Best Life Insurance Companies in 2018
What is the best life insurance company for you?
There’s good news: there are many outstanding and safe choices among the more than 800 companies who sell life insurance.
Yes, there are more than 800 life insurance companies to choose from to find the best!
Thankfully, there aren’t 800 questions to answer to identify which one or two (or maybe three) are best to meet your specific needs.
This article is designed to help you make a good decision when purchasing life insurance.
We’ve broken it into six sections to make it easy:
- 10 best life insurance companies right now
- How to choose the best life insurance company
- Types of life insurance
- How much life insurance do I need?
- How to determine financial strength of a life insurance company
- Best insurance company customer service
What’s best: brand name or lowest cost life insurance company?
The question we get most often is: “Do I go with a brand-name life insurance company or a company that I haven’t heard of, but has good rates?”
The right answer is “it depends.”
Like any business, it’s easy to get confused when you’re shopping for a life insurance policy.
As a start, the PolicyZip team has compiled a list of the best life insurance companies in America to help clients find the right fit for their unique personal needs. We compiled this list from an analysis by A.M. Best, a global company which reports on insurer financial strength ratings for life insurance and property and casualty insurance firms around the world.
While PolicyZip works with nearly 100 life insurance companies, our focus is on those that meet the requirements to earn an “A” rating year over year. While each client’s situation is different, and some may require unique underwriting, the vast majority of our business is conducted with A-rated companies.
Let’s get going!
PolicyZip is an independent life insurance agency working nationwide with the best life insurance companies. Rates for term insurance and whole life insurance will vary based on the date, your age, your health conditions, and the amount of coverage you ultimately decide to purchase.
10 best life insurance companies right now
We have been in the insurance industry for many years and have very close working relationships with many of the best life insurance companies. While we have the need to work with those we like, we want to make sure and provide you an objective understanding of those that consistently earn a place in the top 10 list.
And, the best part, we can help get you quotes for any of the companies listed below. Not only are we a national insurance agency, but we partner with the captive companies like Northwestern, State Farm, and New York Life to make sure that we provide you the absolute best life insurance buying experience we can.
- Lincoln Financial Group
- Northwestern Mutual Life Insurance
- New York Life Insurance Company
- Massachusetts Mutual Life Insurance
- Brighthouse Financial (Formerly MetLife Life Insurance)
- Banner Life Insurance
- Transamerica Life Insurance
- State Farm Life Insurance
- Gerber Life Insurance Company
- Royal Neighbors of America
LINCOLN FINANCIAL GROUP
Lincoln financial group is an A rated life insurance company that we believe will continue to be on the best life insurance companies in the US year over year.
A rated along with some of the strongest rates and conversion options in the industry, Lincoln tops the charts in our opinion. You can shop Lincoln life insurance from any of their independently licensed agents located across the United States.
They have lines of individual insurance such as term life, universal life, and variable universal life among their other offerings in the employee benefit space and retirement plan services.
NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
Northwestern is one of the oldest life insurance companies in the United States (one of Policy Zip’s owners started his career at Northwestern Mutual), providing one of the most competitive whole life insurance products in the life insurance industry. Their largest competitors are Mass Mutual, Guardian, and New York Life. Typically you’ll find each of these whole life insurance companies competing for the top spot not only in policy guarantees, but dividends paid out to their policy holders.
Typically you’ll find companies like Northwestern Mutual at a higher price point compared to the competition, specifically in the term life arena. However, people purchase Northwestern Mutual life insurance for their strong financial history and competitive performing whole life insurance.
What this means is most people who buy Northwestern Mutual are buying it for the opportunity to participate in their whole life program down the road. If you’re looking for the cheapest term insurance, Northwestern definitely isn’t the place to go. If you’re looking to get your foot in the door to get started using life insurance as an alternative to accumulate cash in retirement, Northwestern is positioned very well.
Are you looking for a Northwestern Mutual life insurance quote? Let us help connect you with the best Northwestern Mutual agent in your area.
NEW YORK LIFE INSURANCE COMPANY
Like Northwestern Mutual, New York Life has been around well over 100 years. They are financially stable from all of the major financial reporting companies making them one of the strongest life insurance companies year over year.
New York Life is commonly only available through it’s career channel of agents, but in some cases New York Life allows their product to be distributed through independent brokers. The caveat is the premium must meet a minimum of $20,000 for a broker to be able to sell a New York Life policy as an independent agent.
