Best Life Insurance Companies for 2023

Buying the right insurance is essential to protecting yourself and your loved ones. Life insurance is one of the most important types of insurance if you have people depending on you. This guide will help you find the best life insurance companies and the right type of policy for your needs.?

Life insurance is a type of insurance policy. It provides financial protection for those who depend on you. When you're covered by life insurance, the policy pays out a death benefit if you pass away.?The beneficiaries you designate to receive the death benefit can use this money to replace your income. They can also use it to pay for services you provided.?

Some life insurance policies are also a type of investment vehicle. They acquire a cash value. You can borrow against them. And with the best life insurance companies, you also have options for withdrawing some money or cashing in your policy. ?

You can also buy more protections from the best life insurance companies. These are called riders. They're another form of protection in addition to the death benefit. For example, you may have the option to add long-term care insurance. Or you may be able to get guaranteed income for your family.

Want to protect your family? Check out The Ascent's guide to the best life insurance for families.

There are two primary types of life insurance: "term life" and "whole life." While both provide a death benefit, they have some important differences.?

Term life insurance

Term life insurance is a type of life insurance in effect for a set period of time. It pays out a death benefit to your designated beneficiaries if you die while coverage is active. It is solely a life insurance product, with no investment component.

Term life insurance is much more affordable than whole life insurance. That's especially true if you shop around for the best life insurance companies. In fact, whole life premiums often cost four times more than a term life policy. However, term life insurance gets its name because it’s in effect only for a limited period of time. It's common for policies to have a 20- or 30-year coverage term.?

If you pass away while your policy is in effect, the insurance company will pay a death benefit. This money goes to whomever you designated as beneficiaries. You can choose the amount of your death benefit. Some policies could provide millions in coverage. The best life insurance companies give you a wide choice of coverage amounts. However, the larger your death benefit, the costlier your premiums.?

If you don't die while your policy is in effect, your policy will simply expire at the end of the term. Your death benefit will never be paid out. With the best life insurance companies, you may have the option to buy a guaranteed renewable term policy. That means you can extend your term of coverage if you'd like. But premiums could go up when your life insurance coverage renews.?

Whole life insurance

Whole life insurance is a type of life insurance policy that remains in effect for your entire life as long as you pay premiums. As long as you don't let your policy lapse, your insurance will pay out a death benefit when you die. Whole life policies also have an investment component and acquire a cash value that you can borrow against or cash out.

You won't have to worry about whether you can renew your coverage. And you won't have to think about whether your premiums will go up. Whole life policies are much more expensive than term life insurance. That's true even with the best life insurance companies. But as long as you keep paying premiums, your beneficiaries eventually get the death benefit.?

One reason whole life policies are more expensive is that they are also an investment vehicle. That’s true even with the best life insurance companies. Your policy accrues a cash value over time. You're eventually able to access it. You can withdraw some of the money, borrow against your insurance policy, or surrender your policy.?

There are tax benefits associated with investing in a whole life insurance policy. However, many financial experts believe you can earn a better return on investment elsewhere. Most recommend buying term life insurance from the best life insurance companies and keeping your investments separate unless you need lifetime insurance coverage.?

The first decision to make when buying life insurance is whether to buy term life or whole life. Here's a rundown of which policy type is best for specific needs, along with pros and cons of each.

Term life insurance:

Best for: Term life insurance is best for people looking for the most affordable insurance protection for a limited time.

Pros

• Lower premiums than whole life insurance
• Death benefit never changes
• Option to add coverage features

Cons

• No life time coverage
• Premiums can increase during policy renewal
• Policy doesn't pay out if the policyholder passes away outside of the coverage term

Whole life insurance:

Best for: Whole life insurance is best for people looking for lifetime protection and a policy that also serves as an investment.

Pros

• Lifetime insurance coverage
• Premiums never increase
• Policy serves as an investment that acquires cash value

Cons

• More expensive premiums than term life insurance

What is no exam life insurance?

When applying for a standard term or whole life policy, insurance buyers must go through a medical underwriting process.

They must provide health information so an underwriter can assess their risk of dying during the coverage period. In many cases, insurance buyers will also need to undergo a medical exam as part of the medical underwriting process.

No exam life insurance is life insurance that is sold to consumers without requiring a medical examination. There are different kinds of no exam life insurance to be aware of.

Guaranteed issue policies do not require a medical exam or any type of medical underwriting. They tend to be expensive, offer limited coverage, and have long waiting periods before the full death benefit will be paid. They are usually a good option only for individuals who don't qualify for traditional life insurance.

