Life insurance is something that no one wants to think about needing. While contemplating you or a family member’s death seems morbid, it’s essential in preparing for a potential future without that family member.
If you happened to die tomorrow, would you want your family to struggle due to lack of money? That’s what could happen if you’re the sole breadwinner and don’t have assets set aside to cover your family’s future needs.
Thankfully, life insurance can protect your family from struggling with money at a time when they already have enough to overcome.
Best life insurance companies overview
Company Best For
Multiple life insurance quotes from different companies
Rewarding healthy lifestyle
Bestow Term life insurance
Fabric New parents
Those that may want to decrease coverage in the future
One of the best overall life insurance companies
One of the top whole life insurance companies
Best for multiple life insurance quotes
We included Policygenius as one of our top companies to buy life insurance from despite the fact they don’t (typically) offer life insurance directly.
Instead, Policygenius is a life insurance broker. They can help you shop many life insurance companies at one time. This allows you to make sure you get the best deal without spending hours getting quotes from each individual company.
Just fill out your information once and you’ll get quotes almost instantaneously from multiple quality life insurance companies. Read through your options, select a quote, then move forward with the formal life insurance application.
Now, there is one exception to their lack of direct lending. Policygenius recently partnered with Brighthouse SimplySelect℠ to offer term life insurance. Through this partnership, Policygenius can offer up to $2 million in coverage, and to get a policy, you won’t need to complete a medical exam.
You will have to pick up the phone and call a Policygenius agent to answer a questionnaire, but once you do that, you could be insured in as little as three or four days (a welcome change to the weeks or months it takes with some companies).
Best for rewarding healthy lifestyle
Health is more than eating right and remaining physically fit. Sproutt factors the full picture of your wellness into your insurance quotes. Using its Guided Artificial Intelligence Assessment (GAIA) platform, you’ll answer questions designed to determine your overall health.
In addition to gathering information on your daily nutrition and activity habits, GAIA assesses factors like your sleep habits, work-life balance, and emotional health. You’ll be assessed a score based on Sproutt’s Quality of Life (QL) Index, which is determined through your answers to a series of questions.
Using your score, Sproutt shops multiple insurers and delivers quotes to you. You can then choose from those quotes to get low premiums on a life insurance policy that fits your needs. Coverage amounts range from $50,000 to $3 million.
Best online insurance
On the term life insurance front, Bestow is by far an excellent choice. You don’t need a medical exam or bloodwork to process your online application, and Bestow offers term life insurance for two years, ten years, and twenty years. It is very hard to find term life insurance for two years, so that is a definite plus if you need something super short term.
Since everything is online, you can also get instant coverage if you qualify. Coverage is up to $500,000 for two years and up to one million for 10 and 20-year terms. Bestow is available across the United States except for New York.
Best for new parents
If you are a new parent, you might want to move Fabric up to the top of your list of places to search for life insurance. Founded in 2017, Fabric was created by parents for parents, and their dedication to helping families shines through. In fact, they go beyond life insurance, offering wills, estate planning, and other financial tools aimed specifically at families.
Potential policyholders can expect to enroll in two different types of insurance through Fabric: term life and accidental death. And with policies that start at only $6 a month, and can cover up to $5 million, Fabric is the perfect, affordable option when it comes to life insurance.
Even better – the whole application process takes just 10 minutes (perfect for parents with kids constantly running around), and Fabric offers a slick mobile app that makes managing your plan as easy as possible.
Best for decreasing coverage in the future
Your life insurance needs will change over time and that is why we included Ladder as one of our top life insurance companies. Ladder knows that you may not need as much life insurance in the future as you start building your financial assets over time. After all, if you have $500,000 in investments, that is probably $500,000 you won’t need in life insurance.
While you might not have $500,000 in investments today, regular investing over a decade or two could get you there. If you have a 30 year term life policy, that may mean you could be over-insured in the future. Ladder allows you to adjust your coverage levels at any time without fees or hassle.
Ladder’s policies are issued through Fidelity Security Life Insurance Company which has an A or Excellent A.M. Best rating and an A+ rating with the Better Business Bureau.