Otherwise, you need to meet and speak with a career New York Life agent in your area to discuss their permanent and term life insurance products.
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
One of the larger companies we reviewed coming in at more than $500 billion in total assets, Mass Mutual is is positively rated by all the 4 major financial reporting companies.
Many carriers have chosen to offer life insurance, but few have made such large strides as Massachusetts Mutual in fully helping their clients with both insurance and financial planning.
Getting a Mass Mutual life insurance quote is easy using our quick quote tool.
BRIGHTHOUSE FINANCIAL (formerly MetLife)
MetLife announced they would be sun setting (discontinuing the sale) of life insurance in 2017. This comes as a major shock as Met Life has for many years been the largest provider of life insurance in the United States.
MetLife has sunset their whole life insurance, universal life insurance, and term life insurance (less than $1MM).
What does this mean?
How can one of the most well known companies in the life insurance industry just stop offering life insurance?
“MetLife’s core businesses – employee benefits, protection and fee-based retail products outside of the United States, and our growing asset management arm – position the company well for profitable growth,” according to their CEO, Steven Kandarian.
MetLife remains a financially stable life insurance company and will continue down their path as an industry leader.
For those looking to continue doing business with MetLife, you can now purchase their full suite of life insurance products from Brighthouse Financial.
The shift with MetLife and Brighthouse is considered an extremely positive move by the company and we anticipate seeing MetLife and Brighthouse to continue their positions as one of the biggest and best life insurance companies.
BANNER LIFE INSURANCE COMPANY
One of the The best term life insurance company in 2018, Banner continues to be one of the cheapest term life companies available.
They are hands down the best insurance company for low prices on a term life policy and you’ll often find career agents with Northwestern Mutual, New York Life, or Mass Mutual using Banner as their term life product of choice when writing business outside of their core companies.
The one thing we warn people on regarding Banner life is their inability to allow their independent agents to properly serve their clientele.
This means that an agent cannot directly call Banner life to help their client get policy information. They are forced to utilize Banner’s predetermined wholesale channels which certainly delays the process and impacts the customer experience.
Banner certainly wins price most of the time which is what earns their place on our list.
TRANSAMERICA LIFE INSURANCE COMPANY
Yet another life insurance company that is not only a house hold name, but leading the life insurance industry for more than 100 years.
Transamerica Life Insurance company is positively A rated and continues to be a leader in Universal Life insurance, term life insurance, term life insurance with living benefits (one of the flagship differences between Transamerica and their competition).
Corporate headquarters are located in Cedar Rapids, IA and led by CEO, Seth Miller.
Another great benefit many people do not know about Transamerica is how competitive they are when offering life insurance to foreign nationals living in or outside of the united states.
STATE FARM LIFE INSURANCE COMPANY
State Farm Life Insurance company has been providing services since 1922 and is one of the largest and most well known life insurance companies. Founded by George Mecherle, State Farm has built it’s reputation as a leading home and auto insurer, but what most people don’t realize is they are one of the largest providers of life insurance in the United States.
In 2017, State Farm Life Insurance company was ranked number 33 in the Fortune 500.
Unlike independent insurance agencies, State farm sells only its own life insurance products so you need to work directly with a local State Farm agent if you are considering buying life insurance from State Farm.
GERBER LIFE INSURANCE COMPANY
Gerber Life Insurance has more than $45 billion of life insurance and over 3.3 million policies. They are most well-known for offering life insurance for both adults and children, but most commonly children.
They are affordable and hold an A+ rating with the BBB and an A with AM Best.
Most companies use Gerber Life Insurance company for their impaired risk clients or clients that have health conditions which deem them uninsurable by most other life insurance companies. This means you can get guaranteed life insurance from Gerber with no medical exam or health questions, everyone get’s approved (make sure you speak to an agent about the company requirements regarding age, not all age groups qualify for guaranteed life insurance with no medical exam).
BEST TERM LIFE INSURANCE COMPANY
We thought it would be useful to further rate companies by the type of life insurance product.
For this rating, more emphasis was put on product, price and additional benefits provided by the company itself which would enhance the overall experience in buying from them. Utility of a product, its riders, the convertibility (where appropriate), and its availability to several demographics were heavily considered in our choices.
Lincoln Financial Group
Lincoln Financial Group is one of our favorite life insurance companies to work with, not only because they are cost effective, but they have extremely strong permanent life products.
