17 Best Life Insurance Companies of August 2021

·28 min read

Find the best life insurance companies of 2021. Learn all about coverage options, policy types and premiums.

Our Top Picks for Best Life Insurance Companies of August 2021

Best Online Life Insurance Companies

  • Bestow: Best No-Exam Life Insurance

  • Haven Life: Best for Fast Online Access

  • Policygenius: Best Comparison Tool

  • HealthIQ: Best New Independent Broker

  • Sproutt: Best Simple Online Application

  • Ethos: Best for People in Good Health

  • Lemonade: Best for Affordable Insurance

  • Ladder: Best for Innovative Coverage Options

Best Life Insurance Companies

  • Northwestern Mutual: Best Overall

  • Nationwide: Highest Customer Satisfaction

  • Mutual of Omaha: Best for Complex Medical Histories

  • New York Life: Best Mutual Insurer

  • MassMutual: Best for Frontline Workers

  • State Farm: Best for Immediate Term Coverage

  • Guardian Life: Best for Survivorship Policies

  • USAA: Best for Military Members & Veterans

  • Liberty Mutual: Best for Quick Approval

Best Life Insurance Companies Reviews

Why we chose this company

Bestow is designed for those who value a quick application process and simple term life options without a medical exam. If you’re not sure what that is, read What Is No-exam Life Insurance for more details.

Pros

  • Get a quote in seconds

  • 100% online application

  • Affordable premiums starting at $10/mo

Cons

  • Won't cover applicants over the age of 59

  • 20-year term not available to applicants over 45

  • Not available in New York

Bestow offers 10-, 15-, 20-, 25-, and 30-year term policies, with coverage from $50,000 to $1,500,000. Its policies are issued by top-rated insurer North American Company for Life and Health Insurance.

What makes this company stand out is the convenience and speed of its service. Its application process is fully online only and doesn’t require a medical exam to determine premium rates, only your identifying information and questions about your medical history, hobbies and lifestyle. The company also offers a comprehensive library of helpful information.

Why we chose this company

Haven Life provides free perks to eligible policyholders, including a customized, state-specific and legally valid digital will, as well as subscriptions to a fitness app and online vault. Further, its online calculator can help you determine an appropriate benefit amount based on your annual income, household members and combined debt.

Pros

  • Get immediate coverage up to $1M with InstantTerm

  • Policies underwritten by top-rated insurers

  • No medical exam policies available

  • Complimentary <a href=https://money.com/what-are-insurance-riders/>rider</a> with free or discounted access to digital perks

Cons

  • Doesn't offer spouse or child riders

  • Only offers term life insurance

  • Underwriting requires access to complete medical history

Haven Life offers 10-, 15-, 20-, 25- or 30-year term life insurance policy options, guaranteed level premiums and coverage amounts from $100,000 to $3 million. Applicants aged 20-59 can get coverage amounts up to $3 million, while those aged 60-64 can up to $1 million. Haven Term policies are issued by C.M. Life Insurance Company and MassMutual, depending on your state.

Other Haven Life policies include Haven Simple, a simplified issue term life insurance product, and AgeUp, a deferred income annuity that can offer guaranteed income during retirement.

Why we chose this company

Policygenius is an online insurance marketplace that partners with several different companies. Unlike other comparison sites, this one won’t sell your information to third parties.

Pros

  • All types of life insurance policies available

  • Compare quotes from top insurers

  • Create a will or trust using attorney-approved tools

  • Save up to 50% or more on your policy

Cons

  • Premium quotes or ranges are non-binding

  • It takes time to get the final price

  • Underwriting requires entire medical history

If you’re matched with an insurer through Polycygenius and the company offers you a different life insurance rate than what the marketplace quoted, Policgenius will help you find a deal within the same price range. Some of Policygenius’ partners include AIG, Banner Life, Brighthouse, John Hancock, Lincoln Financial, Mutual of Omaha, Pacific Life, Principal, Protective, Prudential, SBLI and Transamerica.

For those new to life insurance, Policygenius offers a large library of educational resources, including recommendations for life insurance for people with depression, marijuana users and diabetics. This, coupled with its broad range of coverage options, make Policygenius a great place to compare life insurance quotes.

