Best Whole Life Insurance – An Investment for Your Family
If you’ve ever spent time shopping for whole life insurance, you quickly realize there are numerous carriers ready to take your quote and get you set up. Whole life insurance is an insurance product that has been around for years, and it’s often only sold through the traditional manner of working with an insurance agent.
Unlike term life insurance, which has a set number of years you pay premiums and a death payout is given, whole life (as the name implies) is designed to last throughout….well, your entire life!
Also known as permanent life insurance, whole life insurance can get complicated as you’re working your way through the details. And the premiums for whole life insurance change as you make changes to the policy with the agent. Because you’re purchasing a product that has cash value or you could borrow against one day, it’s super important to not only understand what you’re signing but trusting the life insurance provider you’re working with.
Let’s jump right into it. What are we looking for when we say an insurer is the best? We looked at several key factors for these whole life insurance companies. Factors like:
- Customer service
- Financial stability
- Policy customization
- Digital assets
- Overview of the best whole life insurance companies
- Summary of the best whole life insurance companies
- The bottom line
Overview of the best whole life insurance companies
Here is our list of the best whole life insurance companies, and who we think the company is best suited for.
|State Farm||Great customer service|
|Northwestern Mutual||Accessing cash-value of a policy|
|MassMutual||Complex financial needs|
|Guardian Life||Numerous policy options|
|New York Life||Simplified options|
|Mutual of Omaha||Older applicants who need a supplemental policy|
|Pacific Life||Business planning and workplace options|
Best whole life insurance companies
State Farm may be well-known for auto insurance, but you might be surprised to learn State Farm offers several whole life policies too. State Farm ranks the highest in the JD Power 2020 Life Insurance Study for Overall Customer Satisfaction, outranking all other insurance carriers with its impressive customer satisfaction score.
State Farm offers three main options under the permanent policy umbrella:
- Limited Pay Life Insurance. This is a policy that builds cash value over a lifetime, but the premiums are set up in terms. Basically, you pay for the lifetime policy within a set number of years, so you don’t have to worry about a payment when you’re older. The terms are 10, 15, or 20 years. Death benefit starts at $50,000.
- Single-Premium Life Insurance. This is a whole life policy where you only pay one premium and never any additional payments. This type of policy starts with a $15,000 death benefit and is available for ages 0 to 80.
- Final Expense. An affordable policy offering $10,000 towards burial expenses. You can only purchase $10,000 worth and are issued from ages 50-80 (50-75 in New York).
Some policies can be further customized by adding these riders:
- Waiver of premium for disability. Where your premiums are waived if you become disabled.
- Payor insurance. Same as waiver of premium for disability rider, but specifically for the premium on a child’s life insurance policy.
- Guaranteed Insurability option. You can purchase additional insurance benefits without another medical exam. Ideal for younger policyholders who want to increase the benefits as they get married and have children.
One word of caution, because State Farm offers so many options with the whole life policies, you may find it overwhelming. It’s best to ask the agent lots of questions and never feel pressured to add something you’re not sure will benefit you.
State Farm not only offers several options for permanent life insurance policies but proves it’s financially strong with a Superior A++ rating from A.M. Best. Overall, State Farm offers great customer service and continues to show a strong, stable financial outlook. State Farm also gets top marks for online tools and upfront availability of information.
Northwestern Mutual is a well-known, industry giant founded in 1857 and headquartered in Milwaukee. Northwestern Mutual not only offers whole life policies but a variety of other products as well. With Northwestern, you must work with an agent for both a quote and the application, so keep this in mind for planning purposes.
Northwestern Mutual offers one whole life policy called Whole Life Plus. You can open the policy with as little as a $50,000 death benefit. The policy comes with a lifetime of life insurance coverage (assuming policy owners pay the premiums). Your premiums are guaranteed to stay level.
The Whole Life Plus policy offers several riders to enhance your policy, including:
- Waiver of premium benefit
- Additional purchase benefit
- Accelerated care benefit
Northwestern Mutual’s policy is guaranteed to grow over time. Your earnings grow tax-deferred over time. With Whole Life Plus, you can access your tax-deferred cash value throughout your lifetime. If for some reason you must cancel or surrender the policy, the cash value is still yours.
Northwestern Mutual is a company with strong financial ratings, including a Superior A++ A.M. Best rating. In addition to the A+ BBB rating, it’s also one of the top-ranked insurance companies according to the JD Power 2020 Life Insurance Study for Overall Customer Satisfaction. Customer loyalty is consistently high with Northwestern Mutual and has a solid customer service reputation.