Clients who purchase Lincoln Financial Group term life insurance have great conversion options to a few of their flag ship permanent life products such as the Wealth Advantage IUL and the Accumulator IUL.
They have two term products which best serve clients ages 18-50 and 50-85.
Their TermAccel product is especially strong for those of you under the age of 50 and looking for $500,000 or less in life insurance coverage.
If you’re looking for more than $500,000 or you’re 50 years of age or older, the Lincoln LifeElements life insurance product will work great for you.
You need to make sure you’re getting the right policy for your situation to ensure you’re never over spending on your life insurance.
BEST UNIVERSAL LIFE INSURANCE COMPANY
Lincoln Financial Group
Sometimes it’s hard to put the same life insurance company in two categories, but we’re a firm believer Lincoln not only has term life insurance locked up, but definitely universal life.
The reason why is Lincoln’s cost of insurance is extremely competitive across their suite of universal life insurance products. This means in many cases they can offer better pricing and performance based on their updated mortality tables.
Keeping their tables updated consistently allows them to keep up with technology which is allowing many people to live longer. If people are living longer, doesn’t it make sense for life insurance companies to adjust their rates to match those statistics?
BEST WHOLE LIFE INSURANCE COMPANY
Northwestern Mutual Life Insurance
Northwestern Mutual is a contender in every category, but the reason we consider them the best whole life insurance company is due to their historic dividend performance. They announced in October of 2017 that “policy holders will receive an estimated 5.3 billing through its 2018 dividend payout.”
This payout comes with 147 years of dividend paying history as well as leading the industry in whole life insurance sales.
The most common whole life insurance product sold by Northwestern Mutual is their paid to 65 whole life (65 Life). This means when you purchase a 65 life policy from Northwestern Mutual, you will only pay your premiums until you turn 65. At that point, you will have a paid up whole life policy which will guarantee your ability to leave a legacy to your family.
BEST NO MEDICAL EXAM LIFE INSURANCE COMPANY
We had a hard time pinpointing the best no medical life insurance company. So below is a list of a few that we believe you should consider.
As you should expect from a company life Transamerica, they offer no medical exam life insurance for clients who’s busy lives cannot coordinate with a medical examiner. This doesn’t mean there isn’t underwriting, it simply means they don’t require a medical exam to get approved for life insurance. Transamerica offers up to $250,000 of life insurance with no medical exam. It’s not the highest no medical life insurance company, but it’s certainly one of the strongest.
We once heard a story from an agent regarding someone who needed $1,000,000 in term life insurance and used multiple no medical exam life insurance companies to meet the death benefit need. They used Illinois Mutual, Transamerica, Sagicor, Assurity, American Amicable, and Royal Neighbors, all great no medical exam life insurance companies.
BEST BURIAL INSURANCE COMPANY
Royal Neighbors of America
Based on our experience as a leader in the final expense burial insurance industry, we believe the best burial insurance company is Royal Neighbors of America.
Their whole life burial insurance plan has a level and graded option to meet the needs of their policy holders. This flexible underwriting allows them to appeal not only to those that are healthy, but also to those with impaired risk conditions or pre-existing conditions.
Another reason we believe Royal Neighbors is the best Burial insurance company is they provide a free simple will to each of their policy holders. Not only are their rates extremely competitive, they’re also going above and beyond to provide a service for their customers to properly leave a legacy to their family.
How to choose the best life insurance company
What does “best” mean in the life insurance business?
Just like any business, it’s a combination of all the things the company provides for its customers, whether it is fast and courteous customer service, the lowest rates or the most locations.
It goes back to the old saying of “good, fast, or cheap, but you can’t have all three”.
When you search online for “best life insurance companies in 2018” the lists you’ll see are typically influenced most by their financial performance. It’s certainly hard to argue with that when you’re in business to protect people, and the products you sell must last 20, 30, 50 years or more.
A lifetime. Your lifetime
Lean on your agent to find the best life insurance company
The best way to evaluate a life insurance company is to lean on your insurance agent for the analysis. Far and away the most important factor is the company’s rating.
As we mentioned, we work with A-rated companies unless a client’s specific situation requires we expand our search below the A rating. When this happens, it is often driven by a client’s health condition or a medical exam that uncovers pre-existing conditions.
