Best Term Life Insurance Companies
How will you support your family if you die? Term life may be the answer (it's less expensive than you think). Read on for the top term life insurance companies.
 |
| © CreditDonkey |
Term life insurance offers coverage for a set period of time, also called a term. Terms can be anywhere from 1 to 30 years.
If you die during the term, your beneficiaries receive the death benefit. If you outlive the term, the policy expires unless you choose to convert or renew it (more on this below).
You may be hesitant to spend money on a life insurance policy, but term life insurance can be the most affordable option. Plus, the premiums typically don't change.
- Best for Seniors: State Farm
- Best for Young Adults: AIG
- Best for the Health-Conscious: Health I.Q.
- Best for Smokers: Legal & General
- Best for No Medical Exam: Haven Life
- Best for People Over 50: Transamerica
Get Quote
- Plans from $50,000 - $1,000,000
- Premiums from $8/mo
- 100% Online. Get a Quote in Seconds and Coverage in Minutes.
Keep reading to see whether term life is right for you.
- Who Should Get Term Life Insurance
- What to Look for in Term Life Insurance
- Types of Term Life Insurance
- Best Term Life Insurance Companies
- Other Insurance Companies to Consider
- Average Term Life Rates
- Term Life FAQs
Who Should Get Term Life Insurance?
Term life insurance can create peace of mind for anyone who chooses to buy a policy, especially for those described below:
The main (or only) breadwinner
A term life policy can serve as an income replacement for those who depend on you.
The stay-at-home parent
In your absence, someone would have to pay for childcare, a house cleaner, or other services. A life insurance policy could keep the house running smoothly.
Married without children
Life insurance could help your spouse in the event of your death. It can also ease their financial stress by covering the price of your final arrangements.
Those with a mortgage
Can your family continue to pay the mortgage, or will they be forced to move and start over? Carrying a term life policy at least until the mortgage is paid off can give them a little financial security.
Read on to learn how to evaluate term life policies.
Term life insurance covers you for a set period while whole life offers coverage for your entire life. Whole life insurance premiums are often higher, but your policy has long-term cash value.
A portion of the premium you pay to the insurance company is invested on your behalf. Some companies even let you borrow against the cash value.
Types of Term Life Insurance
If you've settled on a term life policy, there are several types of term life insurance that are worth looking into.
The main differences between these term life policies involve the eligibility for renewal, fluctuation in death benefits and premiums, and the requirement of medical exams.
- Level Term: This type of term policy guarantees fixed monthly premiums over the life of the policy, making it one of the most popular term life options.
- Decreasing Term: Your death benefit gradually decreases over the life of the policy. This can be a good choice if your financial obligations will decrease over time, as well.
- Renewable Term: This allows you to renew without additional underwriting. Renewable policies come with higher rates and usually renew for a specific term, such as 5 years.
- Annual Renewable Term: An annual renewable term (ART) lasts for only a year and renews annually at a higher rate. This can be a good choice if you're not sure how long you'll need coverage and don't mind spending a bit more money.
- Return of Premium: A return of premium (ROP) policy refunds 100% of the premiums you paid, tax-free, if you outlive the duration of your term. It can also be a rider for a standard term policy.
- Simplified Issue: This type of policy doesn't require a medical exam, so it's easier to get, but more expensive. Consider simplified issue if you think you won't pass the exam or qualify for a low premium.
- Convertible Term: This policy can be converted to a whole life insurance policy without additional medical information. It can be a good choice if you experience changes in health or start a risky hobby.
What to Look for in Term Life Insurance
Not all term life policies and insurers are created equal. Knowing what to look for can save you money, stress, and hours of research.
- Financial Rating
An insurance policy is only as good as the company that provides it. Consider an insurer with a rating of "A" or better from A.M. Best, an organization that rates the overall financial strength and claims payment history of insurers.For a deeper look at the financial health and credit rating of a company, be sure to check out their scores from Standard & Poors and Fitch Ratings, two of the most prominent credit rating agencies nationwide. - Variety of Options & Products
Make sure the insurance company offers a number of term life policies, or at least a good selection of riders. Also, look into any extra features they may offer.For example, do you want to have the option to convert your coverage to a whole life policy upon expiration? You'll need a company that offers that option.
