The Best Term Life Insurance Companies
Term life insurance is an ultra-affordable, must-have product in your financial playbook. If you are married, have children, or anyone else depends on your income, having term life insurance helps them should something happen to you.
Because term life is a relatively affordable policy, especially compared to other insurance products we are used to paying for, this has paved the way for many insurance companies to offer it in their product portfolio. But just because lots of companies offer term life, doesn’t mean they’re all the same.
If so many insurance companies offer term life, then what makes one better than the other? We took a look at several areas for each of these companies:
- Customer service rating
- Financial strength rating
- Average pricing
- Options for policies
- Any other perks we should know about...
We’re pretty sure you’ll recognize many of the names on this list, but there may be one or two you’re not familiar with. Here’s our list of best term life insurance companies and what makes them rise to the top for us.
- Overview of the best term life insurance companies
- Best term life insurance companies summary
- The bottom line
Overview of the best term life insurance companies
Here is our list of the best term life insurance companies, and who we think the company is best suited for.
|State Farm||Highest in overall customer satisfaction|
|Northwestern Mutual||Working with an advisor|
|MassMutual||Using a mutual company|
|Nationwide||Lots of term life options|
|New York Life||Yearly increments with terms|
|Guardian Life||Large range with age of issue|
|Haven Life||Online, commission-free experience|
|John Hancock||Largest death benefit available|
|Pacific Life||5-year increments in policies|
|Mutual of Omaha||Straightforward policies|
Review of the best term life insurance companies
More than a good neighbor, State Farm proves it’s there for you with a variety of term life insurance policies. State Farm ranks the highest in the JD Power 2020 Life Insurance Study for Overall Customer Satisfaction, easily outranking all other insurance carriers.
State Farm may be best known for auto insurance, but it offers a range of term life options too. With State Farm’s Select Term policy, you can choose between a 10, 20 or 30-year term. Policy benefits begin at $100,000.
State Farm offers a budget-friendly term life option called the Instant Answer® where you can find out in seconds if you qualify. The benefit is $50,000 for a max of a 10-year term. You also have the ability to convert your term life to a whole life policy.
State Farm not only offers several options for term life, but it’s financially strong with a Superior A++ rating from A.M. Best. Overall, State Farm offers great customer service with a strong financial outlook which is why it gets our top spot.
Founded in 1857 and headquartered in Milwaukee, Northwestern Mutual offers a multitude of insurance products. Northwestern is a traditional life insurer, and you need to work with a salesperson to get a policy written.
Northwestern Mutual offers several options for term life, starting at $100,000 death benefit. Policies are available for customers ages 18 to 65. Northwestern uses different terminology for their policy terms. The term life policies are referred to as Level Term, meaning the life insurance cost will be the same every year. You can purchase in 10- or 20-year terms.
Northwestern Mutual term life policies do offer the ability to convert to a whole life policy. You can even do so without being subject to a medical exam. You will need a medical exam to secure a term life policy.
With Northwestern Mutual, you’re getting a company with strong financial ratings, with a Superior A++ A.M. Best rating. Not only does it receive an A+ BBB rating, but it’s also one of the top-ranked insurance companies in the JD Power 2020 Life Insurance Study for Overall Customer Satisfaction. Proving this company may be old, but it still has high customer loyalty.
MassMutual (short for Massachusetts Mutual Life) is one of the oldest and largest insurance providers. Founded in 1851, MassMutual offers a variety of term life insurance products. Since it’s a mutual company, it’s owned by the policyholders which means you may qualify for a dividend payout.
MassMutual has a program called DirectTerm. It’s a term life policy you can apply for from ages 18-64. Benefit payouts start at $100,000. You also have the ability to convert to a whole life policy later on.
With DirectTerm, you apply online for a term life policy. If you’re approved, your coverage begins immediately. If you’re not approved right away, you have to take a medical exam within 90 days. Once the exam results come through, your life insurance rate is finalized and you can proceed or cancel.
MassMutual may struggle a bit on the customer service front. Currently, it has a B- rating with the BBB. It’s also barely ranked above the industry average with the JD Power 2020 Life Insurance Study for Overall Customer Satisfaction. But with a Superior A++ A.M.Best rating, MassMutual continues to show its strength year after year.
Nationwide is an insurance giant, and like State Farm, is known mostly for car insurance. But Nationwide offers an impressive lineup of term life insurance options.
Nationwide’s term life policies come in 10-, 15-, 20-, or 30-year terms. Benefit payouts start at $100,000. Whether you’re 18 or 70, Nationwide has a policy that can likely offer you some sort of coverage. You can also convert your term life to a whole life policy without any fees or additional medical exams.
You do have to purchase term life through an agent. You’ll be subject to a medical exam for the approval process too. But Nationwide does have some of the most numerous coverage options available for your term life policy.
Nationwide has the financial stability and strength with an A+ rating from A.M. Best. It also has an A+ rating with BBB and ranks third overall in the JD Power 2020 Life Insurance Study for Overall Customer Satisfaction.
New York Life
New York Life is also a mutual company, which means it’s owned by its policyholders. This 175-year-old company headquartered in New York offers several term life policy options.
