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Business Insider compiled data from 30 different life insurance companies based on customer service, financial stability, and asset size rankings, along with premium prices where available.
The full methodology of this ranking is listed below, under “How we determined the winners.” Here is the full list:
|Company||Financial stability (max 200)||JD Power’s Customer satisfaction (max 1000)||Ranking by total net assets (top 20)||Weighted Score|
|New York Life||190||770||3||478|
|Mutual of Omaha||150||795||443|
|Principal Financial Group||90||789||12||442|
|Lincoln Financial Group||160||750||423|
|Midland National Life||150||723||407|
|Sammons Enterprises (North American Co. for Life & Health Insurance)||130||600||19||343|
Pros of a Northwestern Mutual term life policy
- Highest rated for customer satisfaction by JD Power
- Strong financial stability
- Offers several different types of policies, including a renewable policy with a one-year term
Cons of a Northwestern Mutual term life policy
- Policy must be purchased through an adviser
- No easy way to get a quote online to compare prices
- Will likely require a medical exam
Best for: Someone who doesn’t mind a very traditional approach to life insurance
In the business since 1857, Northwestern Mutual is an insurer focusing on life and health insurance. On JD Power’s 2019 Customer Satisfaction Survey, Northwestern Mutual took the top spot, earning 810 points out of 200. Northwestern Mutual also earned some of the highest credit rankings from financial security rating company A.M. Best, and second-highest rankings from Fitch and Moody’s.
However, Northwestern Mutual policies must be bought through a financial adviser, which adds more work for anyone who wants to simply get a quote to compare. While Northwestern Mutual has been around for a long time, this approach to buying shows its age.
New York Life
Pros of a New York Life term life policy
- New York life is the third-largest life insurance company by assets
- This company has earned top marks for financial security ratings from A.M. Best and Moody’s
Cons of a New York Life term life policy
- Policies must be purchased through an agent
- No online quotes available
- May require a medical exam
Best for: Anyone who wants wants highly personalized coverage
As the third-largest life insurance company in the US, New York Life is well-known. But, the fact that policies are only available through an agent means that it’s not as easy to compare policies and check rates as it could be.
New York Life has a variety of riders — or coverage in addition to your policy that can expand what it covers and when it pays out — you can choose to add on to your policy. One of these examples with New York Life is a chronic illness rider, which could help cover medical expenses for someone who becomes sick later in life.
As one of the largest life insurers in the US, New York Life has policies available nationwide.
Pros of a State Farm term life policy
- Policy purchase can be done completely on your own and online
- No medical exam required
- High customer satisfaction ratings
Cons of a State Farm term life policy
- Only offers 30-year terms for people under age 45
- Big jump in price between 20-year and 30-year policies
Best for: Current State Farm customers; people looking for 20 years worth of coverage or fewer.
While probably better known for auto and home insurance than life insurance, State Farm offers both term and whole life coverage. This company is second place in customer satisfaction, just two points behind Northwestern Mutual. It’s not one of the biggest companies for life insurance out there, but there could be incentives for current customers.
Since it offers other types of insurance, there could be discounts available for customers with other policies. Data from ValuePenguin shows that the typical customer with a life insurance policy over $125,000 could get an 8% discount on their auto policy by bundling.
State Farm’s life insurance isn’t the cheapest available, however, for longer-term, 30-year coverage. For our sample 35-year old woman, a 30-year policy would cost about $28 per month. However, for shorter terms, coverage gets significantly less expensive: a 20-year policy would cost $19 per month. While it’s true for many other insurers that a 20-year policy would be cheaper than a 30-year policy, State Farm has a significant difference between the two policies in this example. State Farm only offers 30-year terms for people under age 45.
Pros of a Nationwide term life policy
- Online pricing available
- Other insurance types (like homeowners, renters, and auto policies) available to keep all your insurance in one place
Cons of a Nationwide term life policy
- Didn’t make the top five for customer satisfaction
- Nationwide only offers one life insurance product, not much variety or customization.
Best for: People who want to bundle their life insurance coverage with other insurance types; anyone wanting a straightforward and online shopping experience.
In addition to auto, home, and many other types of insurance, Nationwide offers term life insurance policies. With good customer satisfaction scores and good credit ratings, Nationwide is a solid and stable choice.
Unlike many of the other big life insurance companies, Nationwide will give premiums online via email. And, their premiums are relatively reasonable — for our sample 35-year-old woman, a 30-year, $250,000 policy would cost about $23 per month. Plans are available in 10, 15, 20, and 30-year terms.
However, Nationwide only offers one life insurance product. It doesn’t offer multiple types of term life insurance policies or lots of different policy additions (riders.) But, that can be a good thing: It makes for a straightforward experience without over-complicating it. Nationwide’s life insurance is simple and easy to get online.
Mutual of Omaha
Pros of a Mutual of Omaha term life policy
- No medical exams for some policies with benefits of $100,000
- Online quotes available
- Sample quote came in as the most affordable
Cons of a Mutual of Omaha term life policy
- Policies over $100,000 require an agent to purchase
Mutual of Omaha has been around since 1926, and has grown to be a competitive life insurance company in terms of size, customer satisfaction, and in industry ratings.
There are two main types of term life insurance from this insurer: Answers and Express. The express policy does not require a medical exam.