Finally, Policygenius provides a large library of educational resources, including recommendations for life insurance for people with depression, marijuana users and diabetics.

Why we chose this company

Sproutt matches consumers with insurers and determines life insurance rates through a short quiz covering physical and emotional health.

Pros

  • Whole life insurance policies without medical exams

  • Guaranteed life policies available

  • Tools to help you improve your quality of life to get lower rates

  • Options available for those who identify as non-binary

Cons

  • No phone assistance over the weekend

  • Coverage may be denied if you're in poor health or have a high BMI

  • No-exam policies may be denied if you've filed for bankruptcy

Sproutt Insurance is a new independent broker that matches consumers with life insurers like Prudential, Nationwide, and AIG Direct. Its partners offer standard term and whole life policies as well as no-exam life insurance, also known as guaranteed-issue policies.

Sproutt stands out for its unique approach to determining life insurance rates. The company uses an individualized “Quality of Life Index” determined by a short quiz covering healthy habits, exercise and emotional wellbeing.

Why we chose this company

Ethos takes the middleman out of the picture by allowing prospective customers to get a quote and apply for coverage within minutes, without talking to an insurance agent.

Pros

  • No medical exam required for most policies under $1M

  • Same-day coverage available

  • Easy application process -- 100% online

  • 30-day money-back guarantee

Cons

  • Doesn't offer many policy options

  • Limited rider options

Ethos offers term and life insurance policies from insurers with a long history in the industry, including Legal & General America, Ameritas and AAA Life. The company aims to make life insurance simpler by allowing prospective policyholders to get a quote in seconds and apply in minutes, without having to talk to an agent.

Its term life policies are standard, with 10- to 30-year terms and coverage limits between $50k and $1.5 million. The company also offers a guaranteed issue whole life insurance policy for people between the ages of 65 and 85 underwritten by AAA Life. Applicants can obtain instant approval for coverage amounts between $10k-$25k, regardless of their medical history.

Why we chose this company

HealthIQ rewards policyholders for leading an active, healthy lifestyle. It considers your current health, health literacy, and activity levels to determine the monthly premium.

Pros

  • Compare rates from 30 different carriers

  • Licensed agents guide you through the process

  • Save over 40% on life policies

  • Offers a membership rewards program

Cons

  • Online quotes require that users agree to calls from agents

  • Advertised rates and savings are subject to change

  • Must have a healthy lifestyle or pass a quiz to qualify for better rates

HealthIQ is an excellent option for health-conscious customers. Its mission is to reward those leading active, healthy lifestyles with lower life insurance rates. The company does this through a HealthIQ quiz, which takes into account over 30,000 data points about applicants’ medical history, exercise and nutrition.

HealthIQ partners with over 25 national insurers, including Prudential, Mutual of Omaha, and Transamerica.

Why we chose this company

Unlike other online insurers, Lemonade only charges a flat fee for its services and donates any unclaimed claims to a charity of your choice. In other words, you get an affordable policy, plus the chance to support a good cause.

Pros

  • Premiums start from $9/mo

  • Approval in as little as 5 minutes

  • No medical exam required

  • Full refund if you cancel within the first 30 days

Cons

  • Only people aged 18-60 can apply

  • Term life is primarily offered to those in good health

  • Term life not available in NY

Lemonade offers 10 to 30-year term life policies and whole life insurance for up to $1.5 million in coverage. And its policies are underwritten by the North American Company for Life and Health Insurance.

With Lemonade, you can get approved in just 5 minutes without talking to an agent or undergoing a medical exam. All of the insurer’s processes are entirely online, and you’ll receive a summary of benefits after you’re approved and before you have to pay.

Lemonade also offers pet, renters and homeowners insurance, and will soon add auto insurance to its portfolio.

Why we chose this company

Ladder is unique in that it allows policyholders to increase or decrease their life insurance coverage to better fit their needs. Additionally, it offers the most affordable policies on our list.

Pros

  • Policies start at $5/mo

  • Up to $8 million in coverage

  • Online application in 3 steps

  • No medical exam required

Cons

  • Only offers term coverage

  • No riders for term policies

  • No coverage for multiple individuals or families

  • Only insures people aged 20-60

Ladder offers 10 to 30-year term life insurance policies and doesn’t charge policy, processing, or cancellation fees. That means you can cancel your coverage any time, with no strings attached.