Six questions we encourage you to research or ask your agent to determine the best life insurance company for you:
- What is the life insurance company’s historic claims paying ability?
- How many policies did the life insurance company rescind in 2017?
- Does this company offer life insurance that fits my objective?
- What are my conversion options if I buy term life insurance and later want to convert to permanent (universal or whole life).
- How will my age and health impact the cost of insurance and monthly premium?
- Are you a captive or independent agent?
Best life insurance companies’ ratings
It starts with the pocket book: yours and the insurance company’s.
Ratings play an important role in assessing the financial strength of an insurance company. This is especially important when it comes to life insurance as your policy is pointless if the company that issued it doesn’t have the financial strength to pay your claim 10, 20, 30 years or more in the future.
We we always urge customers to review the financial stability of a life insurance company.
There are four well-known rating services that conduct thorough research on life insurance companies:
These companies get into every nook and cranny of a life insurance company’s financial business to help consumers separate the good from the not so good. These ratings, ranging from A+ to F, consider many factors along with company financials, such as complaints received from the public and data from many public sources.
Don’t confuse insurance company ratings with recommendations
But, ratings should not be confused with recommendations. Financial strength ratings miss the customer service component of the company’s business. In your evaluation of an insurance company you want to know that it has a track record of positive interactions with customers. The Better Business Bureau is also a good place to check customer service complaints.
Important tip: If your current life insurance agent isn’t providing you an annual review of your policies then you should either ask them to do so or, get on google and search “life insurance agent near me” and find someone new.
Your tolerance for risk is critical in choosing the best life insurance company
You may be wondering what “risk” there is in insurance. Isn’t insurance supposed protect me from risk?
Of course, but with more than 800 life insurers in the U.S., you are going to get a wide range of approaches to the market with products, price and service.
And, then there’s the rating of the company.
Pay attention, because this is where it gets important. At the beginning of this article we identify 10 insurance companies that are solid, safe and secure. They are all A-rated companies. And, there are many more that earned high ratings beyond these 10 and deserve your consideration.
However, there are also many rated below “A”, so it’s important to factor in what kind of risk is involved with the company you are choosing. For those that like to avoid risk, you might choose a brand name carrier, even if it has a higher rate. However, others might prefer a lesser-known brand that offers low rates. It’s all personal preference and comes down to the risk you are willing to take.
Many options to find the best life insurance company
If your goal is the best coverage at the best price, there are many outstanding A-rated companies. Following is a list of the best life insurance companies we like, all of which are A-rated companies:
- AIG Life Insurance Company (Make sure you get a quote with AIG Partners Group which has the QOL riders included. There is a big difference in the policy from AIG if you strictly shop their brokerage product. Make sure you are getting AIG with QOL riders included)
- Mutual of Omaha Life Insurance Companies
- Protective Life Insurance
- Sagicor Life Insurance
- Banner Life Insurance Company
- Savings Bank Life Insurance Company of Massachusetts (SBLI)
- American Amicable Life Insurance Company
- ANICO Term life insurance
- Lincoln Financial Group
- Columbian Life Insurance Company
- North American Life Insurance Company
- Allianz Life Insurance Company
- Protective Life Insurance Company
- Gerber Life Insurance Company
- Nationwide Life Insurance Company
- Mass Mutual Life Insurance Company
- National Life Group
- Life of the Southwest
- United Home Life Insurance Company
- Assurity Life Insurance Company
- Axa Equitable Life Insurance Company
- Aetna Life Insurance Company
- American Equity Life Insurance Company
- Boston Mutual Life Insurance Company
- Voya Life Insurance and Annuity Company
- Royal Neighbors of America Term Life Insurance
While it’s good if you can do research on your own, remember that it is your agent’s job to educate you on those options.
Important tip: If you receive a rate for a policy that seems unusually low then you must ask the agent how does the company keep its rates that low. If it’s too good to be true…
Life Insurance premiums (price) and how they are calculated
Once you’ve decided on a couple of insurance companies to explore further, getting life insurance policy quotes is easy and fast. Life insurance is priced based on risk to the insurance company. It’s purely mathematical. There’s no negotiating on price.
At the same time, there are more than 800 different insurance companies and, to survive, they sometimes have to be aggressive on their pricing, especially those that aren’t household names. And, being aggressive on their price is all about how much risk they are willing to take.