Mutual of Omaha takes fifth when considering customer service rankings, company size, and credit rankings. But, in looking at prices, this company takes the gold. Of all of the companies that offered online quotes, Mutual of Omaha offered the lowest premium for a 35-year-old New York woman in excellent health for a 30-year, $250,000 policy, with a quote of about $21 per month, cheaper than Nationwide ($23 per month) and State Farm ($28).
Term vs whole life insurance
To start, you’ll need to decide what type of insurance you need. Two main types, whole and term life insurance, divide your options.
Whole life insurance is a lifelong policy that’s guaranteed to pay out eventually. But, it is about six to ten times more expensive than term life.
Term life covers a person for a set number of years, and is the most affordable. It’s ideal for families with young children, people with debt, or someone with dependents, but only pays out if there’s a casualty within that set period. For most people, term life insurance coverage is sufficient, and that’s the policy type we focused on while compiling this list.
How to figure out how much coverage you need
Traditionally, the rule of thumb is to get life insurance worth 10 times your annual income — so if you make $75,000 a year, you’d get $750,000 worth of coverage.
However, some experts consider that to be a low estimate, especially if you’d want your life insurance payout to cover your child’s college tuition, or if you have a mortgage on your home you’d want to pay off. Some people choose to get millions in coverage.
Generally, you’ll probably want to get as much life insurance as you can comfortably afford each month. If it would be a struggle to make your premium payments, it’s probably too much for you.
How to find the best price
Like any other type of insurance, term life policies have many factors that influence the price you’ll pay for coverage. Your age, health, location, and amount of coverage necessary will all change the monthly premium. The company you choose will look at all of these factors differently, leading to different prices for every company and each policy.
To get the best possible deal on life insurance, you’ll want to shop around and compare quotes. That may be simpler with some companies than with others, as some on this list don’t offer online quotes. But when available, comparing four or five quotes to find the best deal could be an effective way to save a few dollars each month on your premium. Since you’ll pay life insurance for 20 or 3o years, that savings will add up.
Business Insider collected data on 30 companies from S&P Global, JD Power, and the insurer’s own sites. Focused on customer satisfaction, financial stability ratings, and size of assets. When available, Business Insider also gathered sample premiums.
The JD Power 2019 US Life Insurance Customer Satisfaction Survey served as the basis of this category. Using the responses of over 6,000 life insurance customers, JD Power gathered information on customer’s happiness with the application process, communications and interactions with the company, product offerings, prices, and statements.
Financial stability ratings
Several companies and agencies rate the stability and outlook of insurance companies, including Moody’s, A.M. Best, and Fitch Ratings. Business Insider gathered ratings for each life insurance company from each of these three companies from S&P Global.
A scoring system was used to compile these ratings, adding the scores of the two most recent ratings for each life insurance company.
Size of financial assets
Business Insider obtained information on the biggest life insurance companies by asset size through S&P Global data.
Sample premiums were collected when available through company websites and through insurance comparison site Policygenius. Each used the same sample person, a 35-year-old single, nonsmoking female living in New York, with the same height and weight and excellent health. These sample premiums were calculated based on a $250,000, 30-year policy.
Do I need life insurance?
If you have dependents — that’s people who rely on your income, like children, a non-working spouse, or aging parents you support — you need life insurance. If you don’t have dependents but do have debt or own a business, you might also want to consider it.
What is the average cost of life insurance per month?
The cost of coverage varies by company, by policy, and by policyholder. A healthy 35-year old man can expect to pay about $49 per month for a 20-year term life insurance policy according to data from Policygenius.
But, many factors influence the price of life insurance. Your overall health, hobbies, gender, age, and the amount of coverage you need will affect the price you’ll pay for coverage.
Do I need term life insurance or whole life insurance?
Most people only need term life insurance, or coverage for 10 to 30 years. For families with young children, people with mortgages, or anyone with debt, this is usually the right choice. While the policy will expire eventually, it will expire after your debts are paid, and children are grown and on their own. It covers you when you have the most at stake. Generally, they cost between $20 and $40 per month, depending on your health and the age when you start.
Whole life insurance, however, works differently. This policy is significantly more expensive on a monthly basis, but is guaranteed to pay out when you die, no matter your age. While it does help protect your family from final expenses and other costs, this policy is also meant to leave a financial legacy, donate to charity, or build an inheritance for family. Whole life insurance can cost six to 10 times more per month than a term policy.
For most young families, a term life insurance policy is enough coverage to protect your family while still being affordable. If you’re unsure of which type of policy best suits your family, you might want to consult a financial planner.
How do I get life insurance?
There are a few ways to approach getting life insurance once you’ve decided how much coverage and what type of policy you need.
You can find policies through these insurers, or through online agencies, which are backed by major insurance companies. Online agencies let you bypass the need for an in-person insurance agent, and often offer the ability to get a quote and buy your own policy entirely online.
If you want to go the more traditional route, you can work with an agent. With some of the companies above, like Northwestern Mutual, you’ll need to work with an agent to get a policy. Companies will generally either help to connect you with an agent or provide a list of agents in your area.
If you’re working with a company that doesn’t require an agent, you can go ahead with the application process yourself. After completing some questions about your health history, hobbies, and travel plans, you may be asked to complete a medical exam. If so, you may make arrangements with a paramedical examiner to meet you at your home. However, some companies are changing their medical exam policies due to COVID-19. Talk with your prospective insurer to arrange an exam you’re comfortable with.
After completing these steps and being approved by the insurer, you’ll get your final monthly payment. From there, you’ll start paying for your policy and have your coverage in place.