Shopping for life insurance can be stressful. Products are expensive and complicated—and let’s face it, no one likes to think about the events before the potential payoff.
But if you want to make sure your family is protected, life insurance is a must. And while many Americans get some life insurance through their employers, this coverage is usually minimal. In fact, less than half of Americans were “quite a bit” confident or better their coverage was adequate to cover beneficiaries’ needs, according to a recent survey by the National Association of Insurance Commissioners, or NAIC.
To help you find the right life insurance policy, we considered offering from nearly two dozen different insurers. Looking at everything from the type of policies they offered to coverage amounts and customer service.
Read on below to find out more about how we picked.
Why We Picked It: When it comes to life insurance, State Farm is one of the largest insurers in the country by dollar value of premiums written. Large companies like State Farm have proven track records of financial stability and reliability—particularly important qualities when you’re dealing with life insurance, since you may not collect on the policy for decades. And State Farm stands out from other large competitors based on its reputation for customer service, policy options and available insurance riders.
State Farm was the top-ranked company in the 2022 J.D. Power Individual Life Insurance Study, and it has won multiple Webby awards for its customer-friendly mobile app. In fact, the app has a 4.8 rating out of five on Apple’s App Store based on over 500,000 reviews. Customers who prefer in-person help can also meet with an agent; State Farm has over 19,000 agents in the U.S.
Whether you’re looking for a simple policy to provide for your family when you’re gone or want a more flexible policy for estate planning, State Farm has a number of options. Whereas other companies may only offer one type of life insurance, State Farm sells both term and permanent coverage, and it even has some policies that provide coverage without medical exams. And unlike other large companies, State Farm allows you to get quotes and even apply for some forms of coverage online.
State Farm also has several optional riders you can add to your policy to customize your coverage, including riders that provide coverage for your children and long-term care expenses. For people who need more robust coverage, the ability to enhance your policy with riders is a significant benefit.
Regarding pricing, we requested quotes from State Farm for term life coverage, and its premiums were competitive with industry averages as reported by LIMRA, a research company focused on the life insurance industry. And if you are an existing State Farm customer, you may be able to qualify for lower premiums through multi-policy discounts.
Caveats: Although State Farm is a national company, it’s not licensed to sell life insurance in Massachusetts. If you live within that state, you’ll have to work with another insurance company.
State Farm only offers online quotes for term life insurance. To get information about other options, you’ll need to contact an agent—a common issue with companies that sell permanent life insurance. And while State Farm does have some simplified-issue products that don’t require medical exams, their coverage maximums are low—typically $50,000 or less. You’ll have to undergo a medical exam or find another insurer if you need more substantial coverage.
Best Term Life
Why We Picked It: Term life coverage is popular because it’s significantly cheaper than permanent insurance. It provides coverage for a limited time, such as 10 to 30 years, rather than lasting for your lifetime. When it comes to term life coverage, Prudential edges out the competition due to the number of term life options it offers and its higher-than-usual coverage maximums.
Prudential has three term life options:
- SimplyTerm: This policy provides simplified-issue coverage up to $1 million without a medical exam, a higher maximum than many other companies offer.
- PruTerm: PruTerm gives coverage for just one year at a time, an ideal option for those that need to fill a temporary life insurance gap.
- Term Essential: For those that need more substantial term coverage, Term Essential can be used to provide between $1 million and $65 million in coverage. Many other companies max out at $2 million or less.
While other companies may require customers to contact an agent for quotes, you can get an instant quote online for SimplyTerm and Term Essential coverage.
Prudential’s term life policies also have several optional insurance endorsements, also known as riders, that can customize your policy. For example, you can add accidental death benefits so that your loved ones receive a larger death benefit if you die due to a covered accident, such as a car accident or drowning.
Caveats: While Prudential has several appealing term life insurance options, only its SimplyTerm option is available without a medical exam. Prudential’s other life insurance policies are fully underwritten and require a physical exam and blood work.
Prospective customers should also be aware that more complaints have been submitted to NAIC about Prudential’s individual life insurance segment than is typical for a company of its size.
A Prudential spokesperson said those stats don’t include policies written by all of its geographic units and if it did, the ratio would improve. “Prudential takes all customer complaints seriously and always strives to deliver industry-leading experiences,” she added.