- Understandable Policy Terms
Don't take out a life insurance policy that you don't understand. If your family ends up needing to file a claim, they could be blindsided by unforeseen restrictions.Ask your agent lots of questions BEFORE you buy. When the policy is delivered, read it carefully.
- Good Customer Service
Ratings from J.D. Power and the National Association of Insurance Commissioners (NAIC) will give you the best idea of what a company's customer service experience will be like. Ideally, you want a company that you can call anytime with questions.Also, look into their available resources, such as online chat, the claims process, and turnaround times.
Term and whole life insurance differ mainly in coverage length, cost, and whether they feature a savings component. While a term life policy only lasts the length of the term, whole life insurance covers you for the rest of your life.
Because of the extended coverage time and savings component, whole life insurance policies usually cost a fair amount more than a term life policy.
Best Term Life Insurance
 |
| © CreditDonkey |
The best term life companies provide affordable coverage with great customer service, understandable policy terms, and a variety of options.
Keep reading to review recommendations.
Best Term Life Insurance for Seniors
State Farm
Insurance companies base their premiums on the risk of having to pay out a claim. As you get older, your risk of serious illness and death increases, which means the premiums will rise.
Unlike some insurers, State Farm offers term life insurance to seniors. Their Select Term policy is a great option:
- Those between 45 and 65 can opt for terms of 10 or 20 years.
- Those over 75 must choose the 10-year option.
The premium is fixed for the term of the policy. What we love, though, is the ability to renew the premium annually up until the age of 95.
Of course, your premiums will increase accordingly. But if you have debts to cover in the event of your death, this may be a good option.
- A.M. Best: A++
- J.D. Power: 838
- NAIC Complaint Rating: Fewer complaints than expected
Best Term Life Insurance for Young Adults
AIG
The younger you are, the less expensive life insurance premiums may be. AIG offers plenty of life insurance options for young adults.
Current clients claim that AIG made the application process simple and affordable.
As soon as you can afford it. 25-year-olds are the prime candidates for life insurance. But many hold off until they are 35 or older when they feel more well-established. When you own a home, get married, or have children, it's time to protect yourself and your loved ones. If you have private student loan debt, life insurance can protect your co-signor if you die. (Federal student loans are forgiven when the student dies.)
AIG offers term life policies for terms between 10 and 30 years, in increments of 5 years.
The most popular plan is the Level Term Insurance for young adults. This offers the most affordable premium that remains "level" for the term.
AIG does offer renewable and convertible policies as well, which may help you in the future as your needs change.
- A.M. Best: A
- J.D. Power: 742
- NAIC Complaint Rating: More complaints than expected
Best Term Life Insurance for the Health Conscious
 |
| © CreditDonkey |
Health I.Q.
Founded in 2014, this company help health-conscious individuals find affordable life insurance through leading providers. Health I.Q. offers special discounts and better underwriting for those who meet certain fitness criteria.
Its quotes come from some of the highest-rated insurance carriers. Health I.Q. looks at customers' medical information to ensure they fit in a "preferred" category. This helps qualified candidates save money on their premiums.
- A.M. Best: A++
- J.D. Power: N/A
- NAIC Complaint Rating: N/A
With $15 billion in coverage issued, they are currently one of the fastest-growing companies in the industry and are rated A+ by the Better Business Bureau.
Best Term Life Insurance for Smokers
Legal & General
Smokers often pay as much as three times the rate of non-smokers. Legal & General is among the few companies that cater to customers who smoke by offering affordable insurance rates.
While they do require an exam to get their life insurance, they may not decline you or charge you more money just because you smoke.
They offer several different insurance products, including renewable and convertible policies.
