Top 10 Term Life Insurance Companies

Written by Jeff Root

You probably have a few dependents right now, but know that one day, as your children grow older and retirement grows nearer, they will no longer be financially dependent on your income.  If this is the case, a term life insurance policy is likely right for you.

When searching for the best term life insurance rates, it is important to remember that depending on your health, age, lifestyle, and coverage needed, there is a broad spectrum of affordable term life insurance policies available on the market that fit your needs.

Comparing term life insurance coverage can be a real hassle if trying to do it on your own, so we took the liberty to construct a list of the Best  Term Life Insurance Companies in the United States in 2018.  Each company was chosen based off of J.D. Power ratings, A.M. Best Ratings, Customer Reviews, and the overall quality of their products and services.

Top 10 Term Life Insurance Companies [in the U.S. 2019:]

Company JD Power Rating A.M. Best Rating Reviews
1. New York Life 782 A++ 4.1
2. Mass Mutual 787 A++ 4.0
3. Mutual of Omaha 789 A+ 4.0
4. Voya Financial 781 A+ 4.0
5. Banner Life N/A A+ 4.0
6. Pacific Life 808 A+ 3.9
7. AIG 751 A 4.3
8. Prudential 777 A+ 3.9
9. MetLife 812 A 4.0
10. Genworth Financial 789 A+ 3.8
11. Transamerica 780 A 4.0

What Is Term Life Insurance?

Simply put, term life insurance is coverage with an end date. When you purchase a term life policy, you not only decide on the amount of coverage but how long the coverage will last.

Common term life insurance policies are anywhere from 5-30 years.  Additional riders and add-ons can allow for conversion or extension of the policy into whole life insurance, a type of permanent life insurance; coverage that lasts until death, with a guaranteed payout.

For example:

You are 30 year old male, and you decide to purchase a 30 year term policy for $500,000. If you were to die at any point during between age 30 to age 60, the policy would pay your beneficiaries $500,000.

At the end of the policy term, the coverage will continue as long as you renew and continue to pay the premium. However, the price will increase from the premiums you paid during the “term”.

Essentially, the term doesn’t necessarily lock in coverage for a period of term, it guarantees the cost of the policy for that term.

Without that set term, your premium would increase every policy year because your age continued to increase.

When you purchase a term policy, the longer the term you select the higher the premiums will be because the company is more likely to pay a claim on the policy.

To summarize…term insurance is life insurance with a guaranteed premium for a specific amount of time.

What Is Permanent Life Insurance?

Have you heard of whole life, universal life, variable universal life, or cash-value life insurance? Each of those products is a type of Permanent Life Insurance. So what is the difference between whole life insurance and term life insurance?

Term Life Insurance vs. Whole Life

Permanent life insurance is guaranteed for the life of the policyholder. There is no termination date during the life of the customer.

That sounds like a better deal, doesn’t it? Why would you buy something that ended when you might need it rather than buying something that could cover you for your entire lifespan.

Well, there are a few major reasons why term life insurance could be better for you than whole life insurance:

Average Cost Of Term Life Insurance vs. Whole Life

Because permanent life remains in effect until the policyholder dies, the cost is much greater. The price is higher because there is a greater likelihood the insurance company will pay a claim on the policy.

As you get older, you may need less coverage because perhaps you have fewer dependents than you did while you were younger, and you own most of your mortgage, with little debt.

Yes, a customer can cash out a permanent policy. This is another reason permanent insurance is much more expensive than term. Beyond life insurance, it is an investment vehicle. A portion of the premium is distributed into some form of investment instrument providing a return for the policyholder at some time in the future.

Permanent life policies issued by mutual companies (think..Mutual of Omaha) may actually pay dividends throughout the policy life. Mutual companies, unlike stock companies, are owned by the policyholders. Policyholders in this arrangement are much like stockholders who receive dividends on certain stocks they own.

The cash value of a permanent policy does have other benefits. A customer can borrow money against the cash value much like you could borrow against what you have in your 401k. And as mentioned, you can surrender a policy and retrieve the cash, when you decide you have no need for life insurance.

In a nutshell….permanent life is lifelong insurance with an investment component.