Age and health key factors in how insurance companies manage their risk
For example, if you’re a 25-year-old male who is not overweight, in good health and doesn’t smoke, you’re going to find a lot of insurance companies who want your business.
On the other hand, if you’re a 58-year-old male who is overweight, smokes and has Type II diabetes, you are going to need an experienced agent to find the right insurance company willing to take a risk on you.
**Tip: Prudential is a great company for impaired risk life insurance
You will likely be asked to take a medical exam. They are definitely there, but be prepared to pay.
This example is what many seniors today face. The best life insurance company for seniors is one with a proven record of flexibility with seniors. While age and health conditions raise the risk for insurers, there are many companies PolicyZip works with whose customer service is very friendly to seniors.
The price you pay for life insurance is simply about how much risk an insurance company is willing to take on you, which is why it is so important to have an independent insurance agent shop the market for you.
Which of the best life insurance companies should you choose?
This is where an agent will be most helpful to help you choose the best life insurance company to meet your needs. With more than 800 companies that sell life insurance, trying to come up with a list of the best life insurance companies would be overwhelming. However, when you strip away the sales and marketing, life insurance is life insurance. It’s pretty simple.
If you’re looking for peace of mind, then you’re probably best choosing a well-known insurance company. If you’re more interested in finding the lowest cost insurance, then your options widen dramatically.
Knowing your needs will help your agent narrow the list very quickly. At PolicyZip, we have found a handful of insurance companies—all A-rated—that are customer oriented and affordable. They may not always be the cheapest, but they are consistent and financially solid.
Four most important issues to determine best life insurance policy
So, with your choice of insurance company in hand, there are a few critical questions that will determine what kind of coverage you can purchase:
- What is your age?
- Do you suffer from any pre-existing health conditions?
- What medications are you taking?
- Do you currently use tobacco, e-cigs, vape, or smoke marijuana?
The final step is deciding the type of insurance you want to purchase.
Do you want term life insurance, whole life insurance, guaranteed universal life insurance, or burial insurance? Not sure the difference between term and whole life insurance (see the section below on the different types of life insurance)?
Most of our clients end up choosing term life insurance simply because it costs less than whole life. The nice part about term life insurance is that it’s an easy decision and you can always convert it to whole life or universal life down the road.
The devil is in the details. Find an independent insurance agent who can help you find the best life insurance policy option for you.
Types of life insurance, companies and agents to consider
There are roughly 800 insurance companies today that offer a dizzying array of products and services. Those of us in the business are continually amazed at how these companies continue to innovate and bring new products to the market.
The easiest way to think about your options when buying life insurance is that you have two paths to take: term or permanent. From there, well, it can get confusing, but stay focused because there are many outstanding products, one that will likely meet your exact needs. Here are a few to consider:
Term life insurance: Most basic, affordable
What is term insurance?
Term life insurance is easily described as temporary. Temporary insurance for temporary risks. There is no asset, there is no cash value, there is simply a predetermined death benefit for a temporary period of time such as 10, 20, 30 years and sometimes longer.
Also, many companies offer a one-year renewable term products known as “annually renewable term ART). One of the most commonly known companies for ART insurance is American National (ANICO).
The premium remains fixed for the duration of the insurance policy and can either be converted to permanent prior to expiration or expires at the policy termination date. If the insured survives past the term they will have to re-qualify for insurance if they want continued coverage.
Often the premium will be much higher. Some term policies allow the policyholder to convert to permanent coverage.
Getting term insurance quotes from an independent insurance agent is very easy.
Return of Premium Term Life Insurance: Option if you outlive your insurance
This is term life insurance that allows the insured to recover some or all of their premiums paid over the term of the insurance policy, if they do not die during that time period. These types of policies are more expense than a standard term life insurance policy. Before buying this type of product, we urge clients to also evaluate other ways they could invest the additional premium cost, such as equities, bonds, etc.
Whole Life Insurance: Lifetime coverage, peace of mind
This is the most simple and popular form of permanent insurance. As long as the insured pays the premiums, which are locked in while the policy is in force, the policy will cover that person for their lifetime.
The ideal scenario and best use of a whole life insurance policy is buying it at a young age, when you are presumably healthy, and keeping it the rest of your life, regardless of your age or health issue.
There is another significant benefit of whole life: cash value that builds on a tax-deferred basis, which means the gain will not be taxed until it is withdrawn. In some cases when policies are illustrated correctly, life insurance can provide tax-free policy loans.