New York Life
One of the oldest insurance companies around, New York Life is 175 years old and still going strong. It’s also a mutual company, which means it’s owned by its policyholders. New York Life has paid dividends to the owners almost every year in its long history.
There are three options for whole life policies:
- Value Whole Life. The policy offers a death benefit starting at $20,000, but the cash value grows at a slower rate compared to the other two whole life policy choices.
- Whole Life. This is a policy that can build cash value and allows you payment and premium flexibility throughout the life of the policy. Death benefit starts at $25,000.
- Custom Whole Life. A policy that features a custom period where you pay your premium but still has lifetime coverage from the policy. The premium can be paid in 5 years but can’t be after age 75. Death benefit starts at $50,000.
New York Life also provides the following riders, for any additional policy needs:
- Disability waiver of premium
- Children’s insurance
- Option to purchase paid-up additions
- Living benefits option
- Accidental death benefit
- Chronic care option
New York Life requires you to purchase through an agent, but there are several digital tools available for your use. Tools such as a coverage amount calculator, customer service contact, and document processing, although this isn’t as extensive as other companies 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.
MassMutual (short for Massachusetts Mutual Life) is one of the oldest and largest insurance providers. Founded in 1851, MassMutual is a mutual company and because it’s owned by the policyholders, you may qualify for a dividend payout depending on which financial product you have.
MassMutual requires you to get life insurance quotes and go through the entire application process with an agent. There are very few online tools with MassMutual, so as long as you enjoy using the traditional agent approach, then you’ll get the information you need through them.
MassMutual offers 10 different whole life policy options, not including riders you may add. There are numerous policy choices with the main difference between each of them being the age requirements, death benefits, and cash value.
- Legacy 100
- Legacy 65
- Legacy 20
- Legacy 15
- Legacy 12
- Legacy 10
- Legacy HECV
- Survivor Legacy 100
- CareChoice Select Hybrid Life
- CareChoice One Hybrid Life
The following riders are available for all the whole life policies, except the CareChoice Hybrid Life options.
- Waiver of premium
- Additional life insurance
- Life insurance supplement
- Long-term care access
- Renewable term
- Guaranteed insurability
- Transfer of insured
- Accelerated death benefit
- Yearly term purchase
- Accelerated death benefit for terminal illness
- Estate protection
- Policy split option
- Survivorship additional life insurance and supplement
- Waiver of premium on death of specified insured
As you can see, the sheer number of choices with MassMutual means it’s likely it can provide for even the most complicated of family and financial circumstances.
Where MassMutual struggles compared to others on our list is on the customer service front. Currently, it has a B- rating with BBB. MassMutual barely ranks 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, this mega-insurance giant continues to show its financial strength year after year.
Guardian Life is yet another mutual company entry that made our list of best whole life insurance companies. Like most other companies, you must work with an advisor to finalize your policy with Guardian. And while Guardian has helpful information on their website about life insurance, you won’t find much detail on whole life without working with an agent.
Guardian’s whole life policies can be borrowed against and the level premiums are guaranteed throughout the life of the policy. No matter what your income goal is, or your current budget, Guardian offers different premium payment plans and benefit options.
Guardian does offer a variety of ways to customize your whole life policy, including additional riders such as:
- Index participation feature
- Long-term care
- Waiver of premium
- Guaranteed insurability option
- Paid-up additions
Guardian also offers something called Guardian EstateGuard, which allows two people (a couple) to be on one policy. If you’re interested in this feature, ask to see if your whole life policy would qualify.
Guardian’s whole life policies are eligible for dividend payments. Beyond the whole life policies, 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.
Mutual of Omaha
Founded in 1909 in Omaha, Nebraska, Mutual of Omaha offers an array of insurance and financial products, including whole life.
Mutual of Omaha offers two types of whole life policies that are targeted towards older applicants. The best part about these whole life policies? No medical exam is required. This can be a huge relief for those who want a simple whole life policy, without jumping through a whole bunch of hoops.
- Guaranteed Issue. This is a policy where you have guaranteed coverage and a death benefit ranging from $2,000 to $25,000. This is guaranteed coverage without any health questions.
- Living Promise. This is a policy where the death benefit range is $2,000 to $40,000, but medical questions are asked.
All policies never have reduced benefits or increased premiums. Both policies accumulate cash value that you can access if you need. These are great supplemental options if you already have other life insurance policies in place.
