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The following companies are our partners in Life Insurance: American National, AIG Direct, New York Life, PolicyGenius, United of Omaha Life, Haven Life, Fidelity Life, National Family Assurance, Federal Trust, Health I.Q., Life Insurance Lab, and Ethos.
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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.
How We Compare Life Insurance
Premiums Written 2016
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.
NAIC Complaint Ratio 2016
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.
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.
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.
Level term life
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.