Imagine the compounding effect of this if you purchase whole life at an early age. Some whole life policies pay dividends, and they are also not taxed because they are considered a return of the premium.
Universal: Options to grow cash value
Universal Life is another form of permanent life insurance. Whole and universal are similar in that they build cash value and the funds grow tax-deferred.
However, universal life has a more flexible option on how the premium dollars are distributed. A policyholder can choose how much of the premium is dedicated to the death benefit versus the cash value. And, the policyholder always has access to their cash value account, which can be withdrawn or borrowed against for any reason.
Variable and Variable Universal Life Insurance: Expanded options to grow cash value
Variable life insurance policy is also a form of permanent life insurance. Along with the death benefit and cash elements, the insured has the option to participate in investment vehicles like stocks. This is a two-edged sword: there is a chance the funds will grow at a faster rate than funds in a regular whole life policy, however that also means there is more risk because they are exposed to the movements of the investment markets.
A variable Universal life insurance policy is similar to universal, except the insured can participate in other investment tools such as mutual funds. The policyholder can to invest the cash in their policy into different types of investments such as mutual funds. There is no guaranteed minimum cash value with variable universal.
Indexed Universal Life Insurance: Cash value mirrors index markets
Similar in concept and function to variable universal life, the cash component of indexed universal grows as a result of index performance (e.g. Dow Jones Industrial Index, Standard and Poor’s 500, etc.). The index is determined by the client and/or the investment advisor.
Survivorship Universal Life Insurance: Affordable, solid planning tool
This type of life insurance policy is designed to cover more than one person; a married couple for example. One of the most common uses of survivorship life is to cover the first to die, paying the survivor when the first person dies. It is a flexible tool that is often cheaper than each person having individual life policies.
Survivorship Whole Life Insurance:
Often called second-to-die life insurance, a survivorship whole life insurance policy is designed for two people, and pays the death benefit with the second person dies. This type of whole life insurance policy is often used to pay estate taxes. However, there are many other uses.
Single Premium Universal Life Insurance: Flexible, accessible
This type of life insurance policy allows those with disposable cash to pay a lump sum into a life policy for a death benefit that will be paid up until the insured dies. The amount of the death benefit is determined by the amount of money invested initially.
The single premium product has several other benefits. The cash value builds faster because the policy has been fully paid. Also, many single premium policies have what is called “living benefits”. For example, some policies allow tax-free access to the amount of death benefit to pay for long-term care costs.
Guaranteed Universal Life Insurance: When you’re in between whole and term
What about the person who can’t afford a whole life insurance policy and finds the fixed period of term insurance insufficient for their needs? Guaranteed universal life is guaranteed for life, but unlike whole insurance, does not build cash value. It allows the insured to keep premiums lower than whole life, yet get the insurance benefits.
Burial Insurance: Affordable, guaranteed end of life insurance
This important whole life insurance policy is typically purchased to cover the cost of a funeral and burial and, sometimes, other expenses that must be paid to close an estate, such as credit cards and other types of small loans or bills. The average cost of a funeral today is almost $10,000, and can be much more. Burial insurance policies are typically capped at around $25,000, depending on the insurance carrier.
A burial insurance policy typically serves those between the ages of 50-85. Some insurance companies will insure people older than 85. The cost of these types of policies are typically affordable, and acceptance is generally high.
The structure of the insurance company matters
There are two broad types of insurance companies: a mutual life insurance company, and a stock-held life insurance company.
Mutual Life Insurance Company
A mutual company is owned exclusively by the policy holders. Which means the excess gains and funds acquired throughout the year are distributed back to policy holders. The dividend payout plus the policy guarantees in a whole life insurance policy are what attribute to why whole life insurance is as competitive as it is.
Stock-held Life Insurance Company
A stock-held company is simply public company owned by the holders of its stock vs. the policy holders. Largely one of the biggest reason most people buy whole life insurance from mutual companies vs. stock companies.
Three Types of Life Insurance Agents
There are three broad types of life insurance agent: a captive life insurance agent and an independent life insurance agent, and a career life insurance agent. And, there is a significant difference between the three.
Captive Life Insurance Agents
Captive agents are employed directly by an insurance company and, often, can only sell the products offered by that company. Some insurance companies allow their agents to sell other products, but the breadth and selection of those products is typically limited. But, even then, the agent’s primary focus and what they are evaluated on is selling their company’s insurance.