There are other no exam policies available, though. These policies are available through companies that use algorithms and the insurance buyer's answers to health questions to qualify them for coverage. Companies that offer these types of no exam policies often offer term life insurance at comparable rates and with comparable death benefits to policies that do require medical exams. For those who qualify, it can be much simpler to buy coverage from one of these insurers.

Before purchasing a no medical exam policy, be sure to research the terms carefully to understand both coverage and cost. It's also important to remember that life insurance medical exams often aren't a big deal. The insurer covers costs and the exam involves a simple general assessment of health status.

Choosing the right life insurance requires taking several steps. Here's some of the things insurance buyers should do to get the perfect policy in place.

Research types of life insurance

There are different kinds of life insurance policies, including the following:

• Term life: Term life policies are designed to be in effect for a period of time when coverage is needed, such as 20 or 30 years. They are typically the most affordable type of life insurance and they do not include an investment component. No death benefit is paid if the insured person does not die during the coverage term, and the policy does not accrue a cash value.
• Whole life: Whole life policies are designed to be in effect indefinitely. Policies typically cost six to 10 times what a term life policy would cost. However, whole life policies have an investment component. The policies accrue a cash value and they can be cashed on or borrowed against. The death benefit is also paid out any time, as long as the policy has not been canceled and payments have continued.
• Guaranteed issue: Unlike most life insurance policies, these do not require a medical exam or traditional underwriting. Guaranteed issue policies generally have lower coverage limits and there is usually a waiting period before the full death benefit is paid out.

Term life is best for most people. However, those who cannot qualify for a term life policy due to pre-existing medical conditions may want to consider guaranteed issue coverage. And people who will need lifetime coverage (such as parents of disabled children who will need financial support after a caregiver's death) may want to look into whole life plans.

Decide how much coverage you need

The next key step in purchasing life insurance is to determine how much coverage to buy.

Some experts recommend purchasing policies with a death benefit equal to 10 to 12 times annual income. This is a simple approach to estimating coverage needs. However, the DIME formula provides a more precise method of calculating coverage needs. This formula suggests insurance buyers purchase a life insurance policy large enough to do the following:

• Debt: The policy should repay all outstanding debts.
• Income: It should replace the deceased's income for the desired number of years.
• Mortgage: The death benefit should be large enough to fully pay off a home mortgage.
• Education: The policy should cover full educational costs for any children.

Obtain several life insurance quotes

After determining the desired type of policy and necessary coverage amounts, it's time to shop around for life insurance. This means obtaining several life insurance quotes. It's a good idea to get at least three to five quotes from different life insurance companies.

Many insurers provide quotes online. Or an independent insurance agent can help consumers shop around with different carriers to explore coverage needs.

Insurance buyers should look at premium costs, but also other key criteria as well, including:

• The insurer's reputation for handling claims: JD Power provides data on consumer satisfaction with different life insurance carriers and the National Association of Insurance Commissioners maintains a complaint database consumers can search.
• The insurer's financial reputation: AM Best provides grades indicating an insurer's stability.
• Add-ons and riders: Consumers may want to find a life insurer that offers certain types of add-on coverage, such as a return-of-premium rider that allows premiums to be repaid if the death benefit on a term life policy is not paid out, or a terminal illness rider that allows earlier access to death benefit funds in the event of a terminal diagnosis.

Submit an application

After reviewing all of these details, insurance buyers can choose which insurer to submit an application to.

Insurers often ask for extensive medical information during the application process and a medical exam may be required. Be sure to leave time to complete this step and get coverage in place when it is needed.

Life insurance costs vary depending on many factors, including:

• Policy type: Whole life policies generally cost around six to 10 times more than term life coverage. Guaranteed issues policies are also expensive relative to the extent of protection they provide.
• Age: Those who purchase life insurance at a younger age can expect to pay less for coverage.
• Health status: People with no medical issues will pay less for life insurance than those with health problems.
• Smoking status: Smokers will pay much more for life insurance coverage.
• Insurance carrier: Some companies are more expensive than others.
• Add-ons: Purchasing additional protections can result in higher monthly premiums.
• Term length: Policies with longer coverage terms will come at a higher price.
• Death benefit amount: The larger the death benefit, the more expensive the coverage is likely to be.

The difference in cost from one policy to the next can be substantial. For example, while the average cost of a term life policy purchased at a young age could be around $30 for someone with no health issues, older smokers could pay $1,000 per month or more for similar coverage.

