Best life insurance companies of August 2023
Life insurance can be an invaluable tool when it comes to estate planning or providing financial protection to loved ones when you pass away. Whether you’re searching for a term policy to cover a few decades or a permanent policy that will last a lifetime, comparing the best life insurance companies is a great place to start.
Our team of experts evaluates hundreds of insurance products and analyzes thousands of data points to help you find the best product for your situation. We use a data-driven methodology to determine each rating. Advertisers do not influence our editorial content. You can read more about our methodology below.
Top-rated life insurance companies of 2023
According to our analysis, the best life insurance company is Protective. Pacific Life also gets 5 stars in our rating.
USA TODAY Blueprint may earn a commission from this advertiser. Best life insurance companies
Best life insurance
Great for retirement planning
Great for customizable terms length
Great for historic portfolio performance
Great for financial strength
Great for survivorship coverage
Best for living benefits
Great for term life insurance
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To help you compare life insurance companies and choose the best one for your needs, our team of experts analyzed several key factors, including each company’s product offerings, life insurance rates, historical performance and financial strength.
Methodology
To determine the best life insurance companies, our life insurance experts evaluated 25 of the top life insurance companies that offer coverage in the United States.
Each life insurance company included in our evaluation had the opportunity to earn up to 100 points, based on the following factors:
Term life insurance rates: 35 points. Since term life insurance is often the most affordable coverage option, we evaluated rates for both 30- and 40-year-old males and females, for term lengths of 10, 20 and 30 years and coverage amounts of $250,000, $500,000, $1 million and $2 million.
Cost competitiveness of cash value policies: 15 points. Most permanent life insurance policies have a cash value component, but not all are created equal. We looked at internal policy costs, such as administrative fees and policy charges, to determine the competitiveness of permanent life policies offered by insurance companies in our review.
Historical performance: 15 points. The growth of cash value policies depends on several factors, including the historic performance of an insurance company’s investments. Our analysis took into account this metric to determine how an insurance company’s performance and therefore cash growth potential compared to others.
Complaints: 10 points. Life insurance claims are often filed during what may be an extraordinarily difficult time during a beneficiary’s life. As such, the customer experience is an important factor when identifying the best life insurance companies. To determine which companies offer the best service, we analyzed complaints submitted to the National Association of Insurance Commissioners.
Reliability of policy illustrations: 10 points. When you purchase a permanent life insurance policy, the insurer should provide an illustration to show how the cash value is projected to grow over time. This is particularly important if you’re relying on your policy cash value as part of your retirement planning. We evaluated the accuracy of each insurer’s policy illustration to determine which companies provided the most reliable outlooks.
Financial strength: 5 points. There are four major rating agencies — AM Best, Fitch, Moody’s and Standard and Poor’s — that evaluate an insurer’s financial strength, a factor that indicates an insurer’s ability to pay out a claim years from now. We took this into consideration to account for the likelihood an insurance company is able to claim obligations.
Access to cash value: 5 points. Cash value policies grow at different rates, and we factored the liquidity of a cash value policy into our analysis. Some policies have a cash value that grows faster in the early years. Others have slower cash value growth in the early years, and policyholders must wait a significant period of time before having access to a sizable cash value.
Term life conversion availability: 5 points. Some companies allow policyholders to convert their term coverage to a permanent life insurance policy. We factored this in to help those considering term life insurance policies identify companies that provide this option.
To evaluate life insurance companies, we used data provided by Veralytic, an independent publisher of life insurance research and analytics, and AccuQuote, a national online insurance agency.
Why some companies didn’t make the cut
Of the 25 insurance companies we evaluated, only eight made our list of the best life insurance companies. Companies with high policy rates, growth prohibitive internal costs or a poor historic performance were less likely to make our list. The same is true for companies that did not provide reliable policy illustrations for permanent life insurance policies or had a high number of consumer complaints.
Best term life insurance companies of August 2023
Term life insurance allows you to lock in rates for a set period of time, such as 10 or 20 years. At the end of your level term period, you can usually renew your policy every year, but for a much higher rate at each renewal.
If you’re shopping for term coverage, be sure to get quotes from Symetra and Pacific Life. Both insurers offer term life insurance products that earn 5 stars in our rating of the best term life insurance companies.
Best whole life insurance companies of August 2023
Whole life insurance is a form of permanent coverage, which means you’re covered for life, as long as you pay your premiums. This type of coverage also typically includes a cash value that you can tap into while you’re alive.
State Farm earns the highest rating in our analysis of the best whole life insurance companies, but getting quotes from any of the insurers in the table below can help you jump start your search and find a whole life policy that meets your needs and budget.
Best no-exam life insurance companies of August 2023
No-exam life insurance gives you the option of buying life insurance without needing a medical exam as part of the application process. But this choice sometimes comes with higher rates. Here are the policies that make our rating of the best no-exam life insurance.
Cheapest life insurance companies of August 2023
Shopping around for life insurance can help you find an affordable policy that meets your needs. If you’re looking for a policy that will fit into your budget, consider one of the companies that earn a spot in our rating of the cheapest life insurance companies.
Example annual rates for a $250,000 20-year term life insurance policy at age 30 What is life insurance?
Life insurance is a product designed to provide financial protection to your loved ones when you pass away. A life insurance policy pays out a death benefit to the beneficiary when the policyholder dies.
The death benefit can be spent in any way the beneficiary chooses. They may choose to use the money to cover mortgage payments, tuition or everyday expenses such as utilities and groceries.
Life insurance can also be an estate-planning tool and the death benefit can be used to cover end-of-life expenses, such as burial or cremation costs.
There are two major types of life insurance: term life insurance and permanent life insurance. Term life insurance locks in rates for a specific period of time, or term. Permanent life insurance lasts for your lifetime. There are several types of permanent life insurance, including whole life, universal life and variable life insurance.
Types of life insurance
Life insurance is typically broken down into two types: term life insurance and permanent life insurance. While shopping for the best life insurance policy, it’s important to understand both options.
What is term life insurance?
Term life insurance, sometimes called temporary coverage, locks in level premiums for a specific period of time. Terms usually range from 10 to 30 years, though some insurers offer longer terms.
If you pass away during the term and your policy is in force, your beneficiary receives the policy’s death benefit. When the term ends, you can typically renew your coverage up to the age specified in your policy, but your renewal rate will likely be much higher. If you pass away after the term ends and you have not renewed your policy, your beneficiary will not receive a death benefit.
Term life insurance is typically cheaper than permanent life insurance. However, unlike most permanent life insurance policies, term life policies don’t build cash value.
What is whole life insurance?
Unlike term life coverage, which is designed to be temporary, whole life insurance is permanent. When you purchase whole life insurance, you have coverage for your lifetime as long as you pay your premiums on time.
Whole life policies can also accumulate cash value. A portion of each premium payment is set aside in an account, and you can tap into that cash value later on to supplement your retirement, pay your premiums or pay for a child’s education.
Whole life coverage has a guaranteed premium and death benefit, and the cash value accumulates at a fixed rate. As such, it tends to be substantially more expensive than term life coverage.
What is universal life insurance?
Like whole life coverage, universal life insurance is a form of permanent insurance and it often has a cash value. It is considered more flexible than whole life insurance because many universal life insurance policies allow you to change your premium and death benefit.
There are several types of universal life insurance, each with a varying level of flexibility and risk. Some types, like guaranteed universal life, offer less flexibility but have a guaranteed death benefit and premiums that stay the same over time.
Other types, like index universal life and variable universal life offer flexible premiums and death benefits but cash value gains and losses are dependent on the market index (index universal) or your chosen investments (variable universal). This can create an opportunity for higher gains when compared to guaranteed universal life insurance, but it also leaves you vulnerable to losses that can wipe out your cash value.
If you’re considering this type of coverage, it’s wise to speak to a financial advisor who can help you understand the potential risks and how they may affect your retirement planning.
What is variable life insurance?
A variable life insurance policy combines a death benefit with an investment element. The cash value operates as a savings account, and you can use it to invest it in stocks, bonds, mutual funds or money market funds to potentially grow your money. These policies have the potential for stronger gains when compared to other policies but are riskier since the value of the account can decline if your investments perform poorly.
Unlike variable universal life insurance, variable life insurance does not provide flexible premiums. Though the death benefit may fluctuate, it won’t fall below the amount specified in your policy.
What is no-exam life insurance?
When you apply for life insurance, the traditional process includes a review of your medical history and a physical exam with lab work. But there are some options that allow you to get coverage without a medical exam:
Not everyone is eligible for simplified underwriting, and it’s often more expensive than fully underwritten policies.
Other types of life insurance
Many insurers offer other types of specialized life insurance that may be worth considering depending on your financial circumstances and reason for seeking coverage.
Mortgage life insurance
Also known as mortgage protection insurance, this type of life insurance is designed to pay off your mortgage when you die. Policy premiums are level throughout the policy, and terms align with the duration of your mortgage. The coverage amount decreases as you pay down your loan.
Unlike other types of life insurance, the death benefit from a mortgage life insurance policy does not go to your loved ones or other chosen beneficiaries. Instead, the mortgage lender is the beneficiary.
Burial insurance
Also known as final expense insurance or funeral insurance, burial insurance is a type of whole life insurance that is designed to cover final expenses. This may be the best life insurance option if your only goal is to cover costs such as funeral home services, a burial plot, cremation, a headstone, obituary notice and a casket or urn.
Policies generally offer $5,000 to $25,000 in coverage, and the death benefit can also be used to cover other expenses, such as legal services, outstanding auto or home loans, credit card debt or medical bills.
Survivorship life insurance
Survivorship life insurance is a type of permanent coverage that covers two individuals, typically spouses. Also known as second-to-die life insurance, this type of coverage offers one death benefit that is paid out only after the second covered person dies. For example, if a couple purchases a survivorship policy and their child is the beneficiary, that child won’t receive a death benefit until both parents have passed.
Survivorship life insurance is typically available as whole or universal life insurance policies and carries a cash value.
Supplemental life insurance
A supplemental life insurance policy is one offered for free or at a very low rate through your employer. Also known as group life insurance, this type of coverage is tied to your job and is often offered as a benefit of employment. As long as you stay with your employer, you are covered. If you leave your job, coverage typically ends.
How to choose the best life insurance company
When shopping for life insurance, here are a few factors that can help you narrow down your options.
Policy and product availability. Most of the life insurance companies in our rating offer both term and permanent life insurance products, but product availability can vary by insurer. For instance, Symetra, which earns a spot in our best term life insurance rating, only sells term and universal life insurance — you won’t be able to purchase other types of permanent coverage, like whole life insurance.
Differences also exist among insurers that sell the same type of coverage. For instance, term life insurance companies often sell policies with terms up to 30 years, but others, like Protective, issue policies with terms as long as 40 years to eligible individuals.
Another example of how similar life insurance products may vary by insurer is rider availability. Most insurers offer riders, but the options will vary. Some companies may also sell policies that automatically include a specific rider, while others may charge you extra. Pacific Life, for instance, includes a terminal illness rider in some of its policies.
Financial strength. To ensure that your beneficiaries receive a financial payout when you die, you want to choose a life insurance company that is able to hold up its end of its bargain and issue the death benefit. A company’s ability to do so is considered its “financial strength.”
Companies like AM Best, Standard & Poor’s and Moody’s assess the creditworthiness of insurers, so you don’t have to. They evaluate insurers based on factors like their balance sheet strength, enterprise risk management (ERM) and operating performance to determine their financial strength rating (FSR).
AM Best issues ratings that range from A++ (Superior) to D (Poor). The higher the score, the more confidence AM Best has in a company’s ability to pay out on life insurance claims.
All of the insurers in our rating of the best life insurance companies have an A (Excellent) or higher financial strength rating from AM Best.
Cost. The cost of life insurance is an important factor when choosing a life insurance company. That’s why we recommend you get at least three different quotes before making your decision. However, keep in mind that cost isn’t limited to the face value of your premium.
Life insurance premiums include internal costs and fees as well, and understanding the internal costs of a policy can help you evaluate insurers. This is particularly true if you’re purchasing a permanent life insurance policy with a cash value. The policy’s internal costs can directly affect how quickly your cash value grows.
Ask a potential insurer for insight into internal costs for the policy you’re considering before you make your decision.
Who needs life insurance?
Life insurance is an essential tool for protecting your family and loved ones financially in the event of your death — especially if you have anyone financially dependent on you. For example:
How to choose the best type of life insurance
To decide which type of life insurance is right for you, ask yourself the following questions.
Permanent or term life insurance?
Alison Salka, Ph.D., senior vice president and head of LIMRA Research, suggests that consumers begin their quest for coverage by establishing a clear understanding of their goals and why they want coverage in the first place.
Term life insurance is often billed as the more affordable option. “People can purchase larger coverage amounts for less than a permanent policy,” said Salka. “Generally, if someone knows they’re only going to need [life insurance] for a short period of time [like] while they have dependents living with them or for the duration of mortgage or other expenses, term is a really good, simple and easy to understand option.”
What about permanent coverage? Salka points out that while permanent life insurance may be more expensive per dollar of coverage, there are benefits to considering it. Permanent policies “offer a savings or investment component, known as a cash value, and that grows tax deferred over time and can be withdrawn or borrowed against while the owner is still alive.” Another benefit of permanent life insurance is that you can lock in coverage and premium rates for your lifetime.
How much coverage does my family need?
Your current income and the length of time your family will need financial support impact how large of a death benefit you’ll need.
If your goal is to cover your mortgage or a child’s tuition, factoring that into your calculations can help you determine how much life insurance you need. You can also use your salary as a guide, determining how long you’d like to replace your income to support your family if you pass away.
Life Happens, a non-profit organization, has a life insurance calculator you can use to help you determine how much coverage to buy.
What is my budget?
Think about what you can reasonably afford to pay in monthly premiums. If you have a limited budget, term life coverage tends to be significantly cheaper than whole life coverage.
If you’re more financially comfortable and have longer-term goals, such as wanting to build cash value for your retirement, permanent life insurance may be a better choice.
How much does life insurance cost?
A healthy 30-year-old woman can expect to pay around $142 a year for a $250,000, 20-year term life insurance policy, based on our research. A male of the same age and health status can expect an average premium of $162 a year for the same policy.
According to the 2023 Insurance Barometer compiled by LIMRA and Life Happens, an organization that educates consumers about life insurance, the perceived cost of coverage leads many to forego life insurance. However, most consumers overestimate the cost of a policy by three times or more than the average rate.
When it comes to cost, term life coverage tends to be the cheapest type of life insurance. Permanent coverage, including whole and universal life options, are usually much more expensive than term life policies.
Factors that affect your life insurance premium
How much you pay for life insurance depends on several factors, including:
Average annual cost of coverage for females by insurer Average annual cost of coverage for males by insurer Average annual cost of a term life policy for a female by age Average annual cost of a term life insurance policy for a male by age Average annual cost of whole life insurance by age Is life insurance worth it?
Life insurance may be worth the investment if any of the following are true.
You have people who financially depend on you.
Financial stability for dependents is one of the leading reasons why people purchase a life insurance policy.
When a primary household earner dies, the remaining family members are often forced to meet financial obligations without the additional income they’re accustomed to. This can make it difficult for them to manage major expenses, like covering mortgage, rent or tuition payments. Everyday expenses, like utilities, groceries and other necessities, can also present a problem.
A life insurance policy can help replace your income and provide the necessary funds to help loved ones maintain financial stability.
You want your final expenses covered.
The national median cost of a funeral is $7,848, according to the most recent data from the National Funeral Directors Association, and that number can increase as you account for monuments and end-of-life medical expenses. Even a small death benefit, such as that offered by burial insurance, can help your loved ones cover expenses.
You think your loved ones may need to pay estate taxes.
