Life insurance is a protection policy against financial loss resulting from the premature death of the insured person. The named beneficiary receives the death benefit in consideration of the premiums paid by the policyholder, thereby relieving the financial impact of the death. The goal of life insurance is to provide some economic stability for your family after you die.

There are three main types of life insurance: term, which covers a set number of years; whole life insurance, which can be kept for the duration of your life; and universal or adjustable, which offers the flexibility to change your premiums and benefits. The three main components of a life insurance contract are the death benefit, or the amount the beneficiaries receive upon the death of the insured; the premium payment, which refers to the amount the insurer determines necessary to cover mortality costs; and cash value, which acts as a saving account that can become a living benefit.

Before obtaining a life insurance policy, it’s important to take into account your finances and the standard of living you wish to provide for your dependents or survivors. The amount you choose should be revised whenever a major life event occurs, such as marriage, divorce, the birth or adoption of a child, or after any major financial decision, like the purchase of a home or a new business.

When comparing providers, consider the company’s stability and reputation, the different policies on offer, and their customer support. Before making the final decision, carefully consider the coverage you need, how much you can afford, and what the company’s cancellation policy is. Finally be wary of agents who inflate your net worth to score a bigger commission, or sell you an annuity you can’t access for 10-15 years, without paying a pricey fee for early removal.


Top 8 Companies

#1
Our Partner
9.6 / 10
  • Get $250,000 of Term Life Coverage for as Low as $14/Month
  • Save up to 70% on your term life policy
  • Get a free, no-obligation term life insurance quote
  • Over 88 million customers worldwide rely on AIG
  • It takes 2 minutes to request your term life quote
#2
Our Partner
9.5 / 10
  • Up to $1,000,000 in coverage
  • Affordable and competitive rates
  • Immediate coverage decision
  • Commission-free
  • Available to adults aged 18-65
  • Comprehensive price comparison tool
  • Entirely online and intuitive application process
  • High quality policy backed by MassMutual, an A++ A.M. Best rated insurer
#3
Our Partner
9.2 / 10
  • How many hours do you exercise per week? You may qualify for special rates
  • Policies from a wide selection of top-rated carriers
  • Qualify through a quiz and your race results to save money
  • Advantages include athlete-friendly measurements and low-carb adaptations
  • Minimize the penalty for adverse family history if you are otherwise healthy
  • Licensed to help health conscious people in all 50 states
  • Our #1 Choice for runners, cyclists, triathletes, weightlifters, vegans, and more
#4
Our Partner
9.1 / 10
  • Rated A+ by the BBB
  • Simple online application
  • Safe and secure
  • Broad list of partnered companies to choose from
  • Find life insurance plans starting at $15/mo.
#5
Our Partner
8.9 / 10
  • United of Omaha Life Insurance Company
  • Get A Free Quote
  • For As Little As $8.80/month
  • For Ages 30-74
  • No Medical Exam
  • Affordable Premiums That Never Increase.  Explore Our Large Range of Benefits
#6
Our Partner
8.4 / 10
  • Simplified Term Life Insurance up to $150,000 for ages 35-64 
  • No medical exam or lab work - just health information.
  • $10,000 up to $150,000 in affordable coverage.
  • Get a free quote & apply online or by mail in minutes.
#7
Our Partner
8.4 / 10
  • A+ BBB Accredited
  • Get quick and easy life insurance quotes online
  • Term Life Insurance 10, 15, or 20 year period
  • Rated A- by AM Best
  • No obligation quotes
  • Choice of term or permanent life insurance
#8
Our Partner
8.2 / 10
  • $250,000 Term life insurance coverage in as little as 24 hours
  • Fast, free, no obligation online quotes
  • Simple term or whole policies
  • Policies tailored to customers 50+
  • Streamlined, easy-to-understand policies
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How We Compare Life Insurance

Financial Strength

40%

The financial strength of an insurance company refers to the overall stability of the company’s finances. Life insurance is essentially a long-term contract that isn’t paid out until much later in life. Because of this, it’s very important that the insurance company you go with has a positive long-term outlook. Otherwise, they may not be able to pay out any outstanding obligations to you and/or your beneficiaries should the company collapse or run into financial troubles.

To determine a company’s financial strength, rating agencies such as A.M. Best and Standard & Poor's compile data and use various sets of criteria to determine overall financial stability. They look closely at things such as creditworthiness and their ability to meet any outstanding obligations to policy holders. It’s a good rule of thumb to buy only from insurance companies that have high marks from the major ratings agencies.

