Compare the Best Life Insurance Companies in 2021

Looking to lower your life insurance payment?

COMPARE INSURANCE PROVIDERS BELOW

Find the Best Life Insurance Companies in 2020

As the saying goes, two things in life are certain: death and taxes. When you’re young and healthy, planning for the end of your life is usually the least of your concerns.

But life insurance is a necessary part of estate planning that can protect your loved ones when they need it the most. You might get offers for accidental death and dismemberment insurance through offers in the mail for pennies on the dollar, but these aren’t the policies that give your family the coverage it needs.

Here’s a guide to finding the best life insurance companies for you in 2020.

Choosing a Life Insurance Policy

Choosing a life insurance policy is just like buying any other financial product. Once you understand the jargon and determine your family goals, it’s much easier to decide which policy makes sense for you. Here are the most common types of life insurance policies available.

Term Life Insurance

One of the most affordable life insurance options is term life insurance. Term life insurance pays a death benefit only for a certain period. For example, if you get a 20-year term policy, the life insurance company pays out if you die within the 20 years the insurance is in effect. Many policies auto-renew at the end of the term, but it isn’t guaranteed.

Check with your insurance company to find out what happens when your term life insurance ends. If it doesn’t renew automatically, your family could lose benefits if you were to die just months outside of a policy lapse.

Whole Life or Permanent Life Insurance

As the name implies, whole life insurance gives you coverage until death even if you live to be 100. Because insurance companies have no way of predicting how long you’ll be covered, the premium is much higher for this type of policy.

Your premium payment stays the same throughout the length of the policy, but because life insurance costs more for older adults, companies charge a higher cost upfront to balance out the risk. If they waited and increased the insurance premium by $1,000 each year, it would make life insurance too expensive for the average person to afford later in life.

The amount you pay early in life is more than what’s needed to cover the cost of a claim. To split the difference, insurance companies invest the ‘overage’ amount. There are secondary benefits to whole life policies like the ability to borrow money from the amount invested for certain emergencies.
The three subcategories of whole life or permanent life insurance are universal, variable, and traditional.

Our Picks

No two life insurance companies are alike. Beyond offering products under the same name, how each company approaches coverage amounts and death benefit payouts couldn’t be more different.

Take care to choose a company that fits your family’s specific financial and lifestyle needs. Here are some life insurance companies to choose from in 2020.

MassMutual

MassMutual has more than 170 years of experience in the life insurance game so you can rest assured that they’ve got solid policies and procedures in place to provide you with the best coverage options.

MassMutual offers whole life, term life, universal life, and variable life insurance. You can also apply for additional protection plans like long term care to offset healthcare costs later in life.

MassMutual has a long history, but their company culture is very modern. The website is user friendly with simple, easy to understand policy terms.
If you want to signup for coverage, there’s an instant approval process for term life insurance online. Some policies even let you skip a medical exam, but you have to be young and healthy to qualify.

Bestow

Looking for a policy that lets you skip needles and the sight of your blood? Bestow is one of the few life insurance companies that doesn’t require a medical exam to qualify.

Keep in mind that there will be trade-offs if you skip your exam. For one, policies are higher if you decide to forgo your appointment with the company’s medical team.

Bestow uses a proprietary computer algorithm to estimate how healthy you are based on your age and lifestyle. Depending on your age, not getting an exam can work in your favor.

Because exams aren’t mandatory, you can get instant coverage. This can save you weeks of waiting for underwriting to approve your application and send a formal approval in the mail.

Bestow’s life insurance application process is entirely online, but if you need help or have questions, you can reach an insurance agent by phone, chat, or email. This business model appeals to younger generations who don’t want to fuss over getting life insurance.

But if you want the cheapest rates possible, look elsewhere. This ultra-modern convenience comes at a cost for many borrowers whose health is underestimated by the algorithm.

Another drawback is that the company only offers term life insurance. You have the option of short term life insurance that lasts just 2 years or longer-term life insurance.

The longer-term life insurance options are 10 or 20 years. That’s pretty short especially if you’re young and in good health. If you change your mind about the policy and prefer something more robust, Bestow will grant you a full refund within 30 days of opening an account.

Ladder

Ladder is another online-only life insurance company that lets you skip your medical exam. Like Bestow, the company only offers term life insurance policies but at a slightly longer length.

You can apply for coverage for up to a 30-year term policy. One major benefit of applying for benefits through Ladder is option for flexible payments.