Life insurance coverage insures against the loss of your life. If you pass away, your beneficiaries receive a payment. You can also add riders or optional additional coverage. The best life insurance companies offer many options for riders to customize your coverage. The most important coverages are listed below, along with common riders.

Accidental death

Your beneficiaries get an additional payout if you die as a result of an accident. This is commonly referred to as the death benefit. With the best life insurance companies, beneficiaries often receive double the death benefit from the accidental death rider.?The death benefit is the most important coverage.

Long-term care

This adds long-term care insurance. Long-term care coverage can be purchased separately. However, bundling your coverage means you avoid having to buy an additional policy. The insurance will cover you if you have to go into a nursing home. It also pays for long-term care at home.

Family income benefit

Your loved ones will receive regular monthly income for a period of time if you die.?

Return of premium

Premiums paid for term life insurance are returned if you don't pass away during your term of coverage.?

Waiver of premium

Premiums are waived if you become permanently disabled. This means you can keep your life insurance coverage even if you can't work.?

Life insurance provides a death benefit in almost all situations when someone passes away. A death benefit is typically paid out:

• If someone dies of an illness, such as cancer or heart disease.
• If someone dies as a result of an accident
• If someone dies due to a homicide

Some life insurance policies will not provide a death benefit if the covered person dies by suicide within a certain period of time after the policy is purchased.

The life insurance death benefit can be used for anything that the beneficiaries desire, from debt repayment to funeral expenses to daily expenses.

Life insurance buyers can also add additional coverage in the form of riders. This means that in addition to paying a death benefit, the life insurance policy might offer these extra protections:

• Guaranteed renewability: This allows a policyholder with term life coverage to renew the policy at the end of the term regardless of any health conditions that have developed
• Guaranteed insurability: This allows the policyholder to buy additional coverage without undergoing more medical testing
• Accidental death coverage: This provides an additional payment if the death occurs due to an accident
• Accelerated death benefits: This allows for funds to be paid out to a policyholder who has become terminally ill even prior to their death
• Child term coverage: This allows for a covered parent to add on a term life insurance policy for a child
• Long-term care coverage: This would pay for custodial care in a nursing home or home care setting if this type of care becomes necessary

Insurance buyers should research these options to ensure they are getting the right coverage for their needs.

Life insurance would typically not provide coverage in the following situations:

• If a lapse in payment occurred
• If a policyholder misrepresented their health status when applying for coverage

Some insurers also deny coverage for high-risk activities like scuba diving or skydiving. And, if a policy has a waiting period, the insurer might pay out only a partial death benefit or no death benefit during that time.

Policies from the best life insurance companies can often be purchased at a very affordable cost. That's especially true if you opt for term life insurance. If you have loved ones depending on your income, buying a policy ensures they aren't faced with financial disaster if you die. Your death benefit could pay off your family's mortgage. Or it could pay for your child's education.?

Life insurance is also worth it if you provide important services to your family. These could include acting as a stay-at-home parent or caring for elderly relatives. If you pass away, your loved ones could use the death benefit to bring in paid assistance. If you have a business with others, a life insurance policy could also provide money for your partners to buy out your interest after your death. Or they could pay someone else to continue your work.?

For those with a need for lifetime income -- such as parents of disabled children -- life insurance can also be a life saver. A policy could ensure money is available to support their children for life.

Of course, to make sure your policy is worth paying for, it's important to understand your coverage options carefully. You'll want to research term insurance vs. whole life insurance. You'll also want to research riders to see if paying for the additional coverage is worth it. And you should get quotes from at least three different insurance agents. This will help you find the best life insurance companies for your situation.?

Life insurance can give you peace of mind as well as make sure you've provided for those you care about. Shop around for quotes today with no obligation to find out how much a policy will cost and determine if life insurance is right for you.

Want a large life insurance policy? Check out The Ascent's guide to million-dollar life insurance policies.

Life Insurance products are rated on a scale of one to five stars, primarily focusing on:

Customer Satisfaction

We look at overall customer sentiment from those who have direct experience with the specific life insurance company. This is compiled through researching publicly available data as well as survey data from visitors of this site.

Pricing

With so many options for life insurance across the board these days, it's easiest, and quite effective, to first look at the bottom line.

Policy Options

We look at the various options available and variety of insurance products offered that can better fit a range of consumers. The focus being on term and whole life insurance and the strength of those specific policy products.

Company Strength

We review the overall strength and health of the company as an indicator as that can highlight a stability that provides peace of mind. Company strength can include:

• Age of company
• Financial health
• Overall customer ratings