However, understanding the ratings can be tricky. Each company uses a different scoring system, and the ratings they assign can seem intentionally vexing. For example, many consumers are quick to assume that an insurer with an A+ rating from Fitch is the best score possible. But the reality is that there are four scores higher than A+: AA-, AA, AA+, and AAA. Take some time to review the scoring criteria before placing too much value on what seems to be an excellent score, because oftentimes a score that looks impressive on paper really just translates to “good.”

Marketshare 2016

The company's market share is calculated by dividing the company's total premiums written by the sum of the life insurance premiums of all companies for the calendar year. This calculation provides the company's share of all premiums, in the U.S., for life insurance.

Premiums Written 2016

The sum of all life insurance premiums written in the U.S. by the company in the calendar year.

Company Type

We classify life insurance providers into three categories.

Underwriter: an insurance company that underwrites its own policies.

Subsidiary or Partner: a company either owned by an underwriter or who has partnered with a single underwriter for all of its policies.

Marketplace: a company that offers consumers quotes across multiple underwriters.


Customer Experience

25%

To this day, despite the ubiquity of online quoting platforms that connect clients to multiple companies, 80-90% of the business of life insurance is still done through face-to-face (or phone) interaction with traditional agents. Different companies have different requirements for their agents in terms of certifications and continuing education while employed.

According to JD Power 1 in 5 policyholders never heard back from their agent after purchasing life insurance in 2016. A lack of communication is often cited as the main reason a customer does not fully understand their policy, and therefore becomes unsatisfied, or lets their policy lapse. To rate customer experience we used 2016 National Association of Insurance Commissioners (NAIC) data on complaint ratios. This compares a given company’s complaints to the industry as a whole; it’s essentially a “complaint share.” We also took into account JD Power satisfaction scores from 2016 where applicable. 

NAICS Complaint Ratio 2016

This is a ratio of the number of complaints a company received to the its total premiums written in a calendar year. The median complaint ratio across all companies is 1. A score below 1 means the company received fewer than average complaints. A score above 1 means the company received a higher number of complaints than average.

JD Power Overall Customer Satisfaction Score

This score is based on how customers rate every aspect of their service experience with their current provider. The score takes into consideration four factors: price, policy offerings, statement and billing, and interaction with staff.


Policies

25%

To simplify things as much as possible, we can say that there are basically three major categories for life insurance, which are further divided into specific policies that give specific premiums, coverage, and payment terms/periods. There’s term life insurance, whole life insurance, and universal life insurance. Keep in mind there is no single best plan available, which is why it’s important that you determine your needs prior to researching to figure out which option is right for you and your family. Let’s take a closer look at each.

Policy Offerings

  • Term Life Insurance: Generally, this refers to life insurance plans that are short-term, or run for a pre-determined number of years (5, 10, 20, etc.). It’s purely a protection plan that pays out a predetermined sum if the insured individual(s) dies during a specific period of time. This type is the most common, and usually the one offered by employers as part of their benefits package. Most of the time, term life is an inexpensive insurance option, as the premium rate is locked in for the duration of the plan. Consider this option if you plan to be debt free when you reach retirement age and you just want coverage until your youngest child finishes college.

  • Whole Life Insurance: This is the first form of permanent life insurance, and it can be kept for the duration of your life. Monthly premiums are at a set rate, and they must be paid on time. With this type of coverage, most policies offer a tax-protected savings or investment component. As your cash value increases, you have the option to borrow against it, surrender the policy for a payout, or collect dividends on it. The premiums can be quite high, but the cash value benefits can be very useful for policy holders.

  • Universal Life Insurance: Universal insurance is a bit more complicated. The easiest way to describe it is to say it’s flexible, which is why it’s often called adjustable life insurance. The investment and death benefit portions are separated under this plan, which allows you to change your premiums and benefits to match your current budget. In the event that you run into unexpected financial trouble, you can reduce or stop your premiums and use your accumulated cash value to pay the premiums. Universal life insurance offers the most well-rounded protection to you and your loved ones.

  • Variable Life: lets you control your investments, in that you can allocate a certain portion of your cash value to an investment portfolio.

  • Variable Universal Life: Basically the same as universal life insurance, but it allows the policy holder to create sub accounts, similar to mutual fund accounts. Variable and variable universal life insurance plans are considered to be more risky due to the added investment options.

  • Indexed Universal Life: Universal policies that allow the insured to divert funds into equity index accounts.

  • Survivorship Life: Policies that insure the lives of two people. The death benefit is paid when the second person dies.

  • Guaranteed Acceptance/Final Expense: Policies that offer final expense coverage without a medical exam.

Policy Features

  • Term-Permanent Conversion: This allows policyholders to convert their term policy into a permanent policy. Guaranteed Level Premiums: this ensures that the premium amount won't go up during the term.