Best life insurance for healthy people
We featured Health IQ in a unique category that doesn’t make sense for most types of insurance but makes a huge difference for life insurance. Since life insurance bases rates on the likelihood of you dying, it makes sense that healthy people shouldn’t have to pay as much for life insurance as unhealthy people.
Health IQ focuses on saving healthy people money on their life insurance by evaluating your health, allowing you to take a health literacy test and verifying your lifestyle by meeting running, cycling or swimming goals. If you qualify, you could gain access to better life insurance prices for healthy people.
Best for overall life insurance offerings
MassMutual is one of the largest insurance companies in America and has an amazing financial strength rating, as well. They offer many types of life insurance policies, giving you plenty of options to meet your life insurance needs.
MassMutual has an A++ or Superior A.M. Best rating and a B rating with the Better Business Bureau.
Get a life insurance quote with MassMutual.
Best for whole life insurance offerings
Northwestern Mutual is another huge life insurance company with a strong financial strength rating. Since a whole life policy will last your entire lifetime and will eventually pay out a sum of money, it’s important that you pick a company with a strong financial strength rating, like Northwestern Mutual.
Northwestern Mutual has an A++ or Superior A.M. Best rating and an A+ rating with the Better Business Bureau.
Get a life insurance quote with Northwestern Mutual.
Summary of the top life insurance companies
Now that we’ve covered these places to get life insurance quotes in detail, here’s a quick summary of what types of policies each company offers:
Company Insurance Offered Unique Features
Policygenius Term life
Level term life
Return of premium life
No medical exam required
Bases quotes on your physical and emotional health
Bestow Term life insurance Offers two year term options which is quite uncommon
Fabric Term life insurance, accidental death insurance You can create wills and estate plans
Increase or decrease your coverage in the future without fees or hassle
Great discounts for those who maintain a healthy lifestyle
MassMutual Whole life
Simplified whole life
A huge selection of insurance options
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What is life insurance?
So what exactly is life insurance? It may be a bit confusing because there are so many different types. However, life insurance is pretty simple in its most basic form.
A life insurance company offers you a life insurance policy. The policy allows you to pay the life insurance company premiums in exchange for a guarantee that if you die during the policy period, they’ll pay out the amount of life insurance you purchased to the beneficiary of the policy.
Unfortunately, life insurance has gotten complicated because there are so many variations on the basic policy. The two most common types are term life insurance and whole life insurance.
Term life insurance
Term life insurance allows you to purchase life insurance for a set term of time, such as 10, 20 or 30 years. You make premium payments during the period and if you die during the period, the life insurance company will make a payment to the beneficiary. However, if you don’t die before the end of the term, the policy expires and you get nothing.
While this may seem like a ripoff, it’s worth considering because term life insurance rates are typically cheaper than other options. The life insurance company is betting that, overall, they’ll pay out less in death benefits than the premiums they collect, allowing them to make a profit. It also protects your family in the unfortunate circumstance you die early.
However, during the policy term, we think you should also be saving and investing for your future. By the time the policy expires, you may have enough assets to no longer need life insurance.
But how much does term life insurance cost? Haven Life shared the following premium examples in a recent post on their blog post which we’ve compiled below:
|Age||Policy Term Length||Gender||$250,000||$500,000||$750,000||$1,000,000|
Based on the above data, you may see some distinct pricing trends. One of those pricing trends is that life insurance typically gets more expensive the longer your policy term is. When you think about it, this makes perfect sense.
The longer a life insurance company insures you for, the older you’ll be at the end of the policy. In general, the older you get the higher the risk is that you’ll die. If you die during the time when the life insurance policy is active, the company will have to pay out the death benefit.
However, you should also consider the fact that your insurance will be in effect for a longer period of time. Rather than only covering you for 10 years, a 30 year policy offers three times the length of insurance.
While you shouldn’t purchase a longer policy for no reason, if you actually believe you’ll need the insurance for the full 30 year term it’s probably a good idea to get the 30 year policy now. As you get older, life insurance rates usually increase.