- A.M. Best: AA-
- J.D. Power: N/A
- NAIC Complaint Rating: N/A
Unlike most insurers, L&G also offers coverage for seniors up to age 95. With their OpTerm policy, you are guaranteed level premiums up to that age.
Best Term Life Insurance with No Medical Exam Required
Haven Life
Some people worry about taking a medical exam for life insurance approval. Companies require the exam to determine your "risk of dying," which will affect your premium.
Thanks to today's technology, Haven Life is able to provide no-medical-exam insurance at an affordable price for those up to 45 years old who are in good health.
Apply online and the InstantTerm process verifies your application from various third parties. You'll get an immediate answer regarding your coverage and you won't have to pay any sky-high premiums.
- A.M. Best: A++
- J.D. Power: 769
- NAIC Complaint Rating: Much fewer complaints than expected
Guaranteed life insurance usually costs more and is limited to a smaller coverage amount, such as $50,000.
Best Term Life Insurance for Those Over 50
Transamerica
If you waited to get life insurance and now have debts to cover or loved ones to protect, it's not too late. Transamerica offers affordable policies for those over 50 years old with many benefits.
The company offers a life insurance policy with accelerated death benefits. Should you become chronically ill, you can use some of your benefits to pay for care while you are still alive.
Transamerica offers policies in terms between 10 - 20 years in 5-year increments (they offer 25- and 30-year terms for younger adults too). The coverage ranges from $25,000 and $1 million.
You can also choose how your family receives the payout, either as a lump sum or in installment payments.
- A.M. Best: A+
- J.D. Power: 734
- NAIC Complaint Rating: More complaints than expected
Other Insurance Companies to Consider
Met Life
One of the oldest names in the industry, Met Life offers multiple term life products, including a Simplified Life policy that doesn't require a medical exam.
MetLife is also known for its relaxed underwriting guidelines, especially for those with diabetes or high blood pressure.
- A.M. Best: A+
- J.D. Power: 773
- NAIC Complaint Rating: Number of complaints are as expected
Securian Financial
Most term life insurance policies range from 10-30 years. With Securian Financial, you can purchase a 5-year policy in addition to more common term lengths including whole and universal options.
This may be useful if you have short-term, temporary financial goals like starting a business, paying for college or getting your retirement plan in place.
- A.M. Best: A+
- J.D. Power: 741
- NAIC Complaint Rating: Fewer complaints than expected
USAA
USAA offers term life products for military service members. It includes exclusive benefits like accelerated approval before you deploy, coverage during war, and military severe injury coverage.
You can also get guaranteed additional coverage when you leave the military, including $100,000 of term insurance when you marry, buy a home or have a baby if you're aged 18-35.
- A.M. Best: A++
- J.D. Power: 904
- NAIC Complaint Rating: Number of complaints are as expected
Northwestern Mutual
This life insurance company tends to offer lower rates to seniors and smokers. You'll also have the ability to convert your policy under certain circumstances. But Northwestern Mutual doesn't have a "no medical exam" policy.
- A.M. Best: A++
- J.D. Power: 790
- NAIC Complaint Rating: Fewer complaints than expected
New York Life
New York Life specializes in whole and permanent life insurance policies, but they offer term insurance for up to 20 years. The company also has a Family Protection Term, which includes policies for your children under 18.
- A.M. Best: A++
- J.D. Power: 784
- NAIC Complaint Rating: Much fewer complaints than expected
Primerica
Primerica's Increasing Benefit rider is somewhat rare in the life insurance industry: your death benefit can increase up to 10% yearly, for 10 years.
- A.M. Best: A+
- J.D. Power: 732
- NAIC Complaint Rating: Fewer complaints than expected
Globe Life
Globe Life pricing is based solely on age, making it a good choice for younger people with medical issues. However, rates are only locked for 5 years at a time.
- A.M. Best: A+
- J.D. Power: 810
- NAIC Complaint Rating: Much more complaints than expected
Colonial Penn
Colonial Penn offers a new "Living Insurance" option which allows for early payout in the event of heart attack, stroke, cancer or other chronic illnesses. They also offer a guaranteed acceptance policy.
