Best Life Insurance: A Complete Guide (2023)

Searching for the best life insurance policy can feel overwhelming, but it doesn’t have to be. With some direction, you can know what to look for regarding how does life insurance work?

Term and permanent life insurance are the two main types of life insurance policies. If you purchase a term life insurance policy, you purchase coverage for a specific number of years. Term life insurance policies typically last anywhere from 10 to 30 years. Searching for the best permanent life insurance can be a daunting task, but with careful consideration of your long-term needs, you can find a policy that fits perfectly.

On the other hand, a permanent life insurance policy lasts a lifetime as long as you continue to pay your monthly or annual premiums. Within the permanent life insurance category, there are several options to choose from. You can make the best life insurance choice for yourself and your beneficiaries based on several key factors specific to your life and needs. 

As you search for the best life insurance companies, comparing whole and term life insurance quotes from several options is important. As you compare life insurance companies and what they have to offer, you’ll get a better idea of how much you should spend on a policy.

What is life insurance? 

Life insurance is a type of coverage that offers a financial payout to your beneficiaries when you pass away. Several types of life insurance exist, and you need to choose a company and policy that work best for your needs and your beneficiaries.

Once you determine your type of life insurance coverage, you will apply for coverage with the appropriate company. Applications may include health exams, but you can purchase smaller coverage without a medical exam. 

How does life insurance work? Once approved, your life insurance policy will pay your beneficiaries the specific amount you signed up for as long as you continue to pay your monthly or annual life insurance premiums. In many cases, beneficiaries use at least part of the money from the policy to pay for funeral costs, burial expenses, loss of income, and more. 

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What are the different types of life insurance?

Most life insurance companies offer two main types of life insurance: term and permanent coverage. On top of that, permanent life insurance policies exist in various options, and some companies also offer different types of term life insurance coverage.

What is term life insurance? 

Term life insurance is a type of temporary life insurance. Coverage with a term life insurance policy lasts a specific term, typically five to 30 years.

Some companies allow policyholders to turn a term life insurance policy into a permanent one, though this is not an option for all life insurance companies. If you outlive your life insurance policy terms, there is no payout, and you no longer have life insurance coverage.

Read more about how term life insurance works here. 

What is permanent life insurance?

Permanent life insurance is cultivated to last for a person’s life. If you purchase a permanent policy, your coverage will last until you pass away. At that point, the death benefit of your life insurance policy will go to your beneficiaries. 

Most permanent life insurance policies offer two components: a death benefit and cash value. The cash value of a life insurance policy is a sort of savings plan or investment opportunity. Different companies offer and accrue cash values in different ways. For example, whole and universal life insurance are two types of permanent life insurance policies. 

What is whole life insurance? 

A whole life insurance policy is a type of permanent life insurance policy that offers a death benefit and can accrue a cash value.

The cash value of a whole life policy can grow if you purchase life insurance with a company that pays dividends into your policy’s cash value. Dividends for cash value in a whole life policy may be based on the company’s financial performance. 

You may find that certain companies offer cheap whole life insurance quotes, while other companies charge more for their whole life coverage. 

What is universal life insurance?

Universal life insurance is also a type of permanent life insurance. However, universal life insurance policies tend to have a lot more flexibility, allowing policyholders to adjust their policy’s premium, death benefit, and more. Most companies offer different types of universal life insurance coverage, like indexed universal life, variable universal life, and guaranteed universal life coverage.

What is no-exam life insurance?

No medical exam life insurance does not require the policyholder to take a medical exam when applying for life insurance coverage. Companies offer no-exam coverage in both term and permanent policies. Since individuals don’t have to take a medical exam for no-exam insurance, the application and approval processes are typically quick.

Coverage may be limited with no-exam life insurance, and monthly or annual premiums for a no-exam life insurance policy are typically expensive. 

What are the best life insurance companies? 

Finding the best life insurance company will depend on what you’re looking for in terms of a policy. For example, the best life insurance company for you may not be the best company for a friend or neighbor. Because some life insurance policies allow individuals to customize their coverage, learning what you want in a life insurance company is important to know which will be best for you.

Still, some life insurance companies rank higher than other options in the U.S. If you’re new to life insurance, consider the companies below to determine whether one would work for you and your loved ones. 