We mentioned whole life insurance is more expensive than term life insurance. Here’s an example of the annual coverage cost comparison for a healthy 30 year old male and female:

Term Life Insurance For Males:

Face Amount Whole Life 30 Yr Term 20 Yr Term
$250,000 $2,385 $240 $155
$500,000 $4,765 $403 $242
$1,000,000 $9,712 $720 $415

Term Life Insurance For Females:

Face Amount Whole Life 30 Yr Term 20 Yr Term
$250,000 $2,115 $205 $140
$500,000 $4,140 $335 $210
$1,000,000 $8,150 $585 $347

 

For most customers, term life is the superior product. If a person wisely saves for retirement, they have little need for life insurance as their dependents leave the nest, and their debt decreases. Their savings becomes their own self-insurance.

What Are The Advantages Of Term Life Insurance?

Here’s a recap of the advantages of term life insurance and whole life:

Term Life Insurance 

  • Provides only a death benefit
  • Pays out if you die while coverage is in effect
  • Is the most affordable life insurance product
  • Is purchased in “terms” of time such as 5, 10, 20, or 30 years
  • Becomes more expensive to purchase as you get older

Permanent Life Insurance

  • Covers you throughout your life
  • Provides a death benefit and an accumulating investing fund
  • Allows you to withdraw or borrow the cash within the policy
  • Is much more expensive than term life

How Much Term Life Insurance Coverage Do I Need?

You can make this really complicated, analyzing all your assets and liabilities, future earnings, future expenses, etc. But there is one easy question that helps figure out how much life insurance coverage you need:

How much coverage do your dependents need annually?

Think about house payments and tuition. Those are the big items.

What does your salary contribute today, and what would they need if that salary disappeared?

Once you have fewer dependents, the kids, grow up and begin their own life, and you begin to pay off your mortgage, your need for coverage in the event of your death mainly pertains to your spouse, and final expenses.  Whereas whole life insurance can build a legacy for future generations if you have the wealth to do so.

How Do You Choose A Term Life Policy?

As you begin looking at a variety of term life insurance quotes, there are 5 components you should consider when trying to identify the best term life insurance rates:

  1. Coverage Amount
  2. Term Length
  3. Insurance Company
  4. Insurance Agent
  5. Special Features

That sounds like a lot of information to analyze, but we promise…it’s not that complicated. You will be a confident buyer after you read through each of these components.

Selecting A Term

Determining the length of time you need term life coverage mostly comes down to the how old you are when you purchase coverage.

What is the best age to get life insurance?

Ideally, the younger you buy term life insurance, the better. Any age below 35 is considered to be optimal, and 25 is considered by most life insurance companies to be the best age to purchase term life insurance.


When finding term life insurance for a younger person (20s or 30s) go for longer terms such as 30 yr terms because they are a very low risk of death if they are healthy.

Especially if they have kids who will be dependent throughout most of the term, have mortgages, or other loans.

For someone in their 40s and 50s, the best term life insurance rates may come in the form of 20 year policies, which often cover until age 70 (though there are some providers that insure up to age 95).

Also, something to keep in mind when determining the best term life insurance policy for you is your retirement fund.  The more you have saved for retirement, the less coverage and time you need in a term life policy.

How We Determined The Best Term Life Insurance Companies

In our life insurance reviews of the best life insurance companies for term life, we made our decisions based on these 4 factors:

Life Insurance Company Ratings

Several organizations rate insurance companies regarding their financial stability.

Moody’s, AM Best, and Comdex are the standards for insurance quality ratings. Moody’s top rating is Aaa. AM Best is A++. Comdex is a combined score of many rating agencies. They rate on a scale of 1-100. A great company will score between 85-100.

The other rating organization to consider is J.D. Power. You are probably familiar with their car ratings, but they also have life insurance company ratings as well.

Company History  

The Life Insurance Industry has been around a long time.m Some companies go back prior to the Civil War. Company longevity is a great indicator the company will be around when you need to reap the benefits of your life insurance coverage.

The last thing you want is your family and loved ones to be left in a bad financial position as a result of your death, and not receive the coverage they deserve.  Dependability is everything in this industry.

Regardless of what the market does, you want to be able to know your provider has you and your family covered.

Size Of Company

Size is another indicator of financial strength. Be wary of very small companies or startup life companies, as they may not be as well established or have as rich of a history.

Generally speaking, the more money a life insurance company manages in its portfolio, the more you can expect them to uphold a high level of trust and dependability.  The best life insurance companies all have this in common.

