The Bottom Line

You can't go wrong with Nationwide, which is a financially strong company with a wide range of policies that you may not need a medical exam for (though you'll score a better rate if you're healthy and get a medical exam). Most policies include three living benefit riders—a rare benefit—so if they appeal to you, Nationwide may be your best bet. If you're set on getting a term life insurance policy from one of the top-rated life insurance companies, check out Protective. It rises above most competitors—just be aware that its customer satisfaction ratings are low. Also consider MassMutual for convertible term policies and Mutual of Omaha for return-of-premium policies. Banner is another favorite, and its term pricing is on par with Protective's, but it comes with limited rider options.

Shoppers for whole life insurance should pay attention to New York Life, our all-around favorite for that kind of policy, and Penn Mutual, which excels when it comes to dividends.

What Are the Types of Life Insurance?

Life insurance can be divided into two main types: term and permanent, or cash value life insurance. Term life insurance policies only provide coverage for a certain period of time, such as 30 years. Permanent insurance is designed to offer coverage for your entire life. Two common types of permanent life insurance include whole life and universal life.

Term life insurance is often the easiest to buy: If you're healthy and under 50, you could get a 20-year term policy online in minutes. But if you need a permanent policy that will cover you for your entire life, you're 50 or older, or are in poor health, be prepared to speak to an agent and for a longer application process (which may include a medical exam).

Term Life Insurance

Term life insurance is the most affordable type of life insurance coverage because it lasts for a limited period of time. Most term life policies cover you for between 10 and 30 years.

The best term life insurance policies offer affordable coverage that can be converted into permanent coverage before the term policy expires. This is called convertible term life insurance. The advantage of buying convertible term is that you can lock in the health classification the insurance company gave you when you first applied for the term policy. (This is important if you develop a health issue that could increase you rate, or make you ineligible for coverage.)

Most term life insurance policies also allow you to renew coverage on an annual basis once the term expires. But the premium will increase annually based on your current age; if you want coverage longer than the duration of your term policy, it's best to convert to whole life instead of renew. Most companies offer term life insurance for terms up to 30 years, but some, such as Protective, offer terms up to 40 years.

Best Term Life Insurance Companies
	Best Overall
	Best for Cheap Insurance
	Best for Living Benefits
	Best for Financial Stability

For more information, check out our full article on the best term life insurance.

Whole Life Insurance

Whole life insurance is more expensive than term life insurance and even universal life insurance (another form of permanent coverage). This is because whole life insurance has strong contract guarantees that ensure your coverage won't lapse: As long as you pay premiums as scheduled in the contract, the insurance company guarantees the death benefit and cash values for life. This is why it's an ideal solution when you need rock-solid permanent coverage and can afford the premiums. Some whole life insurance policies offered by mutual companies also pay dividends.

Universal life insurance, on the other hand, is more flexible (you can skip premium payments as needed), but could lapse in later years if you don't build up the cash value sufficiently.

Best Whole Life Insurance Companies
	Best Overall
	Best for Living Benefits
	Best for High Issue Age
	Best Traditional Insurer
	Best for Burial Insurance
	Best for Dividends
	Best for Customer Satisfaction
	Best for Financial Stability

For details, see our full article on the best whole life insurance.

Universal Life Insurance

Universal life (UL) insurance is similar to whole life insurance with a couple of important distinctions. UL has flexible premiums, a flexible death benefit, and interest that is credited to the cash value based on current interest rates, which vary. So, unlike with whole life insurance, you don’t know in advance how much the cash value will be worth in the future.

Universal life insurance is more affordable than whole life insurance, but you may need to increase your premium payment in the future if the cash value doesn't perform as expected and/or you don't make sufficient premium payments.

Indexed Universal Life (IUL)

Indexed universal life insurance (IUL) policies are a hybrid type of UL coverage that provide an opportunity to profit from upward swings in a variety of popular stock market indexes, such as the S&P 500. Positive index performance results in the cash value being credited, while negative performance does not result in a cash value loss. The least amount the cash value will be credited is referred to as the floor (for example, when the index experiences a negative return). Most IUL policies have a 0% floor.

Conversely, gains are limited as well. In fact, insurance companies are innovative when it comes to the complexity of calculations they employ to limit gains. For example, an IUL policy may be subject to one or more (usually “more”) of the following:

Participation rate: This is the percentage of index gains that will be credited to the policy. For example, if the index returns 10% and the participation rate is 60%, 6% would be credited).

Spread: This rate is deducted from the index’s gains. If the index returns 10% and the spread is 4%, your policy would be credited 6%.

Cap: This limits the amount of interest your policy can be credited. If the cap is 6% and the index returns 10%, 6% will be credited to the cash value.

IUL policies can be an attractive proposition if you want the potential for stock market gains but want to avoid losses. Just be aware that if the index doesn’t perform well enough, interest credited could be insufficient to keep up with policy expenses and your premium could increase. 

Variable Life Insurance and Variable Universal Life (VUL)

Variable life insurance and variable universal life insurance (VUL) are the riskiest types of coverage. That's because you invest the cash value component directly in the stock market via subaccounts, which are very similar to mutual funds.