Ladder’s best feature is that, unlike other insurers, it allows policyholders to change their coverage amount online at any time and pay accordingly. This is an attractive option for those worried about the possibility of their income changing down the road and who want to ensure their families have a financial safety net.

Best Life Insurance Companies

Why we chose this company

Our top-rated traditional insurance company, Northwestern Mutual, consistently obtains high customer satisfaction rankings and fewer complaints than the average.

Pros

  • Term and permanent life policies can be combined

  • Health status doesn't impede policy conversion

  • 10- to 20-year term length have fixed premiums

  • All policy types can earn dividends

Cons

  • Fixed window of time for policy conversion

  • Must be purchased through a licensed agent

Though it doesn’t publicly list all its insurance policies, Northwestern Mutual offers a broad range of life insurance options. Its CompLife and Whole Life Plus policies make Northwestern the only insurer on our list offering policies that incorporate the laddering strategy. That means a portion of the coverage you buy can be term life insurance while the other can be whole life. This is a great strategy for those who may have both short- and long-term insurance needs.

Northwestern offers 10-, 20-, or 80-year renewable term options and several universal life insurance policies, including Executive Variable Universal Life (for employers) and Survivorship Variable Universal Life.

Finally, Northwestern also has a broad range of riders with which to customize its unique policies, although there may be restrictions and exclusions depending on the policy type and your state of residence.

  • A.M. Best: A++

  • J.D. Power Rating: 790/1000

  • Medical Exam Required: Yes

  • Buy Online: No

Why we chose this company

Nationwide has a great A.M. Best financial strength rating of A+ as well as one of the highest customer satisfaction ratings on our list according to J.D. Power’s 2020 U.S Life Insurance Study.

Pros

  • Doesn't charge a fee for policy conversions

  • No medical exam required to convert a policy

  • Credit wellness points can be put towards the underwriting ratings

  • Offers hybrid universal life and long-term care policies

Cons

  • Online quotes aren't available for most policies

  • Its 6 universal life policies are hard to differentiate

  • No guaranteed acceptance policies

Nationwide offers 15 to 30-year term life policies, all of which feature level premiums. Coverage amounts with Nationwide start at $100k for most policies, and these can be customized with several attractive riders like accelerated death benefit, premium waiver and children’s term insurance.

The company’s universal life policies include a hybrid universal/long-term care policy called YourLife CareMatters, a Survivorship Indexed UL, an Indexed Universal Life Accumulator with tax advantages and an Indexed Universal Life Protector with multi-layer tax protection.

Finally, Nationwide also offers a whole life policy with level monthly premiums and coverage starting at $10k.

  • A.M. Best: A+

  • J.D. Power Rating: 803/1000, 3rd place

  • Medical Exam Required: Sometimes

  • Buy Online: Yes

Why we chose this company

Mutual of Omaha stands out from the crowd through its competitive rates for people with preexisting medical conditions.

Pros

  • No medical exam required for term policies

  • Offers online quotes

  • Affordable underwriting for health conditions, including cancer

  • High cap on the face value of its policies

Cons

  • Policies for healthy individuals are pricier than average

  • Must apply to discover whether a medical exam is required

  • Sparse website resources

  • New York residents have limited options

The company has a wide selection of term, whole and universal life insurance policies. It also offers several riders beyond the basics, including income, waiver of premium, chronic illness, terminal illness, and critical illness, among others. Some policies refund all premiums plus 10% if the policyholder dies during the contestability period.

However, this insurer may not be a great choice for healthy individuals or older applicants, as its premiums are higher than the industry average. Application and processing times are also slower compared to those of other insurers.

  • A.M. Best: A+

  • J.D. Power Rating: 789/1000

  • Medical Exam Required: Yes, except for Term Life Express policies

  • Buy Online: Yes, but this may reduce your options

Why we chose this company

New York Life has a good selection of both term and permanent life insurance options, and its term policies include a conversion option. It also underwrites AARP’s life insurance program.