Lincoln Financial: The Best Life Insurance Company for Boomers

Lincoln Financial offers several options when it comes to life insurance. With Lincoln Financial, you can purchase the following policies:

• Fixed-rate universal life insurance
• Guaranteed universal life insurance
• Indexed universal life insurance
• Term life insurance
• Variable universal life insurance

Lincoln Financial may work great for Boomers and anyone else working toward estate planning for their beneficiaries and loved ones. The company offers survivorship policies that make estate planning simple and effective, and beneficiaries don’t have to jump through the legal hoops they may otherwise have to.

Lincoln Financial offers cash-value policies with permanent life insurance options. The company typically has low internal policy costs, keeping money in your pocket or your policy rather than going to someone else. 

Lincoln Financial offers higher-than-average rates for its term life insurance policies. The company may not offer the kind of robust cash-value growth you could get if you invested with other life insurance policies.

Lincoln Financial offers two options for term life policies — Lincoln TermAccel and LifeElements — and coverage extends up to 80 years of age and $5 million. With a permanent policy with Lincoln, you can choose from several options that build cash value differently. The company also offers several rider options to help policyholders customize their coverage.

Check out our Lincoln Financial insurance review to learn more.

Mutual of Omaha: The Best Life Insurance for Indexed Universal Life Insurance

Life insurance with Mutual of Omaha offers several coverage options. For example, you can purchase a term life insurance policy with the company or choose permanent insurance for the duration of your lifetime. 

Mutual of Omaha’s life insurance coverage options include the following policies:

• Term life insurance
• Guaranteed whole life insurance
• Indexed universal life insurance

Mutual of Omaha does not offer extremely competitive rates for term life insurance, but the company excels in indexed universal life and guaranteed whole life insurance options.

With guaranteed whole life insurance, policyholders can purchase coverage for their entire lives without taking a medical exam. In addition, premiums for a guaranteed whole life policy will not increase, and Mutual of Omaha offers coverage for policyholders up to 85 years old. The death benefit of a guaranteed whole life policy can be anywhere from $2,000 to $25,000.

The cost for guaranteed whole life coverage with Mutual of Omaha is often cheaper than with companies like AIG and Gerber. For example, the standard monthly fee for a 70-year-old policyholder is $89.

Still, Mutual of Omaha’s best product may be its indexed universal life insurance coverage. With an indexed universal life insurance policy from Mutual of Omaha, policyholders have a permanent death benefit and cash value directly associated with the policy.

The interest rate of Mutual of Omaha’s indexed universal life insurance policies is tied directly to the market index. The company offers two indexed universal plans policyholders can choose from. 

Learn more about the company by visiting our Mutual of Omaha insurance review.

Pacific Life: The Best Life Insurance Policy for Retirement Planning

Pacific Life offers life insurance options that may work well for anyone planning for retirement. Additionally, the company offers term life options with rates lower than the industry average. 

If you’re interested in purchasing a permanent life insurance policy with a cash-value component, Pacific Life offers competitive rates for life insurance coverage. Additionally, many policyholders agree that Pacific Life has excellent performance for cash-value growth with whole life policies.

With Pacific Life, you can purchase the following policies:

• Term life
• Whole life
• Indexed universal life
• Variable universal life

The company’s universal life insurance often receives top marks for coverage and value, and Pacific Life is known for its assistance investing for retirement. However, while the company’s term life insurance rates are competitive, Pacific Life offers lower-than-average rates for its permanent life insurance options.

Because Pacific Life offers helpful cost competitiveness for its permanent insurance investments, policyholders often receive more cash value with a policy. And if you’re a smoker, Pacific Life still offers competitive rates for a cash-value policy. 

While other life insurance companies may take a decade or longer to build cash value with permanent policies, Pacific Life policies offer cash-value growth almost immediately. Pacific Life also offers riders for its policies, so you can customize your life insurance plan to work best for you and your beneficiaries. 

Protective: The Best Option for Universal Life Insurance

Protective Life Insurance may be a great option for you if you’re looking for universal life insurance coverage. And Protective also offers low rates for term life insurance. 

With Protective Insurance, you can get a term life policy with a term length of 10 to 40 years. In addition, the company offers level term lengths for up to 40 years, which makes it a great option for people looking for long-term coverage.

The company’s universal life insurance options provide competitive costs for most policyholders, even individuals with substantial health risks that would increase their rates with other insurance companies. Protective Life’s universal health insurance policies typically grow significantly in cash value.

Protective offers eight different types of permanent life insurance coverage. The cash value associated with each of its permanent policies typically has low internal costs, meaning you’ll have more money added to your policy instead of going elsewhere within the company. 