The difference between variable life and VUL is that VUL has a flexible death benefit and flexible premiums, while those things are fixed in a variable life policy.

While variable life products can be a tax-advantaged way to invest in the stock market, the cash value is not protected from market losses. This means if your investments underperform, you could be required to increase premium payments or the policy could lapse. What's more, variable policies that lapse may result in severe tax consequences. Most people should only invest in variable life insurance if they have sufficient life insurance coverage in place via another policy. Since this is considered an investment product, it can only be sold by life insurance agents who are also licensed to sell securities. Always ask for a prospectus before investing in VUL. It's best to speak with a financial advisor to be sure an investment in variable life insurance makes sense.

Burial Insurance (a.k.a. Final Expense and Guaranteed Issue)

Burial insurance policies are whole life policies designed for older applicants in poor health and don't require a medical exam. Some policies have a handful of health questions, while others are considered guaranteed issue and do not consider your health at all when determining your rate or approving your application. As a result, these policies are the most expensive, relative to the amount of coverage.

They also carry a “graded benefit” for two to three years. If you die from natural causes during this time, your beneficiaries will only receive a return of the premiums you paid (usually plus a percentage like 10%). They will not receive the full death benefit unless you die after the graded period is over.

The minimum age for burial insurance may be as low as 40 years old, but some companies have higher minimum age limits. Final expense policies also have low coverage amounts (typically not more than $35,000) as they are intended to cover the insured person's final expenses.

No-Medical-Exam Life Insurance

No-medical-exam life insurance refers to any life insurance policy you can apply for without taking a medical exam. Instead of an exam, you answer health questions and the insurance company checks your medical and other records. You may also have a phone interview. If you qualify, you can get a policy within a few days, or sometimes instantly online. But note that if you're healthy, you're probably better off getting a policy that requires an exam because the rate will be cheaper.

Best No-Medical-Exam Life Insurance Companies
	Best Overall
	Best for Financial Stability
	Best for High Coverage
	Fewest Complaints

Find out more in our full article on the best no-medical-exam life insurance companies.

Which Type of Life Insurance Is Right for You?

With so many kinds of life insurance, it can be hard to figure out which one to choose. It helps to start by thinking about what you want the policy for and who you want to benefit. For example, do you want life insurance mainly to help replace your income for your family if you die? Is it so you can create an inheritance for your heirs? Or do you just want to cover your funeral expenses?

Other factors to consider:

• What you're eligible for: Your age, lifestyle, and medical history could preclude you from some types of insurance.
• Your budget: Monthly premiums vary a lot depending on the type of coverage you choose, with term life being the most affordable.
• Whether you want to build cash value: If you want a tax-free savings vehicle that you can withdraw or borrow from while you're alive, you'll want a permanent policy.
• How much control you want over your cash value's growth: Do you want a fixed rate of return you can count on? Then whole life is best. If you prefer that your cash value is pegged to market interest rates, universal may be your answer. And if you want to control the cash value growth with hands-on investing in a portfolio of subaccounts, variable life insurance could be best.

How to Choose the Best Life Insurance Company

If you get group life insurance through your employer, you usually don't have a choice of providers. But if you want more coverage, or you don't have an employer-provided plan, you'll need to buy it on your own.

To choose the right life insurance company for you, consider financial strength, customer complaints, customer satisfaction, available policy types, available and included riders, and ease of application. Then, collect quotes among your top picks and compare life insurance rates. Doing this homework will ensure that when you buy life insurance, you've chosen a company that offers the life insurance options that suit your needs and will be there when your family needs it.

1. Check out the company's financial strength: You want a company that will be in business long enough to pay out your death benefit. So, look at for financial stability. A++ and A+ ratings are considered “Superior,” while A and A- are considered “Excellent.” Other agencies also rate insurance companies, including Moody's, Fitch, Standard & Poor's, and Demotech.
2. Look for a company with relatively few customer complaints: The National Association of Insurance Commissioners (NAIC) uses customer complaints to create the, which indicates whether a company received more or fewer complaints than expected, based on its market share. An index lower than 1 indicates the company received fewer complaints than expected, while a number over 1 means it got more than expected. The higher the index, the more customers complain, and vice versa. 
3. Investigate other measures of customer satisfaction: Not all companies are ranked for customer satisfaction, but check sources like to see if companies you’re considering are. At a glance, you can see how a company ranks compared to others when it comes to customer satisfaction.
4. See if the company offers the kind of insurance you want: If you know which type of insurance you need, make sure each company you’re considering offers it. But note that a whole life policy with one company can be very different from a whole life policy with another. Though policies between companies might have the same name, each company tries to make its product stand out. Make sure their efforts suit your needs.
5. Don't forget to research available and included riders: This is a major way that same-named policies can differ. For example, a universal life policy with one company might include a generous accelerated death benefit rider at no cost, while a UL policy with another company may not. Or a term policy with one company may allow you to convert it to permanent coverage, while a term policy with another company may not. Research riders to know what you’re paying for.
6. Consider companies that make applying easy: Sometimes the biggest barrier to buying life insurance is the application process. And often, it’s better to get some coverage in place—especially if you have dependents—than it is to find the absolute best coverage you can. If you’re too busy for a medical exam, look for companies that don’t require one.
   