  • Guaranteed Renewability: this ensures the option to renew the policy when yours is about to expire, but you’re not ready to give up your coverage or convert to a permanent policy. This allows you to add an extra year instead.

  • Waiver of Premium: in the event that you become seriously ill or disabled, you no longer have to pay premiums on your policy --> allows people to benefit from the policy even if they can't work.

  • Accelerated Death Benefit: enables the policy holder to receive cash advances against the death benefit in the case of being diagnosed with a terminal illness.

  • Return of Premium: If you outlive your term policy, the company will return the premiums.


Flexibility

10%

Plan riders are add-ons that can be purchased to provide increased coverage or specific types of additional benefits. Each type of insurance will have varying riders, but there are some that are common across multiple insurance types.

Accelerated Benefits: Should the policy holder be diagnosed with a terminal illness, this rider grants early access to death benefits to help with the cost of treating a terminal illness.

Accidental Death Benefit: This rider pay an additional death benefit in the event that the insured dies accidently. Almost all of our Top 10 life insurance providers offer this benefit at an additional cost.

Additional Insured Rider: Extends coverage to an additional person, usually a spouse.

Child Rider: Additional coverage in the event of your child’s death.

Disability Rider: If the policy holder were to suffer some sort of injury that prevents them from working or seeking employment, this rider provides income to pay for expenses.

Final Expenses: This policy covers funeral expenses for the insured.

Guaranteed Insurability Option: This gives the policy holder the ability to guarantee future insurability at standard rates without further proof of insurability or a medical assessment.

Long-Term Care Rider: Covers the cost of long-term care if it’s needed at any point during the policy term.

This is just a sampling of attachments that can be made to your policy. Since these optional features have an impact on the level of life insurance coverage, they should be very important factors for you when purchasing life insurance. Every company will have different riders, and not all will be available for every type of plan. Do your research to figure out if any of these riders may be important to you and/or your family, either now or in the future of your policy term.


Customer Questions & Answers

Why get life insurance?

Life insurance is designed to help relieve the financial burden placed on families after the death of a loved one. A life insurance policy can help dependants meet unforeseen expenses such as hospital bills, funeral costs, and outstanding debt, and provide them an additional income for future living expenses like the cost of tuition for surviving children. Life insurance can offer families a measure of comfort in the face of uncertainty and grief by allowing them to plan for the future and meet their loved one's final obligations.

How does life insurance work?

Life insurance is a form of financial protection that pays out a sum of money after the death of an insured. An individual who purchases life insurance establishes a contract with an insurance company promising to disburse a predetermined death benefit amount to the policyholder’s beneficiaries in exchange for a set premium. Life insurance companies will base premiums on the benefit amount as well as a risk assessment that takes into account the age, medical history, and lifestyle choices of the insured. Insurers will also stipulate the exclusions or conditions under which they will not be held accountable to approve a death benefit, as in the case of suicide or fraud.

How much life insurance do I need?

The amount of life insurance you select should be based on your particular needs and those of your beneficiaries. Consider possible expenses your family may have to shoulder in the event of your passing, such as debts and funeral costs, and plan accordingly. Also take into account your beneficiaries’ future expenses, especially if you have children and would like to provide for their education. Before making a decision, calculate your monthly income and expenses to determine how much your family would have to cover in your stead.

How much does life insurance cost?

The cost of life insurance will depend on factors such as the age and health of the insured, as well as the death benefit amount selected. A younger adult with no history of health conditions, who leads a healthy lifestyle, will likely pay less in premiums than an older adult who smokes and has a higher risk of developing conditions such as heart disease or cancer. Life insurance companies will likely look at other details like the weight, family history, and driving record of the insured to estimate the individual's mortality and life expectancy, and with that the premium amount.

How are life insurance quotes calculated?

Life insurance quotes are calculated based on the insurance amount and type of coverage selected, and the health details of the insured. When requesting an online life insurance quote be prepared to provide information such as your sex, age, weight, health habits and conditions, zip code, and the life insurance option you would like to purchase. The health information required will vary from company to company, but an accurate quote will take into account as many details as possible.

Do you pay taxes on life insurance?

Life insurance premiums cannot be deducted from federal income tax reports because they fall under the category of personal expense. An insured may select to contribute premiums before or after tax, yet opting for pre-tax contributions may mean having to pay some taxes on the value of the life insurance on a yearly basis. If the life insurance policy is employer-provided, however, then the individual will not be responsible for taxes as long as the coverage does not exceed a certain amount. After the death benefit is paid out, beneficiaries are typically not responsible for federal or state taxes on the principal amount, yet may be responsible for taxes on the interest portion if the benefit is paid out in installments. Keep in mind that these are only general statements and that tax information will vary depending on the life insurance company and product selected.