Unfortunately, the cash value with any of Protective’s permanent life insurance policies may be slow. So if you’re looking for immediate cash-value growth, you should look elsewhere. 

Prudential: The Best Life Insurance Company for Seniors

Prudential offers great life insurance policies for seniors. The company allows policyholders to utilize the death benefit associated with their term life insurance coverage to pay for nursing home care. Additionally, Prudential’s illustrations for its policies are often incredibly reliable. 

With Prudential, policyholders can accrue a significant cash value with their policies relatively quickly. Additionally, the company has low internal costs regarding the cash value associated with many of its permanent life insurance policies. 

While Prudential may be a great company for seniors, it has not had significant success with its investment performance. Because of this, policyholders may not be able to build the same cash value they could with a different life insurance company. 

Visit our Prudential Insurance review to learn more.

AIG: The Best Life Insurance Company for Recreational Marijuana Use

If you’re a recreational marijuana user, AIG may be your best bet. With AIG, marijuana users who smoke eight days or fewer each month can qualify for the best rate class. Additionally, rates are competitive across the board with AIG for both term and permanent life insurance. 

If you use marijuana for vaping, AIG may allow you to get standard tobacco rates with the same coverage options. Additionally, the company offers no-exam coverage options for individuals who do not want to take a medical exam to qualify for life insurance. 

AIG term life insurance policies are customizable, meaning you can choose coverage for a specific number of years instead of choosing in five or 10-year increments. If you purchase permanent coverage with the company, AIG policies have low internal costs. Additionally, the company offers reliability in terms of policy illustrations and excellent growth regarding the cash value of a policy. 

Unfortunately, AIG does not have the best track record regarding financial strength. Still, the company now has an A (Excellent) financial strength rating with A.M. Best.

See our AIG insurance review for more.

Equitable: The Best Option for Variable Universal Life Insurance

Equitable offers term and whole life insurance options, and the company’s variable universal life coverage includes several helpful features. For example, with a variable universal life insurance coverage with Equitable, policyholders can enjoy cash-value investments, flexibility for premium payments, and options regarding the death benefit payout of a policy. 

If you purchase a variable universal life insurance policy, you can borrow from your policy’s cash value tax-free. When it comes to term coverage, Equitable offers relatively inexpensive rates, especially for older policyholders.

Equitable works to keep internal costs low, so policyholders don’t have to pay more fees or premiums as the policy ages. Additionally, customers can see extensive growth in the cash value of a life insurance policy with Equitable relatively quickly. 

Similar to AIG, Equitable does not have the best financial strength. Still, Equitable has an A (Excellent) financial strength rating with A.M. Best. 

You can learn more by visiting our Equitable insurance review.

Nationwide: The Best Life Insurance Company for Gen X and Millennials

Nationwide offers competitively low rates for term and whole life insurance policies if you’re a young life insurance buyer. The company also has a good track record regarding invested assets for permanent life insurance policies. 

Anyone looking for the cash value of a life insurance policy to multiply quickly should look elsewhere, as Nationwide’s permanent policies take a while to build extensive growth in cash value. Still, younger clients may benefit from purchasing a policy with the company in terms of investments. 

Check out our Nationwide insurance review to learn more.

Northwestern Mutual: The Best Option for Whole Life Insurance

Northwestern Mutual could work well for you if you’re shopping for whole life insurance. With Northwestern Mutual, you have two whole life options: Whole Life One and Whole Life Plus.

With Whole Life One, policyholders can purchase coverage up to 85 years of age, and the death benefit of a policy can go up to $50,000. Additionally, premium payments for a Whole Life One policy will stop once the policyholder reaches 100. 

Whole Life Plus allows customers to customize their coverage. With Whole Life Plus, you can select the premium payment and death benefit associated with your policy. The minimum death benefit for a Whole Life Plus policy is $50,000, and policyholders can blend a term life policy with a Whole Life Plus policy for an increased death benefit. 

Visit our Northwestern Mutual insurance review for more information.

Penn Mutual: The Best Life Insurance Policy for Estate Planning

If you’re looking for a life insurance policy that aids in estate planning, a policy with Penn Mutual may be a great option. However, with Penn Mutual, your policy may not build a high cash value early on. Still, if you’re searching for a policy with a significant death benefit for estate planning, the cash value of a policy may not matter much to you.

