each coverage option serves its own purpose. If you need more affordable coverage for a specific period of time, term life insurance is best. If you are looking for a policy that grows a cash value and stays with you for your entire life, whole coverage is the best choice. However, whole life policies are typically much more expensive and may be cost-prohibitive for many. If you have questions about which life insurance products are right for you, consider reaching out to a financial advisor for assistance.
How do I find the best life insurance?
Once you’ve decided what you need, finding the best life insurance rates involves shopping around a bit. Compare life insurance quotes from various companies — you can do this online easily and quickly — so you can decide on the best policy. You can start by getting quotes from the life insurance companies that have made our list. If you feel as though whole life or universal life insurance coverage would suit your needs better, you can choose to compare life insurance options from traditional insurers like Northwestern Mutual, State Farm, New York Life, John Hancock, Mutual of Omaha, Nationwide, Transamerica, or Prudential.
At what age should you buy life insurance?
There is no specific age when you should buy life insurance. Instead, you should purchase coverage when you need it, whether that’s age 25 or 45. As soon as you get married, buy a home, or have children, life insurance should be on your radar. And just keep in mind that the longer you wait to buy, the more expensive your premiums are likely to be.
Stephanie Colestock also contributed to this piece.