How Much Does Life Insurance Cost on Average?

Term life insurance can cost as little as $13 per month, on average, for a $250,000 30-year policy for a healthy 25-year-old. Or, the same policy could cost around $400 for a 65-year-old smoker. The monthly cost of whole life insurance for the same amount of coverage is over $100 per month for a healthy 25-year-old, and almost $1,000 for a 65-year-old smoker.

Life insurance companies determine how much you'll pay through the application process, during which they consider factors such as your age, health, occupation, and location. Older applicants and those in poor health pay the most for life insurance, which is why it often makes sense to apply while you're younger and healthier.

Average Life Insurance Cost Per Month ($250,000, 30-year term policy)
Company	25 years old (average)	40 years old (average)	55 years old (average)
Nationwide	$20.89	$28.88	$99.97
MassMutual	$18.15	$29.58	$122.46
Protective	$16.06	$25.66	$107.12
Banner	$16.07	$25.71	$107.91
Mutual of Omaha	$19.68	$31.39	$137.39
Guardian	$19.53	$31.65	$110.49
USAA	$20.82	$30.09	N/A
Lincoln Financial	$17.25	$26.36	$114.05
Penn Mutual	$16.78	$26.48	$110.38
Transamerica	$16.99	$35.70	$128.68

*Life insurance quotes above are examples only and were collected for 30-year $250,000 term life insurance policies for non-smoking males and females ages 25, 40, and 55 in excellent health.

Life Insurance News

Haven Life has stopped selling policies: As of Jan. 12, 2024, you can no longer buy a new policy from Haven. The company's parent, MassMutual, has always issued and managed Haven's policies, and that will continue once the Haven brand is discontinued this spring.

Only one-third of millennials have life insurance: Some members of this generation are turning 40, and have families and debts such as mortgages, student loans, and credit cards. Yet only 34% have bought life insurance, according to a Mutual of Omaha survey. The same study found that only 41% of baby boomers are insured.

Many Americans don't think they have enough life insurance: Nearly half of Americans are either without life insurance or don't carry enough coverage, according to the 2023 Insurance Barometer Study by LIMRA, which stands for the Life Insurance Marketing and Research Association. According to the study, nearly 70% of Americans who have a life insurance policy feel confident in their financial security, while the number drops to less than half for people without life insurance. The largest groups saying they don't have enough coverage include Gen Z and Millenials, women, and Black and Hispanic people.

Why You Should Trust Our Expert Insurance Reviewers

Investopedia launched in 1999, and has been helping readers find the best life insurance companies since 2020.

We are dedicated to helping you find the right life insurance provider for your needs. In order to compile our list of the best life insurance companies, we developed a comprehensive life insurance methodology. We started off by researching what consumers want from life insurance companies, and for that, we looked to third-party consumer studies, including J.D. Power’s 2022 Individual Life Insurance and Annuities studies and the 2022 Insurance Barometer Study, by Life Happens and LIMRA. 

With those findings in mind, we spent three months digging up information about more than 55 features on 88 life insurance companies, including ratings for financial strength by AM Best, customer satisfaction, and individual customer complaints reported to insurance state commissioners and recorded by the NAIC (National Association of Insurance Commissioners). We also considered years in business, cost, online tools, no-medical-exam options, policy types and features, and available riders. 

NAIC Methodology: We considered each company's NAIC complaint index for its life insurance business by averaging those NAIC complaint index values over the three years (2021, 2020, and 2019). Our review process gave preference to companies with superior financial stability, few customer complaints, and a robust suite of products and resources. In particular, we valued online quoting and application tools, transparent pricing, and no-exam policy options. Companies received ratings boosts if customer service was accessible via features like live chat. We ranked each company according to the following categories and weights:

• Policy types and features: 21%
• Financial stability: 17% 
• Application process: 16%
• Customer satisfaction ratings: 15%
• Customer service: 14%
• Riders and living benefits: 9%
• Cost: 8%

Costs were evaluated by collecting term life insurance quotes for 25-, 40-, and 55-year-old male and female non-smokers in excellent health for 30-year $250,000 term life policies. We used Compulife data available through Term4sale.com. We compared individual offerings between companies by delving deeper into product specifics, including maximum coverage amounts, maximum issue ages, included riders (in particular, the number and type of living benefits available at no upfront cost) , and product-specific application processes. We used this research to determine the best companies for different products, consumer groups, and use cases.  Of the companies we considered, those with the greatest financial stability, fewest complaints, lowest cost, most generous benefits, easiest application process, most generous no-medical-exam options, and widest available features scored the highest across categories.

Guide to Life Insurance

• What is life insurance?
• How does life insurance work?
• Is life insurance worth it?
• Types of life insurance
• Term vs. whole life insurance
• How much life insurance do you need?
• How to choose life insurance
• How to buy life insurance
• Best Life Insurance for Seniors
• Best Life Insurance Companies for People Over 50 
• Best Whole Life Insurance Companies
• Best Universal Life Insurance Companies 
• Best Children’s Life Insurance Companies