Pros

  • Flexible life insurance plans

  • Term coverage include yearly and level premium convertibles

  • Yearly convertible policy starts with a low premium payment

Cons

  • Premiums increase once the convertible option term ends

  • Premiums for conversions are higher than average

  • Doesn't offer online quotes

As a mutual insurance company, New York Life policyholders own part of the company’s shares (depending on the specific policy) and benefit from annual dividend payouts.

This insurer has a good selection of both term and permanent life insurance options, and its term policies include a conversion option.

New York Life also underwrites the AARP Life Insurance Program, which offers both term and permanent group coverage without a physical exam. Some of the program’s policies feature guaranteed rates, while others offer level premiums.

  • A.M. Best: A++

  • J.D. Power Rating: 784/1000

  • Medical Exam Required: Yes

  • Buy Online: No

Why we chose this company

MassMutual is the only insurer we found that offers a free 3-year term life insurance policy for frontline healthcare workers helping to keep us safe during the COVID-19 pandemic.

Pros

  • Excellent options for building cash value

  • Free nationwide policy for firstline workers

  • Direct Term life insurance can be purchased immediately online

  • Young and/or healthy applicants may not need a medical exam

Cons

  • Pricing not stated online

  • No conversion options for some policies

  • High rates for smokers

MassMutual offers a wide selection of life insurance policies, but what makes it unique is its free 3-year term life insurance policy for frontline healthcare workers on duty during the pandemic. Death benefits go up to $25k for applicants aged 18-50 and $10k for those aged 51-60. No physical exam or lab tests are required.

MassMutual also offers standard 10 to 30-year policies with guaranteed level premiums. Eligibility is up to age 75 for a ten-year term.

Customers can also choose between 10 different whole life policies. Two of these, CareChoice One Hybrid Life and Select Hybrid Life, accumulate cash value, which is guaranteed to increase year over year. However, you can’t withdraw cash from these policies or customize them with riders.

Finally, MassMutual offers three universal life insurance policies with flexible premiums. Depending on the policy, you can also get a guaranteed death benefit.

  • A.M. Best: A++

  • JD Power Rating: 769/1000

  • Medical Exam Required: Yes, though they will offer temporary coverage with the Direct Term policy until you can get a medical exam

  • Buy Online: Yes, offers immediate term life insurance

Why we chose this company

State Farm offers Instant Answer Term Insurance, for which you can apply online and receive same-day approval.

Pros

  • Monthly premium doesn't change until renewal

  • Optional add-ons like children's term rider or waiver of premium with disability

  • State Farm agents can be reached by phone or email

  • Convert into permanent one up to age 75, regardless of health status

Cons

  • Your premium will increase upon renewal

  • No live chat option on the site

  • Not licensed in Massachusetts

State Farm stands out for having an excellent customer service track record. With just a single complaint, its NAIC complaint ratio is significantly lower than the national median for companies of its size.

If you’re in the 16 to 45 age range, you may qualify for State Farm’s Instant Answer Term Insurance, which features $50,000 in coverage and doesn’t require a medical exam. You can get a quote over the phone, but policies are approved in-office.

State Farm also offers Select Term and Return of Premium life insurance. The Return of Premium option builds cash value, which you can borrow against, and pays you back the value of the policy if you outlive the initial term. Select Term features 10 to 30-year term lengths and a guaranteed benefit.

  • A.M. Best: A++

  • J.D. Power Rating: 838/1000, 1st place

  • Medical Exam Required: Yes, except for Instant Answer Term Insurance

  • Buy Online: No

Why we chose this company

Guardian stands out for its survivorship policy and coverage for HIV patients.

Pros

  • Online quotes and account management

  • Large selection, including survivorship life

  • Policies available for people with HIV

  • Whole life and cash value policies up to age 121

Cons

  • Must apply (and cancel) through an agent

  • Basic term life options

  • Doesn't offer no-exam (guaranteed issue) policies

  • High cap on the face value of their policies

Survivorship policies, relatively rare in the life insurance industry, are an option for married couples who have a joint estate. These policies are designed to cover both partners and only pay out after both have passed away. Guardian is among a select number of insurers currently offering this type of policy.

Guardian also offers two types of policies for HIV patients: term and whole life insurance. To be eligible, the patient must be receiving specialized medical treatment for their condition, have been on antiretroviral therapy for the last two years and not have AIDS, among other requirements.

