Life insurance is an important financial product that can 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 trusted life insurance companies to help you quickly and easily find the best policy to suit your needs.
Best Life Insurance Companies 2020
- Haven Life Insurance
- Ladder Life Insurance
- Bestow Life Insurance
- Fabric Life Insurance
- Ethos Life Insurance
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. 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.
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 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 your monthly premiums will be lower. For most people, term life insurance does provide exactly what you need: affordable monthly payments in return for a death benefit.
If you decide to go the term life insurance route, you’ll next need to 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 costs 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.
FinanceBuzz ranking criteria include:
- NAIC complaint index score: This score measures total complaints to state regulators relative to total policies issued
- AM Best score: AM Best is an independent credit rating company that measures the financial strength of insurance companies. AM Best calculates assigns scores to companies based on creditworthiness and ability to pay customer claims and other debts in a timely fashion
- 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, each 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 life, whole coverage is the best choice. However, whole life coverage is typically much more expensive and may be cost-prohibitive for many.
How do I find the best life insurance?
Once you’ve decided what you need, finding the best life insurance involves shopping around a bit. Get quotes from various insurance companies — you can do this online easily and quickly — so you can compare and decide. You can start by getting quotes from the life insurance companies that have made our list.
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.