Best Permanent Coverage
Why We Picked It: Northwestern Mutual could be a good choice for people who want the security of permanent life insurance that lasts for their lifetimes. Northwestern has more permanent coverage options than most insurers, including whole and universal life insurance policies with substantial death benefits and riders, and policyholders may also be eligible for dividends.
With whole life coverage, your policy can build cash value over time as you pay your premiums. Over time, you could take loans against the cash value or withdraw it to pay for major expenses or to supplement your retirement nest egg. Northwestern Mutual’s whole life policies have fixed premiums that never change and a guaranteed death benefit, so you know exactly how much your beneficiaries will receive.
While other companies have strict age limits on new applicants, Northwestern Mutual offers permanent coverage to new customers up until the age of 85—much higher than other companies.
Because Northwestern Mutual is a mutual company, policyholders are also eligible for dividends, an unusual perk that’s not available from every life insurer.
Caveats: Many insurance companies sell at least basic permanent life insurance policies that are guaranteed or “simplified issue,” meaning they don’t require medical exams. But all of Northwestern Mutual’s permanent life insurance policies are fully underwritten, requiring lab work and physical exams.
While other companies have online quote tools for permanent life insurance, Northwestern Mutual doesn’t have that feature. To get information about its pricing, you must contact an agent. For individuals who are shopping around and comparing quotes from several companies, that issue can be a frustrating drawback.
Best Guaranteed Issue
Mutual of Omaha
Why We Picked It: If you have a history of medical issues, such as high blood pressure or diabetes, getting life insurance coverage can be challenging. Guaranteed issue policies provide basic, permanent coverage, and you can’t be denied because of your medical history.
Not all life insurance companies sell guaranteed issue policies, and those that do usually specialize in only that type of coverage. By contrast, Mutual of Omaha is a leading life insurance company—it’s in the top three in terms of customer satisfaction in the J.D. Power Individual Life Insurance Study—and you can get up to $25,000 of guaranteed issue coverage.
While other forms of insurance can take weeks to go into effect, you can apply for coverage online in as little as five minutes with Mutual of Omaha. As soon as you pay your premium, the policy is active.
Mutual of Omaha’s guaranteed issue policy is available to people up to 85 years of age, a higher age maximum than other companies allow.
Caveats: Mutual of Omaha’s guaranteed issue policies aren’t eligible for insurance riders, so you can’t get coverage for a spouse or add terminal illness coverage to your policy.
Although Mutual of Omaha could be a useful option if you want guaranteed issue coverage, it doesn’t offer other forms of whole life insurance. Those that want permanent coverage with a higher death benefit will have to work with another insurer that offers larger whole life policies.
Best Coverage Without a Medical Exam
Haven Life, a subsidiary of MassMutual
Why We Picked It: With most forms of life insurance, you have to undergo a medical exam. And some forms of coverage that don’t require medical exams, such as guaranteed issue policies, are only for certain age groups and are very limited in size—usually $25,000 or less. But with Haven Life’s Haven Simple term life policy, you can get up to $500,000 in coverage without a medical exam with a term as long as 20 years.
Haven Life’s policies include level premiums, so you don’t have to worry about your premiums increasing over time. While most companies charge extra to add an accelerated death benefit rider to your policy, Haven Life includes accelerated death benefits at no additional cost. (See below for more information on accelerated death benefits.)
Caveats: Although Haven Life doesn’t require medical exams, its policies are different from guaranteed issue coverage in that not everyone will qualify for coverage. Haven Life uses a simplified issue model, meaning it still looks at your medical history, weight and prescription records to determine your eligibility. Those with significant existing health issues won’t qualify for coverage.
The Haven Simple product isn’t available in all states; residents of California, Delaware, New York, North Dakota and South Dakota are ineligible for this policy. You also have to be between the ages of 20 and 55 to qualify for coverage.
More Life Insurance Options to Consider
Globe Life was in the top two companies in terms of customer satisfaction in the J.D. Power study. However, Globe Life offers very limited coverage options; the maximum amount of term life coverage is just $100,000.
Northwestern Mutual is a top-ranked company in terms of customer satisfaction in J.D. Power’s study, and it offers a variety of life insurance options. However, it provides limited information about its policies online, and it doesn’t have an online quote tool or application. To find out details about available coverage, riders and cost, prospective customers have to work with an agent.