If your family needs change, you can increase your coverage amount without the hassle of starting the application process again. With most insurance companies, these life-changing events allow you to increase your coverage amount but you can’t decrease it.

Ladder allows you to decrease your policy at no additional cost to you. This is helpful because most policies account for life changes like getting married or having a baby, but ignore less favorable life changes like getting divorced.
You pay one flat rate for insurance with Ladder’s Price Lock Guarantee for the full length of your term. There’s no medical exam for most policies but there are limits.

If you smoke, you might need to submit a ‘spit kit’ before the company will offer you a policy. If this is required, it’s still a no-contact process. You receive the kit in the mail, follow the instructions within the privacy of your own home, and mail it back with postage already paid.

There’s a live chat available if you have questions during the application process. There’s a 30-day money-back guarantee similar to Bestow that grants you a refund if you change your mind.

Pacific Life

If you feel more at ease with an established life insurance company, Pacific Life is one of the oldest around. Founded 150 years ago, Pacific Life offers a wide range of insurance and retirement products to help you manage your estate.

Their life insurance products range from permanent to term with a few trendy options in between.

Here’s a listing of Pacific Life insurance products:

Term Life
Whole Life
Universal Life
Indexed Universal Life
Variable Universal Life
Long-Term Care Benefits Add-On

Pacific Life is an older company with a modern application process. You can apply online and get your policy by email. You have access to tools online that let you update your policy if you have major life changes.
The only downside of Pacific Life comes if you have preexisting illnesses. The premium rates might be on the high side if you have a lengthy medical history.

Northwestern Mutual

Northwestern Mutual Life Insurance has a long-standing reputation for customer satisfaction. The company has paid dividends on whole life insurance policies for decades without fail.

Customers can choose whether to receive dividends as cash or use it to pay premiums or upgrade coverage. Northwestern Mutual has fairly flexible payment options on its policies.

Want to pay for coverage until a certain age or for a fixed number of years? Northwestern Mutual gives you control over how your policy is set up so you get life insurance coverage that makes sense for you.

The company offers a rider called accelerated care benefit which means receiving a portion of your death benefit early if you’re diagnosed with a terminal illness. This is a rare option for life insurance companies who typically only pay out after death.

The minimum coverage amount for a Northwestern Mutual policy is $25,000. Northwestern Mutual requires all applicants to go through the full underwriting process which means no getting policies through email or without a medical exam.

But if you’re looking for the best investment/death benefit combination, Northwestern Mutual offers the best insurance options with a strong reputation to match.

State Farm Life

Most people have heard of State Farm for their auto and home insurance policies, but the company also offers a range of life insurance products.

You can apply for term, whole life and universal life through State Farm. Term Life Insurance products range from 10 to 30 years. These policies are renewable up until age 95 if you qualify.

If you’re between the ages of 16 and 45, you can apply to get instant life insurance coverage as long as you’re in good health. The instant policy doesn’t require a medical exam.

The minimum coverage amount with State Farm is $100,00 for term policies if you’re over 45. Instant life insurance policies start at $50,000 and last until you turn 50 or until 10 years after the policy is issued, whichever comes later.

Keep in mind that instant life insurance applications do include a health questionnaire. These questions could disqualify you if you have existing health conditions.

If you pay your premiums on time but outlive your term, you get the Return of Premium benefit which means getting all of your payments back. This is a great option for anyone that hates the idea of paying for a policy they may never need.

But this option comes at a higher cost than standard term life insurance coverage and there are other twists and turns to navigate in this policy option. Be sure to read the fine print before pursuing the Return of Premium policy with State Farm.

BrightHouse Financial

You might know BrightHouse Financial from its previous name–MetLife. While BrightHouse Financial has only been in existence since 2017, MetLife is a veteran life insurance company with experience in products ranging from employee benefits to business insurance.

BrightHouse Financial was created to sell life insurance products to individuals. Now both companies are split and the newer, improved company is one of the largest life insurance providers in the United States.
You can apply for both short and long term life insurance policies through BrightHouse Financial. But don’t come here if you’re looking for small coverage amounts.

The lowest life insurance coverage amount is $1 million on both term and permanent life insurance.

Choosing a Life Insurance Provider

Life insurance companies come with most of the same basic products on the surface. But, just like with anything valuable, the devil is in the details.
Once you begin reviewing the details of how policies are paid out and comparing premium amounts, you realize many life insurance plans are like comparing apples to oranges. The best way forward is to set your own goals before getting lost in the promotional offers of dozens of life insurance companies.