Besides these, Guardian Life offers the usual 10 to 30-year term life policies, with coverage limits ranging between $250k and $5M. The company also offers universal, variable and whole life insurance.

  • A.M. Best: A++

  • J.D. Power Rating: 743/1000

  • Medical Exam Required: Yes

  • Buy Online: No

Why we chose this company

USAA insurance offers options specifically for military members and their families. These include a Military Future Insurability Rider and a Military Severe Injury Benefit.

Pros

  • Designed specifically for military members

  • You can get coverage during war

  • High cap on the face value of their policies

  • Survivor Relations Team

Cons

  • Medical exam required for all policies

  • Some policies unavailable in New York

While USAA’s term, whole and universal life insurance policies are fairly standard, the company offers some benefits tailored specifically to active-duty military members and veterans. This includes a Military Future Insurability Rider, which increases your coverage after leaving the military, and a Military Severe Injury Benefit, which pays out $25k for injuries sustained during active duty.

USAA offers the option to add $100k for major life events such as having a child, getting married or buying a house between the ages of 18 and 35. Should you leave the military, you can also convert your service member group policy to individual term life insurance.

We decided to review USAA despite it not being included in the latest J.D. Power study because of its low complaint ratio of 0.11 well below the national average and its strong reputation in the insurance industry.

  • A.M. Best: A++

  • J.D. Power Rating: N/A

  • Medical Exam Required: Yes

  • Buy Online: Yes

Why we chose this company

Liberty Mutual’s Passport Term policy makes the company the best life insurer for quick approval. This policy doesn’t require a medical exam and approval can take as little as 10 minutes.

Pros

  • Approval in as little as 10 minutes or less

  • No medical exam required

  • Immediate online approval for Passport Term (simplified issue insurance)

Cons

  • Monthly premiums are higher than average

Liberty’s Passport Term policy doesn’t require a medical exam, you only need to complete a simple online form to get a decision in as little as 10 minutes. The policy terms range from 10 to 30 years and policyholders have the option to renew their coverage at the end of the term or convert it into a whole life policy.

With above-average customer satisfaction scores, strong financial ratings and a low customer complaint ratio, Liberty Mutual is a great option for those looking to purchase term life insurance quickly.

  • A.M. Best: A

  • J.D. Power Rating: N/A

  • Medical Exam Required: Yes, except for Passport Term Insurance

  • Buy Online: No

Life Insurance Guide

What is life insurance?

Life insurance is a contract between a policyholder and an insurer, in which the latter guarantees to pay a sum of money to the policyholder’s named beneficiaries upon his or her death. This sum of money, known as the death benefit, is funded by premium payments made by the insured throughout their lifetime.

Life insurance is meant to protect family members and loved ones from financial hardship upon the death of a primary breadwinner. Parents of young children or special-needs adult children could benefit from life insurance coverage.

Life insurance may also be a worthwhile investment for younger people without dependents who have considerable student debt and their parents are co-signers on their loans. Furthermore, by getting a policy young, they can take advantage of lower rates.

At its most basic, life insurance has two main components, a death benefit and a premium.

  • The death benefit, also called the face value, refers to the lump sum of money the insurer agrees to pay out to named beneficiaries upon the policyholder’s death.

  • Premiums are payments made by the policyholder to the insurer in exchange for the policy. Premiums are determined by the insured’s projected life expectancy. High-risk individuals, those who purchase larger death benefit amounts or permanent life insurance pay higher premiums.

Permanent and whole life insurance policies also include a cash value component that can serve two functions:

  • As a savings account where cash accumulates on a tax-deferred basis, and which the insured can access during their lifetime. Some policies may have restrictions on withdrawals depending on how the money will be used.

  • The cash value can also be used to cover premiums or purchase additional coverage.

It’s important to note that the cash value is a living benefit that stays with the insurance company when the policyholder passes. Any outstanding loans against it will reduce the policy’s death benefit.

What is the difference between term, whole, and universal life insurance policies?