J.D. Power ranked Pacific Life in the top five in its customer satisfaction study, and Pacific Life sells both term and permanent coverage. While other companies allow customers to get quotes and even apply for term life insurance online, Pacific Life doesn’t have that option. Those looking for a quick and easy application process may be frustrated by having to go through an agent to get coverage.
Unlike the other companies on our list, Sproutt is an insurance broker. When you submit your information, it will find you quotes from multiple life insurance companies. Sproutt allows you to purchase term, guaranteed-issue, whole and universal life coverage through its platform. However, Sproutt wasn’t one of our top picks because it does not share which insurance companies it works with and specific details about available policies are very limited online.
Life Insurance FAQs
Before purchasing a policy, check out these questions and answers to learn the fundamentals of life insurance.
What are the main types of life insurance?
Although there are several forms of life insurance, they can be broken into two main categories:
- Term: As the name implies, term life insurance is temporary. When you purchase a term life policy, you only have coverage for the policy’s term, which is usually between 10 and 30 years. Your beneficiaries only receive the policy’s death benefit if you pass away during the policy’s term. If you die after it expires, they don’t receive any payout.
- Permanent: Permanent life insurance lasts for your lifetime as long as you keep up with the policy’s premiums. As you pay your premiums, a portion of each payment may be set aside as the policy’s cash value. Over time, the cash value component can grow with interest, and some forms of permanent insurance allow you to invest the cash value to potentially grow it even more.
In general, term life insurance is significantly cheaper than permanent life insurance. For those that need coverage for a limited time, term life coverage can be a better choice. For example, you may not need life insurance once your home is paid off and your children are independent.
But there are situations where permanent coverage can be helpful. For example, if you have a child with a disability or significant medical care requirements, the permanent life insurance policy’s death benefit and cash value can cover their care. Or if you plan to leave your family a substantial inheritance, permanent life insurance can pay for some or all of the estate taxes they would owe.
Do all life insurance policies require medical exams?
Many people put off purchasing life insurance because they don’t want to deal with the hassle of medical exams and blood work. However, not all forms of life insurance require medical exams. There are several types of life insurance underwriting:
- Fully underwritten: Fully underwritten policies involve in-person physical exams and lab work.
- Accelerated issue: Accelerated plans don’t rely on physical exams. Instead, they use digital data and company algorithms to determine your eligibility for a policy. The premiums for accelerated issue policies are similar to the premiums for fully underwritten policies.
- Simplified issue: Simplified issue policies don’t require medical exams, but they do ask questions about your medical history and current health and review your prescription records. Simplified issue policies are usually more expensive than fully underwritten or accelerated issue policies.
- Guaranteed issue: Guaranteed issue, also known as final expense, policies are for people with known medical issues that are unable to qualify for other forms of life insurance. They do not require a medical exam, and you cannot be denied based on your medical history. They tend to be for small amounts—usually $25,000 or less—and are generally more expensive than other insurance options.
What are riders?
Riders, also known as insurance endorsements, are add-on benefits. Some riders may be included with your policy, while others are available for an additional cost. Common riders include:
- Accelerated death benefit: An accelerated death benefit allows you to use a portion of your policy’s death benefit while you’re still living if you are diagnosed with a chronic or terminal illness. You can use the death benefit to pay for your medical bills or living expenses.
- Child life rider: When you purchase your policy, you can often purchase coverage for your minor child at the same time. Child life riders usually provide term life coverage until your child reaches adulthood.
- Accidental death: With the accidental death rider, your beneficiaries receive an additional payout beyond the policy’s death benefit if you die as a result of a qualifying accident, such as a car crash.
How we picked
We chose Buy Side from WSJ’s Best Life Insurance Companies based on available policies, coverage amounts, medical exam requirements, insurance riders and customer satisfaction ratings. We also looked for companies that offered online quotes and applications rather than in-person applications with an insurance agent.
We evaluated 22 leading companies, using the companies rated in the 2022 J.D. Power Individual Life Insurance Study. Policies and coverage amounts were current as of Oct. 14, 2022.
The advice, recommendations or rankings expressed in this article are those of the Buy Side from WSJ editorial team, and have not been reviewed or endorsed by our commercial partners.