Best Life Insurance Companies: Types, Cost, Coverage, and the Best Plans -

Who likes thinking of bad things happening? No one. We prepare for good things, like weddings or college. But being prepared for tragedies is important, too. That’s where getting life insurance comes in. It’s a more complicated—and serious—decision than buying auto insurance and requires a lot of planning. With so many factors to consider and hundreds of policies out there, it can become overwhelming for many.

That is why we’ve created this straightforward and easy-to-understand guide. Here, you’ll find a ranking of the best life insurance companies, as well as some pointers to help you choose the right policy for you and your family.

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Ranking 5 Best Life Insurance Companies

If you’ve just now started thinking of getting life insurance, these are the companies to look into first.

1. State Farm

State Farm is consistently rated one of the top life insurance companies by financial advisors. It has high customer satisfaction ratings and offers a wealth of coverage options. The choices are so varied that you can sit down and fully tailor your life insurance policy to fit your needs.

That said, if you’re prone to analysis paralysis, the sheer volume of customization options may not be a plus. However, don’t give up on State Farm plans just yet—an insurance agent can help you focus on what’s most important to you.

2. New York Life

New York Life is a good pick for someone looking to buy term life insurance. If you need to extend your policy, you can, as the company offers flexible plans. Additionally, New York Life also offers great coverage for whole, variable universal, and universal life insurance policies.

Do keep in mind that this insurer doesn’t offer as many customization features as, say, State Farm. But since it has one of the highest financial strength scores out there, that may not be a deal-breaker.

3. Northwestern Mutual

If you’re looking for a plan that adapts to your life’s circumstances as time goes on, Northwestern Mutual is an insurer to consider. You can convert a term life insurance coverage plan to a long-term one, no medical exam required. Plus, this company has both a history of paying substantial benefits and of financial strength—a recipe for success.

Unfortunately, finding a personalized quote isn’t the easiest task. You may need to meet with a plan advisor or agent to understand what your monthly premiums would be.

4. Haven Life

Haven Life offers the most streamlined life insurance policy application process out there. You could find a plan that suits you and purchase it in as little as 30 minutes—no medical exam required. Plus, since you can do it all online, you won’t find a more convenient plan.

However, that does come at a (slight) cost. There are no permanent life insurance coverage plans, so if that’s something you want, you’re better off looking elsewhere.

5. Mutual of Omaha

If you buy life insurance from Mutual of Omaha, you can rely on financial strength and reliability.

Because this is such a massive insurance provider, you may not always get personalized help when picking out a plan. But since their coverage features are so highly rated by financial professionals, you likely won’t need to tweak your policy too much.

Types of Life Insurance

There are many types of life insurance, but we’ll focus on the two most popular ones.

Term Life Insurance

A term life insurance policy covers you for a limited amount of time, usually 30 years. During that time, you make monthly payments and, if you pass, your loved ones get a lump sum of money.

The best thing about term policies is that they’re the most affordable. Your premium remains the same for the entirety of the 30-year term life insurance, so you’re not hit by unexpected expenses.

One clear downside of this policy is that it runs out. If you die after your policy expires, your family won’t receive a death benefit. However, many insurance companies now let you convert your term life policy into a permanent life insurance plan (we’ll get to that in a bit), so your loved ones are always taken care of.

Whole Life Insurance

Unlike term life insurance, whole life plans don’t run out; they’ll cover you for your whole life. That’s why they’re also frequently called permanent life insurance.

Often, whole life insurance has more customization options for you to create the ideal plan for yourself. Moreover, these policies sometimes come with a cash-value option, which allows you to borrow money against the plan if you need to in an emergency.

Of course, all this comes at a price. Whole life insurance policies are pricier than term life plans, so it’s worth asking yourself if they’re worth it.

How Much Does Life Insurance Cost?

Life insurance quotes can vary wildly between people. What you can expect to pay is influenced by the type of plan you want to buy and the amount of coverage you need, your age, health, family health history, profession, hobbies, and so on.

In a nutshell, the higher the risk of you dying, the more expensive your premiums will be. Online quotes can take away some of the guessing game, but you’ll get the most reliable quote from a broker.

Where to Find Cheap Life Insurance?

Understand that cheap life insurance always comes with a lower payout, sometimes as low as $25,000. If this is enough to help your family through your loss, it’s worth considering a cheap plan.

Look for smaller providers wanting to get new clients. This comes at a risk (small institutions aren’t as financially stable as their larger counterparts), so it’s up to you to decide whether or not that risk is worth it.

What Does Life Insurance Cover?

Insurance is meant to help your loved ones stay afloat financially after your passing. If you’re the main breadwinner, getting a policy is a must.

Depending on your coverage, that money could help settle debts on your credit cards, pay off your family’s mortgage, or even pay for your children’s college tuition. It should also support your final expenses, such as a funeral and burial.

How Much Life Insurance Should I Buy?

This is a question only you can answer. Sit down with your family and a financial planner to figure out how much your loved ones will need. From monthly bills to debt repayment, this is where you need to do the math.

What to Look for When Buying a Plan

Need help finding the top insurance policy for you? Keep these things in mind when looking.

1. Coverage Needs

Both whole life and term life policies tend to offer sizeable payouts. Look for a plan with life insurance coverage close to what your family will need when you’re gone. Remember, the higher the death benefit, the higher the premium.

2. Enrollment Requirements

Every insurer has its own application process. Some require a medical exam and make you jump through hoops (almost literally). Others let you do everything online. Choose a plan with enrollment requirements that fit your lifestyle.

3. Monthly Premiums

There’s no point in buying life insurance products and services if you can’t afford the monthly premiums. Once you go through the underwriting process and an insurance company tells you how much you’d have to pay, be honest with yourself—can you comfortably afford it? If not, look for a more affordable plan.

4. Financial Stability

Choose insurance providers with financial strength and backing, whether you’re buying term life policies or plans with cash value. The last thing anyone wants is their insurer going belly-up when it’s time to pay death benefits.

5. Trustworthy Broker

Lastly, it may be a good idea to ask an insurance broker for their help in picking the best life insurance company for you. Unlike insurance agents, these professionals don’t work for a specific company. Thus, they can show you the best life insurance policies out there.

Best Life Insurance Companies: Types, Cost, Coverage, and the Best Plans