Independent Life Insurance Agent
Independent agents are self-employed rather than employed directly with one insurance company. By being self-employed they can get life insurance policy quotes from just about any insurance company. An independent insurance agent is often called a broker.
By offering many different insurers at once, independent agents can ‘shop your rate’ quickly and efficiently. A knowledgeable independent insurance agent is well-versed with different products and their underwriting guidelines. If you want access to a mutual life insurance provider’s policy, however, they may not be able to assist you.
Career Life Insurance Agent
Career life insurance agent is sort of a mix between Captive and Independent.
How can that be?
For example, Northwestern Mutual is largely thought to be a captive organizations, meaning agents can only sell Northwestern Mutual. However, that is incorrect.
While these agents still need to maintain their production numbers from the insurance company, they have the ability to write “outside” business when the situation makes sense for the client.
Career agents can typically offer all life insurance companies including the career organization they are working with. However, they are still limited from offering other captive insurance companies as options.
How Much Life Insurance Do I Need?
It all starts with your specific needs. There are two broad types you can consider: term or permanent insurance.
- If you need a life insurance policy to last your entire life, then start with permanent (or whole life).
- If you just need life insurance for a specific time, choose term insurance (in many cases term can be converted to permanent insurance).
How much insurance should I buy?
A rule of thumb you’ll often hear from agents in the life insurance business is to buy 10-20 times your salary. This is only a rule of thumb. Many clients purchase 15 and sometimes 20 times because they identify future costs and obligations that they want to ensure their family will be able to handle after their death.
Regardless of the type you purchase, the amount you need will be based on several important factors. Here are five factors we encourage clients to consider:
- Amount of income you will need in the future
- Assets, such as stocks and real estate, that will supplement your income
- Liabilities, such as loans
- Life insurance you own today, either individually or through your work
- Significant one-time or ongoing costs your family will face in the future, such as college educations
Follow these 4 simple steps to determine how much life insurance you need.
- Debt: Calculate your total debt
- Income: Calculate your annual income times the amount of years you want that income to continue for your family. For example, $60,000 salary will continue to pay your family for 20 years. $60,000 x 20 years = $1,2000,000
- Mortgage: Calculate how much you owe on your mortgage
- Other costs insurance should cover:
- Education (children, grandchildren)
- Home purchase and/or improvement
- Changing jobs
- Start a new business
- Charitable donations / contributions
- Funeral Expenses
Using this simple four-step process makes determining the amount of life insurance you need easy.
Some people purchase mortgage protection insurance which does exactly what it says: pays off your mortgage in the event of your death. This coverage lasts the length of time of your mortgage. An option we recommend is a decreasing life policy, which means the amount of insurance coverage decreases as the mortgage is paid down. These types of policies are typically less expensive than fixed life insurance policies.
Best Insurance company customer service
The demands on insurance company customer service have never been higher. While more and more customers today solve service problems or questions over the internet and never speak to a person, the expectations for customer service have nonetheless increased.
That seems counter-intuitive, but just think about yourself. Today you probably carry a smart phone just about wherever you go. You likely have either a tablet or laptop computer nearby or at home. And, you communicate is many ways: phone, email, text, social media and on and on. Having all this at your fingertips is second nature to you.
The technical complexities for the insurance company to tie all these devices together to present a seamless experience for you are—no exaggeration—staggering.
And, it’s not just the devices that make it complex. Consumers are relentless when it comes to shopping for a life insurance company. Here’s an example:
- The majority first do research online. There are many resources to help consumers compare life insurance companies. Then, they might search for reviews. And, it’s more common every day for them to blast out a note to their social network friends to get their advice.
- The next task is to get a few quotes online. Again, there are many resources for this.
- Then they need to find an agent. They probably have a person they have worked with, but it’s not uncommon for consumers to shop. So, they pull out their smart phone and search. Of course, they want the capability to be able to call any agent they choose right from their search.
- After the conversations, they then go to LinkedIn to learn more about the agent.
- Now they are ready to buy, and they have many options to start the process: email, phone, text, chat or possibly Skype.
Your independent insurance agent is the best source to help you find an insurance company with top-rated customer service.