- A.M. Best: A-
- J.D. Power: N/A
- NAIC Complaint Rating: Much more complaints than expected
Costco (Protective Life)
Protective Life offers an Income Provider rider in which the death benefit is doled out over a period of years instead of as a lump sum, resulting in lower rates for the policyholder.
- A.M. Best: A+
- J.D. Power: 754
- NAIC Complaint Rating: Fewer complaints than expected
TruStage
TruStage, underwritten by CMFG Life, is the life insurance provider for Credit Union National Security. They offer several different policies and highly-rated customer service. No exam is required for a term life policy.
- A.M. Best: A
- J.D. Power: N/A
- NAIC Complaint Rating: N/A
Average Term Life Rates
To give you an idea of what you might be paying for a term life policy, we've gathered average rates for a 30-year term.
30-Year Term Rates - Male
| Age | $100,000 | $250,000 | $500,000 | $1,000,000 |
|---|---|---|---|---|
| 20 | $12.96 | $20.53 | $33.06 | $55.00 |
| 30 | $13.31 | $21.62 | $34.28 | $61.77 |
| 40 | $20.52 | $31.18 | $55.26 | $103.53 |
| 50 | $39.78 | $74.94 | $138.99 | $258.39 |
| 60 | $251.83 | $213.67 | N/A | N/A |
30-Year Term Rates - Female
| Age | $100,000 | $250,000 | $500,000 | $1,000,000 |
|---|---|---|---|---|
| 20 | $11.92 | $18.49 | $26.97 | $46.72 |
| 30 | $12.88 | $19.45 | $28.62 | $51.03 |
| 40 | $18.15 | $27.61 | $45.51 | $83.09 |
| 50 | $31.94 | $59.64 | $102.66 | $194.95 |
| 60 | $251.83 | $90.50 | N/A | N/A |
Rates are based on healthy, non-smoking men and women.
A good price for term life insurance depends on many factors, including age, gender, habits, medical information and physical fitness. If you are a female, 50-year-old smoker, your best rates will be higher than a 25-year-old non-smoking female. On a $1 million policy, a 30-year-old woman will pay an average of $49 per month. A 30-year-old male pays an average of $60 per month.
Frequently Asked Questions
How and where do I purchase life insurance?
You have two main options:
- Work with an agent: If you're undecided on life insurance companies, an independent agent can help you explore a wide variety of coverage options from different insurers. The other type, captive agents, work for one insurance company and can only sell that company's policies.
- Purchase a policy online: Many insurers let you pick your coverage amount and get a policy quote online. However, you may need to speak to a company agent to finalize the purchase.
How do I determine the right term policy length?
First consider your current and future financial obligations, including funeral costs, mortgages, student loans, and medical bills.
Then, think about your family: do you have kids, and how old are they? Will you need to provide for dependents for a longer period of time?
Based on this information, you can choose from the following common term options:
- 10- or 15-Year Policy: good for tight budgets, those with older children or most of their debts paid off.
- 20- or 25-Year Term Policy: good if you have young children, want to cover the price of college, or are paying off a mortgage.
- 30-Year Policy: good if you just got married, are expecting your first baby, or have a special needs child who needs long-term coverage.
How much life insurance coverage do I need?
Similar to the above process, first consider any current and future financial obligations and debts you have. Then determine the replacement cost of "services" you provide for your family, like childcare, cooking meals, or transportation.
Add these expenses up, minus your current savings and current policies through your employer. This should give you a general idea of how much coverage you need.
Another approach is to consider how many years you need coverage and multiply your annual income by that number of years.
Bottom Line
Chances are, you need some type of life insurance. But your needs will change depending on the circumstances in your lifetime.
If you're just starting your search, an independent agent can sell policies from multiple companies and help you determine which term life policy is best for you.
If you feel that an agent is misrepresenting the facts or is impatient with your questions, find someone else to handle your business. A good customer service experience is essential for any life insurance company.
Write to Kim P at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.
Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.
Read Next:
