Best Life Insurance Companies for 2016

A good life insurance policy is essential to provide financial security for your family in the event of your death, and as many as 132 million Americans already pay for coverage of some type, according to statistics published by LIMRA. With so many companies and products available, shopping for life insurance policies may seem daunting at first, but you need to make the right choice to cover everything from outstanding mortgage repayments to funeral expenses.

Thirty percent of Americans know they need more life insurance than what they already purchase, but 65% of Americans say they don’t buy because they believe it’s too expensive.

Price is an important factor in any purchasing decision, and shopping for competitive life insurance rates with a life insurance quote tool makes it easier to find coverage that suits your budget.

A good price shouldn’t be the only deciding factor, and researching insurance companies to find out if they have the financial strength and customer service you require is just as important. Consider some of the largest insurance companies in the United States that offer a good selection of term and permanent life insurance to suit a range of needs.

Our List of Top 10 Life Insurance Companies

There are dozens of life insurance companies throughout the United States offering a range of products to suit all types of people. Not all companies offer comparable products, and often your personal requirements dictate which company is the right choice for you. Before you shop for an insurance product, calculate what you expect any death benefit to achieve.

Consider the standard of living your family currently enjoys, and aim to provide the financial security for them to continue that lifestyle after settling funeral and medical expenses. Permanent life insurance provides a death benefit no matter when you pass away, so this is a popular choice for many people. All of these top 10 life insurance companies provide permanent coverage and have long histories of quality service.

Gerber Life Insurance Company

Since 1967, Gerber Life Insurance Company has provided life insurance products and specializes in solutions for young families on limited budgets. The company is a financially separate affiliate of the baby food producer Gerber Products Company, and it shares the same aim to help parents raise happy, healthy children.

  • Financial rating of A with A.M. Best
  • Specializes in child life insurance
  • Whole life offers $25,000 to $150,000 coverage with no medical exam
  • 0.55 complaint ratio for whole life insurance in 2015 (lower than national median)

Guardian Life Insurance Company of America

Guardian Life Insurance Company of America is over 150 years old with a legacy dating back to 1860. This is a mutual company owned by the policyholders rather than shareholders, and it works on the founding principles of doing the right thing, putting people first and maintaining high standards.

  • Financial ratings of AA+ with A.M. Best and Standard & Poor’s
  • Range of products, including several types of universal life insurance
  • Some products are eligible for annual dividends
  • 0.04 complaint ratio for whole life insurance in 2015 (lower than national median)

Haven Life

Haven Life is an online life insurance company that’s a newcomer to the space. Launched in May 2015 with a mission to make life less hard, Haven Life is backed by top life insurer MassMutual and offers a term life insurance policy (also issued by MassMutual) that can be purchased entirely online. Qualified, healthy applicants don’t even need to take a medical exam.
  • Financial rating of A++ with A.M. Best
  • The only entirely online option for buying affordable term life
  • Provides online tools including a life insurance calculator and quote comparisons to top insurers – no contact information needed
  • Experience of a startup with the financial security and backing of a legacy insurer

Massachusetts Mutual Life Insurance Company (MassMutual)

MassMutual’s advertising claims that, since its founding in 1851, the company has had the single purpose to help people secure their futures and protect the ones they love, a commitment that remains a guiding principle. As a mutual company, there are no shareholders, and that means some policyholders with participating policies are eligible to receive annual dividends.

  • Financial ratings of AA+ with Fitch and Standards & Poor’s, and A++ with A.M. Best
  • Guaranteed acceptance whole life insurance option for ages 50–75
  • Some products are eligible for annual dividends
  • 0.05 complaint ratio for whole life insurance in 2015 (lower than national median)

Metropolitan Life Insurance Company (MetLife)

MetLife has provided life insurance since 1868 and claims its success is based on a history of social responsibility, strong leadership, sound investments and innovative products.

  • Competitive life insurance products
  • Guaranteed acceptance whole life insurance option for ages 50–75
  • Online applications for some products, with no medical exam
  • No maximum coverage on whole life insurance
  • 0.41 complaint ratio for whole life insurance in 2015 (lower than national median)

Mutual of Omaha

Mutual of Omaha is a Fortune 500 company founded in 1909. It offers three types of whole life insurance, including two with guaranteed acceptance.

  • Financial rating of A+ with A.M. Best
  • Eligible ages across various whole life products from 18–85
  • Two guaranteed acceptance whole life products for ages 45–85
  • Online applications for some products, with no medical exam
  • 0.00 complaint ratio for whole life insurance in 2015 (lower than national median)

New York Life Insurance Company

The New York Life Insurance Company started in 1845, and it’s a mutual insurance company that isn’t publicly traded and therefore has no shareholders. Policyholders share in ownership of the company with certain products that grant rights to vote in the board of directors elections and award a share in annual dividends.

  • Has the highest possible financial ratings from all four major credit rating agencies
  • Range of whole life and universal life products, with eligible ages from 0–90
  • Online form to arrange a meeting with a consultant
  • 0.13 complaint ratio for whole life insurance in 2015 (lower than national median)

Northwestern Mutual

Northwestern Mutual offers a selection of financial planning and insurance products, providing customers with the “whole picture” to prepare for the future. The company’s range of life insurances includes hybrid and flexible products, so it’s easier to find a policy that meets your exact requirements.