One of the best features of the term life policies from New York Life is the ability to purchase in yearly increments for the yearly convertible policies. Or you can purchase in 10- or 20-year terms if you want a level premium policy (where your premium payments stay the same over time).
New York Life requires you to purchase through an agent, but there are several digital tools available for your use. Tools such as an amount of coverage calculator, customer service contact, and document processing, although this isn’t as extensive as other company’s offerings.
New York Life has strong financial ratings with an A++ A.M.Best rating. It also earns an A+ rating with BBB. New York Life also has a strong showing on the JD Power 2020 Life Insurance Study for Overall Customer Satisfaction, coming in sixth overall.
Guardian Life is another mutual company entry on our list of best term life insurance companies. Guardian offers a wide range of term life policies, including the ability to convert to permanent insurance.
Like most other companies, you can get a life insurance quote online with Guardian, but you have to work with an advisor to finalize your policy. Guardian does offer a variety of ways to customize your policy, including additional riders (benefits).
Term life options come in 10-, 15-, 20-, or 30-year terms. The death benefit is different from many other carriers, with a range of $250,000 to $3,000,000. However, you can purchase a policy between the ages of 18, all the way up to age 75.
One special option for Guardian life term life policyholders is the ability to activate a no-cost rider that will add an extra 1% to your death benefit and will be paid to the charity of your choice. Guardian has a Superior rating of A++ from A.M.Best but is well-below industry average in the JD Power 2020 Life Insurance Study for Overall Customer Satisfaction.
Haven Life is the new kid on the block compared to the age of the other insurance elders on this list, but there’s a reason Haven continues to gain in popularity. Haven takes away the hassle of working with an agent for your term life policy by offering an online alternative.
But just because it’s a young insurance company doesn’t mean it doesn’t have the power behind it. MassMutual backs Haven Life’s policies, and with MassMutual’s A++ Superior A.M.Best rating, that’s what I call a strong backing.
Haven’s term life policies come in 10-, 15-, 20-, or 30-year terms, and the death benefit ranges from $100,000 to $3,000,000 for ages 18-64. Haven is limited with its offerings of riders and benefits and only offers term life insurance, without the option to convert.
If you’re looking for a simple, online experience for your term life policy, plus the backing with the strength of MassMutual, then Haven Life should go to the top of your list of considerations.
You likely remember John Hancock and the commercials with the fancy handwriting. Turns out, John Hancock offers term life policies for everyday people too. John Hancock allows you to make some policy purchases online, but for the larger policies, you will need to work with an agent.
John Hancock gets the award for the largest death benefit possible with term life policies. You can choose one starting at $25,000 up to $65,000,000. Policies are available in 10-, 15-, or 20-year terms. You do not have the option to convert to whole life, although there are programs for converting to universal coverage.
One of John Hancock’s unique qualities is the Vitality Program. This is a program that rewards your healthy lifestyle and habits (like using a fitness tracker or going to a doctor). As a result, you’re possibly rewarded with discounts on life insurance premiums and other benefits.
John Hancock has an A+ rating with A.M. Best. The BBB rating is A+ but doesn’t fare as well with the JD Power 2020 Life Insurance Study for Overall Customer Satisfaction. The scores for John Hancock came in well below the industry standard.
Prudential is a well-known provider on our list. And while it struggles with the BBB rating (currently listed as a D), Prudential offers many options when it comes to term life insurance, not to mention it’s one of the largest insurance companies on our list for market share.
Prudential gives you the opportunity to tailor your term life to exactly what you need. For starters, you can purchase in 10-, 15-, 20-, or 30-year terms. Policies start at $100,000 but you can work with an agent to customize a higher amount. You should note, policies can convert to a whole life option without any fees or medical exams.
Prudential offers several riders to further tailor your policy, including accidental death and children’s protection.
Prudential has an A+ rating from A.M.Best. and scores slightly below industry average for the JD Power 2020 Life Insurance Study for Overall Customer Satisfaction.
Founded in 1904, in lovely San Francisco, Transamerica offers several options for term life policies, with some of the most flexible terms and benefits on our list.
There are two term life options available for purchase: Trendsetter LB and Trendsetter Super Series. The Super Series allows you to convert to a permanent policy later on. The LB version is short for Living Benefit and allows you to receive an accelerated death benefit due to an illness.
Transamerica policies come in 10-, 15-, 20-, 25-, and 30-year terms. The death benefit for the Trendsetter LB policy starts at $25,000 and moves up to $2,000,000. Another policy option, the Trendsetter Super Series, allows you to carry up to a $10,000,000 benefit. Interestingly, Transamerica offers policies up to 80 years old, the highest age available on our list.
Transamerica requires you to work with an agent for everything, although you can get a quote for the Trendsetter Super series online.
Pacific Life was founded in 1868 in California, where it continues to be headquartered today. Pacific Life is one of the many mutual companies on our list and pays dividends on some financial products at the end of the year.
Pacific Life offers two main options for term life: Promise Term and Elite Term. Each option has various levels of terms and benefits. You can obtain coverage in 5-year increments for both options. Pacific Life offers coverage from age 18 up to 75.