Term Life Insurance

  • Out of all three policies, term life insurance is the most accessible and the easiest to understand, according to Alison Salka, Senior Vice President and Research Director at LIMRA

  • As the name suggests, a term policy lasts for a predetermined period (commonly 10, 15 or 20 years), and then it expires

  • If you were to pass away before the end of the term, a death benefit would be paid to your designated beneficiaries. It can be used to cover funeral expenses, help replace lost income and leave behind an inheritance

  • The death benefit can be paid out as a lump sum, in installments or as an annuity. When you choose a lump sum payout, your beneficiary receives the whole benefit at once. If you choose to annuitize your benefit payout, it’s spread out into fixed installments

Whole Life Insurance

  • Pays out a death benefit and has a savings portion called “cash value,” where interest may accumulate on a tax-deferred basis

  • Policyholders can access the savings component during their lifetime by borrowing or making withdrawals

  • The savings component can be invested

  • Policyholders can make payments over the premium and accumulate more

Universal Life Insurance

  • Consists of two components: the COI (Cost of Insurance) and a savings portion called the cash value

  • COI is the minimum premium amount that must be paid to keep the policy active, anything paid in excess goes to the cash value component

  • COI includes mortality costs, administrative fees and other expenses

Both whole and universal are considered permanent life insurance policies, meaning they can last a person’s lifetime.

Permanent life insurance policies can be used as investment vehicles. According to Chris Huntley from InsuranceBlogByChris, “whole life insurance is oversold and not needed in 90% of cases. It’s sold as more of an investment than as life insurance.”

Huntley also points out that it could take seven to ten years to break even on whole life insurance policies because of their upfront fees. This makes term life insurance the more appropriate option for the vast majority of people.

Factors that affect your life insurance premiums

Before buying a policy, speak to your financial advisor or a life insurance agent. It could also be helpful to understand the factors that go into determining your life insurance rates before buying a policy.

profile with clock inside the head
profile with clock inside the head

AGE

Your premiums will increase with the risk of disease as you get older.

male and female symbol
male and female symbol

GENDER

Women have a higher life expectancy than men, so their rates tend to be lower.

heart with heart monitor line
heart with heart monitor line

HEALTH

Compromised health means higher premiums, and excellent health the opposite.

clipboard with medical cross
clipboard with medical cross

FAMILY MEDICAL HISTORY

A family history of cancer or heart disease can increase rates.

lit cigarette
lit cigarette

HABITS

Smokers will pay higher premiums than non-smokers.

briefcase
briefcase

LIFESTYLE & OCCUPATION

High-risk jobs or hobbies (mining, fishing, transportation, rock climbing, skydiving) can mean higher premiums.

Life Insurance Glossary

Common life insurance terms

Underwriting

Insurance companies use underwriting guidelines to determine how much your policy will cost based on your health and family history, among others. They do so by classifying policyholders into risk pools. The higher the risk, the higher the premium.

Beneficiary

Person, organization or charity that receives the life insurance payout (death benefit).

Rider

Coverage add-ons to your policy at an increased price, such as an accelerated death benefit, chronic illness, or long-term care.

Disclaimer

When a beneficiary declines to receive or fails to claim the proceeds of a policy. In such cases, the death benefit goes to the remaining beneficiaries. If there are no other beneficiaries, the death benefit goes to the insured’s estate.

Life Insurance FAQ

What is the best life insurance?

There's no one best life insurance policy or company for everybody. Your choices regarding life insurance will depend on your needs and how you plan to use the policy. That said, our list of  best life insurance companies is a good place to start your search.

How much life insurance do I need?

To calculate how much life insurance you need, the Insurance Information Institute recommends you add up your financial obligations (including services you provide for your family and benefits you may have through work), subtract any assets and sources of income your family might have access to, and then consider how long your loved ones will need to replace your income.

If you can, consult a financial advisor or CFP to understand how life insurance fits into your overall financial plan.

How does life insurance work?

Life insurance is a policy taken out on your life that pays out in the event of your death. It's a form of financial protection for your beneficiaries, who may use the policy's death benefit to cover your final medical expenses, set up a trust fund for your children's college tuition, pay off debt or cover estate taxes.

How much is life insurance?

On average, life insurance is a lot more affordable than people imagine, with some estimates averaging between $26 and $55 per month. How much you will actually pay will depend on a number of factors, including your health, habits, hobbies, etc.

What is the difference between term and whole life insurance?

The main difference between term and whole life insurance is that the former only lasts a set period or term, while whole or permanent policies cover a policyholder for (essentially) their entire lifetime.

Regarding the difference between term and whole life insurance, insurance strategist David Gastwirth recommends purchasing term life insurance if you're only interested in the financial protection a death benefit can afford. If, on the other hand, you are looking for an investment vehicle that can help you accumulate and distribute cash in a tax-efficient way, you may want to consider whole life insurance.

What is supplemental employee life insurance?

Supplemental employee life insurance is additional coverage you can purchase through your employer. If the coverage amount your company already offers you is insufficient, you may purchase supplemental employee life insurance to cover certain expenses.

Some of these policies may act as a form of death and dismemberment insurance or burial insurance, which means they may not pay out for all deaths or be used for all types of expenses.

What is the death benefit on life insurance policy?

The death benefit is the life insurance payout named beneficiaries may receive upon the death of an insured. Death benefits may be used to cover final expenses (funeral, burial, outstanding medical bills), mortgage payments, debt, children's college tuition, domestic labor expenses, estate taxes and living expenses for surviving dependents.

What type of life insurance has flexible premiums and an adjustable death benefit?

Some, but not all, universal life insurance (UL) policies feature flexible premiums. These insurance products also allow policyholders to increase or decrease the death benefit amount, within limits.

Note, however, that UL policies may have high maintenance and administrative fees, and that gains may not be as high as what other investment options can offer.

How we chose the best life insurance companies of 2021

To come up with our list of top life insurance companies, we looked at three key factors: financial stability, customer experience and product offerings.

To make the cut, insurers must have high customer satisfaction ratings as reported in J.D. Power’s latest U.S. Life Insurance Satisfaction Study, high A.M. Best financial strength ratings and a low number of complaints regarding their individual life insurance policies based on NAIC data.

They must also offer unique or innovative insurance plans and related products or convenience in the form of simplified underwriting.

Because we evaluated companies based on a combination of the above factors, this disqualified some well-known insurers:

  • Transamerica

  • Prudential

  • MetLife

  • Lincoln Financial

  • AIG

  • Amica

Customer satisfaction

We used J.D. Power's 2020 U.S. Life Insurance Study, which measures the performance of insurance providers based on their application and orientation process, communications, interaction with customers, product offerings, price and statements. The study ranks national insurance providers on a scale of 1,000 points.

We also used The National Association of Insurance Commissioners' (NAIC) Complaint Ratio Report, which catalogs the number of complaints filed against each insurer.

We favored companies with high customer satisfaction ratings and low complaint ratios.

Policies and coverage

Life insurance policies are fairly similar across the board, so we favored companies that offer a convenient purchase process, innovative term life insurance options, and the flexibility to customize a policy through a variety of riders.

Financial strength

While this factor is often overlooked by consumers, financial stability matters. When an insurance company declares bankruptcy, their client and product portfolios are sold to other insurance providers, delaying any payouts for claims still being processed when the change takes place.

Most of our top picks are companies with high A.M. Best ratings, which speaks to their ability to pay out claims on time. Some of the companies on our list, specifically online life insurance marketplaces, are not rated by A.M Best, but they partner with insurers that have high financial strength ratings with this agency.

Summary of Money’s Best Life Insurance Companies of August 2021

  • Bestow: Best No-Exam Life Insurance

  • Haven Life: Best for Fast Online Access

  • Policygenius: Best Comparison Tool

  • HealthIQ: Best New Independent Broker

  • Sproutt: Best Simple Online Application

  • Ethos: Best for People in Good Health

  • Lemonade: Best for Affordable Insurance

  • Ladder: Best for Innovative Coverage Options

  • Northwestern Mutual: Best Overall

  • Nationwide: Highest Customer Satisfaction

  • Mutual of Omaha: Best for Complex Medical Histories

  • New York Life: Best Mutual Insurer

  • MassMutual: Best for Frontline Workers

  • State Farm: Best for Immediate Term Coverage

  • Guardian Life: Best for Survivorship Policies

  • USAA: Best for Military Members & Veterans

  • Liberty Mutual: Best for Quick Approval

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