If you bought a 20-year policy today then need to purchase an additional 10 year policy when it expires, your rates may be higher to buy an additional 10 year policy in the future than it would have been to pay for a 30 year policy today. This is especially true if your health declines over the next 20 years.
Whole life insurance
A whole life insurance policy, on the other hand, will last your whole life as long as you keep making premium payments and follow the rules of the policy. Since it lasts your whole life, the insurance company is guaranteed to pay out when you die as long as the policy remains active.
Additionally, whole life policies have a cash value component that increases the value of this type of policy. This means whole life insurance rates will generally be more expensive than term life rates.
Be sure to weigh all the pros and cons of both term and whole life insurance with your agent to make sure you are making the best decision for your circumstances.
You may be wondering exactly how much whole life insurance costs. Unfortunately, whole life insurance is much more complex than term life insurance. There are many different types of policies and riders you can purchase that will impact the rates you pay. That said, here are some of the pricing examples we found from TopWholeLife.com for whole life insurance where you pay until you reach age 100 for a person in excellent health:
As you can see, whole life insurance is much more expensive than a term life insurance policy. That said, a whole life policy will be in effect until the day you die unless you quit paying your premiums or cancel the policy.
Why you may need life insurance
Typically, people buy life insurance to protect their families, loved ones, or business should they die a premature death.
It provides assets so people or businesses can continue to function, recover, and live a normal life without the income or knowledge the insured person usually provides.
What does life insurance cover?
Life insurance offers a payout based on the amount of coverage you selected when you took out your policy if the insured person dies and followed the restrictions of the policy.
If you die of natural causes, a car accident or in another way that wasn’t excluded and happens in the normal course of life, your policy should pay out the death benefit to your beneficiary.
What doesn’t life insurance cover?
Life insurance won’t cover all deaths. Certain deaths are excluded based on the restrictions listed in the policy. Common exclusions include death by suicide, murder by the person that stands to benefit from the policy payout, and death caused by willing participation in criminal activity.
There are also exclusions listed in your policy such as sky diving or other dangerous activities. There may be other exclusions, as well, so make sure to read your policy in full before you purchase it.
A life insurance company may deny your death benefit if you lied on your insurance application. For instance, if you lied about your health or smoking habits to get a lower rate and the insurance company finds out about it, they can refuse to pay out your death benefit based on the rules in the policy.
It’s important to keep in mind, traditional life insurance only covers death. If you get seriously injured, it won’t cover you. It won’t cover your lost income if you can’t return to work, either.
What to look for in life insurance?
It helps to know what to look for when shopping for a life insurance policy. First, you’ll want to determine what type of policy you want to buy. After you figure that out, you should consider how long you’ll need life insurance for (the term) and how much money your beneficiary would need should you die (the benefit or coverage amount).
Next, shop multiple insurers to find a policy that meets your needs. Take a look at the premium, or cost, of the policy as well as the financial strength and customer service ratings of the companies you’re considering buying from. Read and understand the policy before you purchase to make sure you’re getting what you think you are.
How life insurance rates are determined
Life insurance rates are determined by a vast number of factors, but essentially insurers are pricing policies based on the chances that you’ll die. They may look into factors including:
- Your current health
- Your health history
- Your family’s health history
- Whether you smoke
- What activities you take part in
- Term of coverage
- Amount of coverage
- Driving record
- Alcohol consumption
- And more
Insurance companies don’t always get their premiums priced correctly. After all, people die prematurely in ways that are completely unpredictable based on the above factors.
Even so, life insurance companies spread the risk that they’re wrong out over a large number of policies they issue so that overall, they’ll end up earning a profit and can pay out death benefits to those that are entitled to them.
Life insurance is an important financial tool for many families. If your family couldn’t survive financially without struggling if you or your spouse died, you should probably consider getting a life insurance quote and purchasing coverage.
That way, you can have some peace of mind that should the unthinkable happen, your family can deal with the issue at hand rather than worrying about how they’re going to be able to financially survive as well.
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