Mutual of Omaha has a strong, A+ A.M. Best rating. The fifth overall rank with the JD Power 2020 Life Insurance Study for Overall Customer Satisfaction, helps Mutual of Omaha earn a spot on our list of best whole life insurance companies.
Pacific Life was founded in 1868 in California, where it continues to operate today in Newport Beach. Pacific Life is one of several mutual companies on our list. Pacific Life does dividends on some financial products at the end of the year to its policyholders.
Pacific Life’s whole life insurance policy offers fixed premiums along with guaranteed growth with interest rates. An agent can work with you to tailor the policy for your business planning needs too, not just family considerations.
Pacific Life offers one policy, the Flex 16. You have to work with an agent to get all the details surrounding death benefit, age limitations, and other options.
Currently, you can add the conversion rider (where you can convert your policy without a medical exam) to your whole life policy. There is a possibility of adding a disability waiver of premium and accelerated death benefit to your policy, check with your agent.
Pacific Life performs well on our list because of its 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.
Summary of the best whole life insurance companies
|Insurer||A.M. Best rating||BBB rating||Death benefit||Range||Guaranteed growth in cash value|
|State Farm||A++||A+||Starting at $10,000||0-80||Yes|
|Northwestern Mutual||A++||A+||Starting at $50,000||0-85||Yes|
|New York Life||A++||A+||Starting at $20,000||0-90||Yes|
|MassMutual||A++||B-||Starting at $25,000||0-90||Yes|
|Guardian Life||A++||A+||Starting at $25,000||0-90||Yes|
|Mutual of Omaha||A+||A+||Starting at $2,000||45-85||Yes|
What are riders and why do I need them in a policy?
A rider is simply insurance-speak for additional benefit. Riders are designed to help you customize your policy and ultimately increase your financial protection. Many riders are no-cost or cost very little to add-on, so if you feel there’s a chance you could use the benefit, then you should take advantage of them.
What does guaranteed-renewable mean?
You will see the term guaranteed-renewable quite a bit throughout whole life policies. Although it sounds complicated, the concept is pretty straightforward. Guaranteed-renewable means as long as you pay your premiums, the insurance company will keep insuring you. This does NOT mean your premiums won’t increase, it only means you’re guaranteed to continue receiving coverage.e
Why do I have to work with an agent?
As you can probably tell from the information above, whole life policies can get complicated. You have so many options, riders, premiums, choices….it’s mind-boggling. Working with a good agent means you have someone explain all the insurance terms to you and ensures you are aware of all your options.
Can I afford a whole life policy?
It’s true, the premiums for whole life policies can get pretty pricey. This is because it lasts so long and is an investment with cash value you can borrow against. Your life insurance premiums will depend on your age — the older you are, the higher they will be — and your health. Those in good health will have lower premiums; those in poor health with pre-existing conditions will have higher pricing. These two reasons alone are why purchasing whole life while you are young and healthy makes a great investment.
The best option to get the best price is to make sure you do the following:
- Get several quotes. Whole life insurance rates are vastly different among the different insurance companies.
- Look for a rider that allows you to purchase additional coverage at a later time, such as a guaranteed insurability option. You can purchase more as you earn more money and your family needs change.
- Choose insurance companies with a wide variety of policy choices, often with more budget-friendly options.
- Purchase your policy while you’re young and healthy if possible. This will keep your premiums lower.
- Consider a term life policy. Term life is very affordable and rates are competitive. It’s a great option if you don’t need access to a cash value policy and you only want a policy for a specified amount of time.
Why should you use the best whole life insurance companies?
Purchasing a whole life insurance policy takes time and energy. It’s definitely not something you can rush into or purchase without reviewing all the facts. That’s why it’s so important to work with reputable companies who can explain all of your choices and the life insurance costs depending on the amount of coverage, your financial obligations, your average health, and all of the insurance options that may suit how much life insurance you need to provide for your loved ones.
Use this list to help narrow down your options but have confidence that you’re starting in the right place.
The bottom line
Our list of best whole life companies includes many well-known, well-established companies. But it takes a lot to maintain such strong reputations in the life insurance industry and continue to earn customer’s trust. After all, you’re trusting these companies with potentially a large amount of money each year.
State Farm is our No. 1 pick for whole life because of the information available online and through the huge network of agents, strong customer service ratings, and an equally strong financial backing. State Farm makes this complicated task of finding the right whole life insurance policy a little bit easier.