Both options require you to work with an agent to finalize the quote and application process. The agent can work with you on which option is best since both have conversion options and other riders to choose from.
Pacific Life has a strong, A+ A.M. Best rating. Equally impressive is Pacific Life’s rank with the JD Power 2020 Life Insurance Study for Overall Customer Satisfaction, which comes in 7th overall.
Mutual of Omaha
Founded in 1909 in Omaha, Nebraska, Mutual of Omaha offers an array of insurance and financial products, including term life.
Mutual of Omaha’s term life policies are offered in 10-, 15-, 20-, and 30-year terms. The death benefit starts at $100,000 and can be customized for your term life needs. Ages 18 to 80 will be able to find some type of term life benefit through Mutual of Omaha.
You can get an online estimate with the company, but you’ll have to work with an agent to finalize your quote and application - including a medical exam.
Mutual of Omaha has a strong, A+ A.M. Best rating. Equally notable is it's very high rank with the JD Power 2020 Life Insurance Study for Overall Customer Satisfaction, which comes in fifth overall.
Bestow is unlike other term life companies because it’s our only entry considered online-only. Bestow only offers term life policies and uses artificial intelligence to perform the underwriting. The result? You can get a quote in seconds and literally be approved within minutes.
Oh, and did I mention there’s no medical exam required either? Bestow makes the process of purchasing term life insurance about as easy as possible. You answer a few questions and you’re on your way. It’s as simple as it gets.
Bestow doesn’t only offer convenience though. The policies are issued by North American Company for Life and Health Insurance™. The policies are then reinsured by Munich Re, which further guarantees payment of the policies. Both companies have strong, A+ financial ratings from A.M. Best. Bestow also has an A+ rating from BBB, and is accredited by them.
Bestow is limited in options, with only 10-year and 20-year terms available. But you can select policies with payouts ranging from $50,000 to $1,000,000. If you’re between the ages of 21-55, and you can’t stomach the thought of going through a medical exam, then Bestow may be your answer.
Best term life insurance companies summary
|Insurer||A.M. Best rating||BBB rating||Death benefit||Policy range||Convert to permanent||Cost|
|Northwestern Mutual||A++||A+||$100k+||18-65||Yes||Must contact advisor|
|New York Life||A++||A+||$10k+||18-75||Yes||$10.75|
|Guardian Life||A++||A+||$250k to $3m||18-75||Yes||$10.00|
|Haven Life||A++||A+||$100k to $3m||18-64||No||$10.93|
|John Hancock||A+||A+||$25k to $65mn||N/A||No||$11.29|
|Transamerica||A||A-||$25k to $10m||18-80||Yes||$8.39|
|Mutual of Omaha||A+||A+||$100k+||18-80||Yes||$11.83|
|Bestow||A+||A+||$50k to $1m||21-55||No||$11.25|
Sample cost female,age 25, non-smoker, $250,000, 10-year benefit
What is the difference between term life and whole life insurance?
There are multiple types of life insurance. As the name implies, term life is life insurance you have for a set term length, for example, 20 years or 30 years. When the time ends on the policy, there is no monetary value and the insurance ends. Whole life, or permanent life insurance, is life insurance coverage that lasts your entire life. This type of life insurance holds cash value and is an investment in which you can borrow from its value. Because of these factors, this type of policy has higher monthly premiums. However, if you are in excellent health when you start your policy, say at age 30, the policy stays intact you will not have to undergo any additional medical tests.
It's important to weigh both options: Term life is cheaper and is often used by young parents to ensure their children are protected and end when the child becomes an adult. Should you decide to convert it into permanent coverage, you will have to undergo new medical tests and insurability testing, which at an older age could result in much higher premiums than if you choose whole life while younger.
How much life insurance should I purchase?
How much term life insurance you need depends on many factors, including the amount of debt and mortgages you owe and your annual income. Another general rule for life insurance needs is to have at least 5x your annual income. But ultimately, it’s a personal decision... do you want to cover only final expenses or do you want to truly provide for your loved ones?
Will any of these companies pull my credit if I apply for a policy?
Whenever you submit your application for term life, the insurance company will perform a soft pull on your credit. The underwriters are looking for information related to your payment history to determine your risk. A soft pull doesn’t have much impact to your overall credit rating if any.
Do I have to have a medical exam?
Almost all companies (except two - Haven and Bestow) on our list require a medical exam. Some companies may allow you to forego a medical exam based on how you answer your health and medical history questionnaire.
Why should you use the best term life insurance companies?
If you are ready to purchase a term life policy, it helps to have a place to start. In order to ensure you’re getting the best premium price possible and the exact coverage you want, then you need several quotes.
Having several quotes in hand makes good financial sense. It allows you to compare head-to-head, or see where you might have gaps in your policy. With our review, we’ve helped take some of the guesswork out of researching the various companies.
The bottom line
As you can see, there are several fantastic companies to work with when it comes to term life. Whether you’re looking for an innovative online-only experience, or want the years of experience to work with, you’ll be able to secure the best term life policy in little time.