Life Insurance Company Reviews

Most state departments of insurance store life insurance reviews online. You want to be sure to read what people have to say about the coverage and treatment they have received in order to get a better look at what you can expect from that side of things.

We also considered reviews in the ranking of our top term life insurance companies.  While reviews in this industry can be slightly harsh, some of the best life insurance companies can average about 80-85% customer satisfaction ratings.

How To Choose The Right Life Insurance Agent

More important than even company selection is agent selection. As a customer with a family and a career, it can be tough to do all the research into each insurance company you find.

A great agent will know and understand that information. He can guide you to a superior company that fits your needs and budget.

Here is what you want to look for when choosing an agent:

Does the agent represent a wide variety of companies?

Be concerned if an agent only represents one or two companies. They may not be able to find you the best company for your needs. Because they represent few companies, they may pigeonhole you into a company that is not the best coverage or budget fit.

Does the agent have certifications?

Insurance certifications and designations are important. They demonstrate that the agent is committed to be an expert in his industry. They have spent their own money learning more about the products they sell.

Also, most designations have a binding code of conduct or ethics statement. Agents who carry those designations are committed to bringing the value to their customers.

A couple certifications to look for are are CFP (Certified Financial Planner), CLU (Certified Life Underwriter), ChFC (Chartered Financial Consultant), and LUTCF (Life Underwriter Training Council Fellow).

Are they involved in any life associations?

Similar to designations and certifications, an agent who belongs to an association is committed to his business for the long-term and not looking for short-term sales. NAIFA and ACLI are the largest life insurance based associations.

Life Insurance Policy Riders

Term life policies may not be as complex as permanent policies, but many do have features beyond pure coverage.

These additional features are often called add-ons or policy riders.  Some help extends the term of the policy, others can change rates over time, and some offer additional death benefits and coverage options.

Some common and very helpful term life insurance policy riders are:

Waiver of premium rider

  • If you become totally disabled your premium is waived completely.  This usually expires at age 60 or 65.

Disability income rider

  • This rider pays a monthly income in the event of your becoming disabled.  Some companies only provide if you are disabled by an accident, others offer more comprehensive coverage, like in the event of illness.

 Term conversion rider

  • Allows you to convert a term life policy into a whole life policy.   Usually, this options is available to policyholders every 3 years of their policy up until a certain amount of the policy is through.  This varies by company.

Accelerated death benefit rider

  • This lets you collect a fraction of your life insurance death benefit if you become terminally ill. Usually, there is a maximum amount you can receive of $250,000 or $500,000.

Child protection rider

  • This can provide coverage in the event of the death of a child.

Accidental death benefit

  • If you are killed in an accident, your beneficiaries receive the death benefit of your term life policy, plus an additional accidental death benefit.  Some policies also offer this for dismemberment or impairment as well.

Return of premium rider

  • If you live through the term of your life insurance policy, you will receive back the total amount invested in the policy over the term.

Questions To Ask Your Agent When Considering A Term Life Insurance Policy:

Can the policy be converted to a permanent policy?

Many term policies can be converted into a permanent policy. If permanent life fits your financial goals and strategies, this could be a painless way to ease into one. One huge benefit when you convert is the elimination of the medical exam.

Can the term life policy be extended?

Most term policies do not technically expire until reach age 95. As long as you renew, coverage will continue, usually at a much higher rate than you were paying during the term. However, some policies allow you to extend the policy with a new locked in rate.

Can you decrease the death benefit of your term life policy?

Perhaps you bought a large amount and during the life of your policy, your circumstance has changed. The premium is pinching your budget, or the amount of coverage is unnecessary for your situation. Some policies allow you to decrease the death benefit within a defined window.

Best Term Life Insurance Companies

We’ve answered your questions of what is term life insurance and how to choose the best term life policy.

Every one of these companies is financially strong and offers some of the best term life insurance rates.

While choosing the best term life insurance company for you can be hard, you now know what to look for and what questions to ask in order to identify the right coverage for you.
You also have a very good starting point of what the top 10 term life insurance companies are.

From here, what you want to do is speak with a life insurance agent. Discuss your own needs and budget with them. They will present a collection of term life insurance quotes that provide you with the protection you need to protect your loved ones and dependents in the event of your death.

Compare the best term life insurance rates here.

Affordable rates, insanely fast quotes

 

About Best Life Insurance Companies
About Best Life Insurance Companies

We work with individuals across the nation to secure the best life insurance rates.

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