What makes customers happy has not changed
It’s no secret the life insurance business has lagged in building the capabilities for customers to easily navigate through the many components of an insurer’s business. What hasn’t changed are the most important things about customer service that satisfy customers:
- Courteous employees
- Knowledge and professionalism
- Easy to do business with
- Easy to understand process and procedures
- Fast service (in the case of insurance, the customer getting paid quickly)
You could go back 50 years and these five needs would have popped up as most important.
There are ways to check up on insurance company custom service quality
As with any industry, the level of customer service you receive from a company can vary widely. This will be the hardest component of an insurance carrier’s reputation to judge.
You can first ask around from people you know for a reference to a company or agent who they were exceptionally satisfied with. You can also read reviews online, dial a few companies to see how quickly you can get access to someone, or even reach out to several agents to see who is most responsive and helpful.
Of course, the Better Business Bureau might help, too. It is one of the easiest places to quickly search and find formal complaints filed against an insurance company. Just remember, a company can still keep a high grade even with a large number of complaints.
Best insurance company customer satisfaction
From the latest industry report by J.D. Power, life insurance companies hit an all-time customer satisfaction record in 2017. Here are the highlights:
- “Record high customer satisfaction: Satisfaction among individual life insurance customers has reached an all-time high of 785 (on a 1,000-point scale), up by a significant 16 index points from 2016.”
- “Price is a key driver of higher satisfaction: The increase in overall satisfaction among life insurance customers is being driven by improvements in all studied factors, but price emerges as the highest-weighted factor with the largest year-over-year improvement. Price satisfaction has jumped to 764 in 2017 from 747 in 2016.”
- “Improved engagement among new customers helps drive price satisfaction: Price satisfaction increases the most among newer customers—those who have a tenure with an insurer of less than four years—improving by 35 points in 2017, compared with a 13-point increase among those who have been customers for more than three years. The proportion of newer customers who say they “completely understand” their billing statements has increased by 20 percentage points year over year.”
- “Discounts matter, but wearables fail to gain traction: Discounts have a significant effect on overall satisfaction and particularly price satisfaction. The specific discounts driving the highest overall satisfaction are multiple policy discounts. The much-hyped use of wearables as a discount tool has failed to gain any significant traction as of this year’s study.”
Following are J.D. Power’s latest rankings for life insurance companies:
- State Farm Life Insurance
- MetLife Life Insurance
- Pacific Life
- Nationwide Life Insurance
- Northwestern Mutual Life Insurance
- Guardian Life Insurance
- Mutual of Omaha Life Insurance
- Penn Mutual Life Insuranc
- MassMutual Life Insurance
PolicyZip has great relationships with many of the best life insurance companies, including Voya, Lincoln National, AIG Partners Group, SBLI, Banner, and many others.
Top 10 largest insurance companies today
Size doesn’t always equate to the best customer service, but it’s a good start. Here are this year’s largest life insurance companies by market share (you’ll see several familiar names from our top 10 best life insurance companies list at the beginning of this article):
|Company||Direct Premium||Market Share|
|Metropolitan Life Insurance Company||$ 13,356817,802||8.39%|
|Northwestern Mutual Life Insurance||$10,123,987,236||6.36%|
|New York Life Insurance||$8,822,266,796||5.54%|
|Prudential Life Insurance||$8,626,713,484||4.42%|
|Lincoln National Group||$6,731,270,174||4.23%|
|Mass Mutual Life Insurance||$6,176,244,595||3.88%|
|John Hancock Life Insurance||$4,755,478,621||2.99%|
|Transamerica Life Insurance||$4,483,371,714||2.82%|
|State Farm Life Insurance||$4,232,704,277||2.66%|
|Minnesota Mutual Life Insurance||$3,815,847,464||2.40%|
So, what is market share and why is it important?
Market share is the portion a company maintains of the overall activity or business in its industry. This number is compared to their competitors which populates the list above.
For life insurance, it’s the total amount of premiums paid to the insurance company for life insurance in a given year.
Market share is simply one way to compare life insurance companies. It does not consider many other factors such as financial strength, as indicated by the major rating services, or customer service.
Still have questions? Review our blog or frequently asked questions for more information about how you can secure the best life insurance rates, every time!
You can also get a quote directly on this page, and see your possible rates instantly. You’ll get quotes from more than 50 companies, and it takes less than a minute.
All reviews are our own, based on our own criteria, knowledge, experience, customer reviews, and more, and are not endorsed by any company. You can get a life insurance quote using the form on this page, or contact us directly for more a more accurate idea given your own situation.