Beneficiaries do not typically have to pay taxes on life insurance death benefits, and that can make a policy useful in managing your estate. If the value of your estate exceeds IRS estate tax limits, your loved ones can use the proceeds to cover the tax bill.
You are a business owner.
If you own or co-own a business, life insurance can play a vital role in your success or continuity plan.
As a co-owner, you can leverage life insurance as part of a buy/sell agreement. In this scenario, you purchase a life insurance policy for your partner and vice versa. When one of you dies, the other can use the policy proceeds to buy out the family, ensuring they are not left with business burdens.
Another scenario where life insurance can be useful is if you plan to keep your business in the family but are naming only one child as the heir. In this case, a life insurance policy can be used to equalize your inheritance, providing a death benefit to the child or children who will not inherit the business.
Despite the benefits, you may not need a life insurance policy. For example, if your dependents don’t rely on your income, and there are no extenuating circumstances, such as a large debt (e.g., a mortgage that will pass to a loved one), estate tax concerns or business succession needs, a life insurance policy may not be worth it to you.
Glossary of life insurance terms
Beneficiary
The person or entity who receives the death benefit of a life insurance claim. There can be more than one life insurance beneficiary — common options include a spouse, partner, child or grandchild. You can also choose a trust, estate or organization as your beneficiary.
Cash value
A savings or investment account that is commonly offered with permanent life insurance policies, such as whole life or universal life insurance. The cash value of a life insurance policy can grow over time and be accessed while you’re alive.
Death benefit
A death benefit is the amount of money that will be paid out by a life insurance company after a claim. The death benefit is paid out to the beneficiary or beneficiaries named in the policy.
Dividend
A portion of a life insurance company’s earnings that are distributed to some permanent life insurance policyowners as a partial return of premiums. Dividends are dependent on the company’s earnings.
Riders
Riders are add-on features that you can use to customize or enhance your life insurance policy. Some policies come with riders that are built into the policy at no extra charge, but often you have to pay extra to add a rider.
Underwriting
Life insurance underwriting is the process insurers use to analyze the risk associated with an applicant. It is also used to determine eligibility and premiums, or how much you’ll pay for life insurance.
More Life Insurance Ratings
Frequently asked questions (FAQs)
What’s the difference between term and whole life insurance?
The primary difference between term and whole life insurance is how long coverage lasts. A term life insurance policy lasts for a specific period of time, such as 20 or 30 years, during which the rates are locked in. Whole life insurance is a type of permanent coverage that will last your lifetime and typically include a cash value that you can tap into while you’re alive.
Which is better: Term life or whole life insurance?
Term life insurance may be a better choice if you want financial protection for a certain period of time, such as until you pay off your mortgage or your child graduates school. It’s also a good option if you want to purchase life insurance but are on a limited budget.
Whole life insurance is better if you want coverage that lasts a lifetime and you don’t want to have to worry about renewing a policy — which often means paying a higher rate. Whole life insurance may also be a better option if you want a life insurance policy that includes a cash value component.
Which type of life insurance is the most popular?
Term and whole life policies accounted for 86% of life insurance sales in the first three quarters of 2022, according to recent data released by LIMRA.
Do life insurance policies pay dividends?
Yes, some life insurance policies pay dividends. Whole life insurance is the most common type of life insurance that offers dividends.
Dividends in life insurance act as a partial return of premium feature. The life insurance company invests a portion of your premium payments. If the company makes successful investments and keeps operating expenses low, a portion of the surplus is returned to you as a dividend payment.
If you want a life insurance policy that returns dividends, look for a “participating” instead of a “non-participating” policy, as non-participating policies don’t issue dividends.
What kinds of death are not covered by life insurance?
A life insurance policy may not cover deaths under the following circumstances:
Coverage and exclusions can vary by life insurance company, so it’s important to thoroughly read your policy and contact your insurer if you have questions regarding your coverage.
Can you buy life insurance on someone else?
Yes, you can buy life insurance on someone else, but only if they know about and consent to the purchase. People commonly purchase policies for their:
Shopping for coverage? How life insurance works
Editor’s Note: This article contains updated information from previously published stories:
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