  • Financial rating of A++ with A.M. Best
  • Provides online educational tools to help you realize your financial goals
  • Some products are eligible for annual dividends
  • 0.04 complaint ratio for whole life insurance in 2015 (lower than national median)

Ohio National Life Insurance Company

Ohio National dates back to the formation of a stock company in 1909, and it converted to mutual company status in 1959, meaning there are no shareholders. It markets products in all states except New York.

  • Financial ratings of AA- with Standard & Poor’s, and A+ with A.M. Best
  • Four levels of whole life insurance to cater for a broad range of customers
  • Some products are eligible for annual dividends
  • 0.07 complaint ratio for whole life insurance in 2015 (lower than national median)

State Farm

G.J. Mecherle founded State Farm in 1922 in the farming town of Bloomington, Illinois. The company now serves over 80 million policies in America and Canada and is the number-one auto insurer in the United States.

  • Extensive range of products, including single premium life coverage with one-off payment
  • Some products are eligible for annual dividends
  • 0.13 complaint ratio for whole life insurance in 2015 (lower than national median)

Transamerica

The origins of Transamerica date back to 1904, but the company has provided insurance products since 1961. It boasts financial strength and had $1,068 billion of insurance in-force in December 2015.

  • Financial ratings of AA- with Fitch and Standard & Poor’s, and A+ with A.M. Best
  • Whole life available with face amounts of $2,000–$50,000
  • Online form to locate local agents
  • 0.57 complaint ratio for whole life insurance in 2015 (lower than national median)

Difference Between Permanent and Term Life Insurance

Many of the top health insurance companies have a range of products to suit people of various ages and genders. Permanent life insurance, otherwise called whole life insurance, and term life insurance are the two main types of life cover for individuals (rather than parties) that insurance providers offer.

Term Life Insurance

Term insurance covers a defined period of time, ranging from 1 to 30 years, and only pays out if you pass away within that period. If you outlive the policy, your premiums are lost and there is no death benefit. Level term is the most common type of term insurance, and it offers a fixed death benefit that stays the same throughout the duration of your policy. The alternative is decreasing term insurance, wherein your death benefit drops in decrements over the course of the policy in exchange for reduced premiums.

AdvantagesDisadvantages
Lower premiums than whole life insuranceTemporary coverage
Often renewableNo cash value
Sometimes convertible to whole life insurancePremiums increase as you get older

Permanent Life Insurance

All of the top-rated insurance companies offer permanent life insurance. This type of product protects you for your entire life, providing a death benefit when you pass away. Throughout the life of the policy, your premiums and death benefits remain the same. Over time, the policy accrues a cash value, and it’s possible to obtain a loan against that value or claim the value if you terminate the policy.

Some major insurers in America are mutual companies that don’t have shareholders. A permanent life insurance policy with a mutual company often entitles you to a share of annual dividends. Such dividends aren’t guaranteed, and the amounts depend on the financial achievements of the company, but they’re often a strong incentive because they provide a way to recoup some of your premium payments.

AdvantagesDisadvantages
Permanent coverageMore expensive than term insurance
Builds cash valueMore complicated
Level premiumsTakes years for cash value to start accruing

Our Methodology for Rating Life Insurance Companies

It’s difficult to develop a standardized method for determining which insurance companies are the “best” throughout America, as many companies offer specialized products and may only cater to certain demographics. This makes them more appealing in particular circumstances. For example, some companies offer guaranteed products that don’t require you to complete a health check; such products are useful for elderly people with poor health but are often more expensive and offer lower death benefits than a product that requires you to submit to a health questionnaire.

This report considers the biggest life insurance companies based on annualized premium whole life insurance sales in 2015, according to LIMRA. All of these companies offer permanent life coverage for individuals, generate a high volume of sales and have a complaints ratio score lower than the national median.

A large volume of sales indicates the company has the ability to acquire and keep customers, provides a high level of customer care and has the financial strength to stay in business to pay its obligations in death benefits when the time comes. These characteristics make such companies smart choices when you shop for an insurance policy, but it’s important to bear in mind that the ideal company for you isn’t necessarily one of the largest and most successful. Pick the company with a policy that matches your requirements and budget, and take care to read all of the small print before making a commitment.

Making the Right Choice for You

Whichever company you choose, you must be confident it has the financial strength to continue business for the term of your life insurance, so do some due diligence and research the company thoroughly. Standard & Poor’s and A.M. Best are major credit-rating agencies that provide information on life insurance company ratings to aid your decision-making process. A rating of at least A- is desirable and shows the company has strong investability and the potential to generate wealth. Additional information such as in-force policies and total liabilities are published on major insurers’ websites.

The number of upheld complaints the company receives is another useful way to determine where to place your money. The National Association of Insurance Commissioners website hosts a useful tool for determining the number of complaints for any given company and includes a ratio score adjusted for market shares to reveal whether the insurer is above or below the national median of 1. Scores of 1 or lower are desirable because they indicated that the company receives few complaints for its size. Armed with this valuable information, it’s much easier to find a company that matches all of your expectations and meets all of your needs.

When it comes to selecting a life insurance product, research all of the options carefully. Most insurers offer several product types with a great deal of flexibility in how they’re set up. While it’s possible to apply online in some cases, it’s better to speak with a consultant if you have any doubts as to the suitability of a product.

You can trust that we maintain strict editorial integrity in our writing and assessments; however, we receive compensation when you click on links to products from our partners and get approved.
Published August 17, 2016 Updated: October 20, 2016
Related Links

Leave Your Reply

Submitting comment...