In addition to being good for estate planning, Penn Mutual offers competitive rates for term life insurance policies. The company also allows policyholders to convert certain term life policies into permanent policies.

The cash value of many of Penn Mutual’s permanent life insurance policies is competitive, so you can rest assured that a higher death benefit for your policy is worth the investment. Additionally, the company has significant financial strength. 

One downside to purchasing term life insurance with Penn Mutual is that the company charges more if you want a term life insurance policy that’s convertible into a permanent option.

Visit our Penn Mutual insurance review to learn more.

Transamerica: The Best Option for Term Life Insurance

Term life insurance with Transamerica is a great option, as the company allows policyholders to renew or convert their term life insurance policies, even if they’re elderly or terminally ill.

With Transamerica, you’ll have reliable policy illustrations for the cash value associated with any of the company’s permanent life insurance policies. Typically, this translates to higher cash value in less time. Additionally, the cash value of a Transamerica policy typically builds well, even in the early years.

Unfortunately, Transamerica has not always performed excellently in terms of investments for permanent life insurance options. Because of this, you could potentially pay higher premiums for life insurance if your policy includes a cash-value component. 

For more information, check out our Transamerica insurance review.

John Hancock: The Best Life Insurance Company for Minimal Cigar Use

John Hancock may be an excellent option if you’re a smoker or nicotine user.

John Hancock considers the celebratory use of cigars to be separate from the smoking category in life insurance policies. For many occasional cigar users, this could mean incredible savings for term or whole life insurance coverage.

John Hancock has exceptional financial strength, and the company accurately assesses the cash value associated with any of its permanent policies. Still, term life insurance rates are exceptionally high compared to other companies. Some permanent life insurance policies may not garner cash-value growth as quickly as desired, especially in a policy’s early years. 

Visit our John Hancock insurance review to learn more.

How can I compare the best life insurance companies out there?

If you’re searching for the best life insurance company, it will depend on your needs. Companies are all competitive in different ways. If you are looking for a term life policy, the best life insurance policy for you will differ from someone looking for a guaranteed issue whole life insurance policy. 

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Best Life Insurance: A Complete Guide to Claims Process

Ease of Filing a Claim

Life insurance claims can typically be filed through various methods, including online, over the phone, or through mobile apps. Modern insurance companies often provide user-friendly online platforms and mobile applications, making it convenient for policyholders to initiate a claim from anywhere.

Average Claim Processing Time

The processing time for life insurance claims varies by company and can depend on the complexity of the claim. Generally, insurance companies strive to process claims efficiently to provide timely assistance to beneficiaries during a challenging period. Understanding the average claim processing time can help beneficiaries plan accordingly.

Customer Feedback on Claim Resolutions and Payouts

Customer feedback on claim resolutions and payouts is a valuable indicator of an insurance company’s performance. Hearing about the experiences of other policyholders in similar situations can offer insights into how responsive and fair an insurance company is when it comes to claim settlements. Gathering customer feedback is a vital step in choosing the right insurance provider.

Best Life Insurance: A Complete Guide to Digital and Technological Features

Mobile App Features and Functionality

Many insurance companies offer dedicated mobile applications that allow policyholders to manage their policies, access important documents, pay premiums, and initiate claims directly from their smartphones. These apps often provide a user-friendly interface and essential features for a seamless experience.

Online Account Management Capabilities

Online account management portals give policyholders access to their policy details, payment history, beneficiary information, and other essential documents. This digital platform allows policyholders to conveniently manage their policies and make informed decisions regarding their coverage.

Digital Tools and Resources

Insurance companies often provide various digital tools and resources, such as online calculators to estimate coverage needs, educational articles, and interactive content to help policyholders understand their policies better. These resources empower policyholders to make informed choices about their insurance coverage.

Best Life Insurance Companies: The Bottom Line

If you’re looking for the top life insurance companies in the U.S., you’ll get different answers depending on who you ask. To find the best life insurance policy, you first need to assess what you need. 

Are you looking for a term policy that only lasts a set amount of time? Do you need permanent coverage that accrues cash value for yourself and your beneficiaries? You have a lot to consider before purchasing life insurance, but once you know what you’re looking for, the process can be quite simple.

As you decide on the type of policy you want, it’s important to compare options from several companies before you make a coverage decision. Likewise, find and compare life insurance premiums from several companies before deciding. Comparing coverage and premiums can help you determine which company offers the coverage you need at the best price. 

 

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