Consider calling the top life insurance companies and giving them your wish list so they can recommend specific plans and riders based on your needs. Remember, life insurance isn’t a contract.

If you get a policy and realize later that it doesn’t fit your needs, you can always cancel and switch to a policy that’s a better fit. For more information and insurance tips, check our blog for updates.

Frequently Asked Questions

Life insurance is a type of investment that you can use to provide your surviving loved ones with an income or a lump sum after your death. It’s part of a broader end-of-life and estate planning package that has real value to some people but not so much for others.

One of the most common questions people have is in the real difference between term vs whole life insurance. On the surface, it’s simple: term life insurance expires and whole life insurance doesn’t. Practically speaking, however, they have different uses and cater to different people.

So what is the difference, and how much is life insurance worth it in the first place? Here’s what you need to know.

What is Term Life Insurance?

A term life insurance policy is a form of insurance that provides a death benefit only if a claim is made while the policy term is still active, which may be 5, 10, 15 or 20 years.

Once the term expires, it will no longer pay out a death benefit. If you want to continue your coverage you either need to renew it or convert your policy into whole life insurance.

What Is Whole Life Insurance?

Whole life insurance is often referred to as a permanent policy. Unlike a term policy (a policy with a fixed expiry date), your whole life insurance continues to cover you as long as you remain up-to-date with the premiums.

When Should You Choose Term vs Whole Life Insurance?

You might read the differences between term vs whole life insurance and ask why you might want a policy that doesn’t cover your whole life.

However, term and whole life insurance policies do cater to different people.

People who benefit from term life insurance are those who are young but who don’t necessarily want to go uncovered. Term life insurance is less expensive, and you can match it to meet your needs. For example, if you’re worried about leaving your loved ones behind to face private student loans or a mortgage, you can take out a term life policy that covers those bills (both in terms of the benefit and the term).

Whole life insurance is more expensive, but it does provide you with coverage both today and years or decades down the line. When you have lifetime coverage, your beneficiary will receive a death benefit (as long as your policy is valid). They can use it as an income replacement, to cover final expenses, or however else they see fit.

Some people also use whole life insurance to build equity because once you build up enough cash value in your policy, you can borrow from it. Though, if you don’t pay it back then your death benefit will be smaller. Some insurers also provide benefits like dividends, which rewards you for investing with them.

So while whole life policies are more expensive, they do come with benefits for estate planning that do make them attractive.

Is Life Insurance Worth It?

Life insurance offers a fairly straightforward promise: it benefits people who will leave behind survivors (partners, spouses, children, other dependents) and who want to ensure that they have some cash – at least for a while.

The policy is beneficial for many people, particularly if you have any long-standing debt that could make life difficult for your survivors.

However, life insurance is usually not worth the premiums if you:

Don’t have any debts
Don’t have any dependent beneficiaries
Don’t earn enough to put money into your policy

The trick with whole life insurance, in particular, is that you get out of it in cash value what you put into it. You don’t pay a monthly premium and automatically get the whole death benefit. You only have access to the full benefit if you pay in over a significant period of time.

What is the Best Life Insurance?

Finding the best life insurance and the best life insurance company means first taking a full assessment of your current finances (including debts and assets) and where you want to be in 10 or 20 years.

Your best bet is to shop around for life insurance quotes that not only cover your core interests but also provide affordable premium payments in the meantime.

Unfortunately, there is a catch: buying life insurance when you’re young and healthy means you pay far less in premiums (in terms of the monthly payment). However, there’s less need for this kind of policy when you’re younger.

What Type of Life Insurance Policy Will You Choose?

Like any investment, a life insurance policy works best when it works for you. Whether you choose between term vs whole life insurance or no life insurance at all depends on your age, your dependents, and your finances.

That’s why it’s important to know what kind of life insurance coverage you need before you sign on the dotted line. Otherwise, you’ve added a new monthly bill that doesn’t even work for you!

Are you looking for more ways to save? We can help you find a life insurance policy that suits your needs and your budget.

Is Life Insurance Taxable?

One common question surrounding life insurance death benefits is whether they’re subject to income or estate tax. After all, very few things fall outside the IRS’s reach.

The answer is that generally speaking, the beneficiary won’t need to declare the death benefit as taxable income. This applies to life insurance generally, and there’s no differentiation between whole or term life insurance. However, if your beneficiary receives a lump sum and earns interest on it, they do need to pay tax on the interest they earn.