For many people, life insurance is a necessary part of their financial plan. It can protect your loved ones by replacing lost income or paying off debt if you pass away. It can also help you leave a financial legacy.
However, life insurance can be complicated. There are several different types and finding the right one for your needs is important: Term life insurance, in which coverage expires after a certain number of years, is popular with people looking to keep premiums down. Permanent insurance, like whole and universal life insurance policies, keeps coverage in place for as long as you live and can even build cash value.
To help you choose the best policy, CNBC Select compared dozens of life insurance companies and ranked them based on factors like customer satisfaction, financial stability, online usability and whether or not a medical exam was required. (Seeour methodologyfor more information on how we chose the best life insurance companies.)
Best life insurance companies
- Best from a big-name insurer: Northwestern Mutual
- Best for customer satisfaction: State Farm
- Best for seniors: Mutual of Omaha
- Best for term life insurance: Guardian
- Best for whole life insurance: MassMutual
- Best for universal life insurance: Pacific Life
Best from a big-name insurer
Northwestern Mutual Life Insurance
Cost
The best way to estimate your costs is to request a quote
App available
Yes
Policy highlights
As the largest life insurer by market share in the U.S., Northwestern Mutual is an established choice with a proven record. And, it offers a number of types of policies across the country.
Pros
- Variety of life insurance products available
- Highly rated for customer satisfaction
Cons
- Policies must be purchased through a financial professional
Founded in 1857, Northwestern Mutual is now the largest issuer of life insurance policies in the U.S., according to the National Association of Insurance Commissioner. It earned an A++from AM Best, a measure of its financial health and ability to pay out claims.
Best for customer satisfaction
State Farm Life Insurance
Cost
The best way to estimate your costs is to request a quote
App available
Yes
Policy highlights
State Farm offers a variety of term, whole, and universal life insurance products to choose from, alongside other types of insurance. It's rated highly for both financial stability and customer service.
Pros
- A++ AM Best financial strength rating
- Highest rated for customer satisfaction
- No medical exam option available
Cons
- Low coverage limit for no medical exam option
State Farm received an impressive score of 843 out of 1,000 on JD Power’s life insurance customer satisfaction survey, the highest of any company on this list. If you want a policy without a medical exam, however, State Farm only offers up to $50,000 worth of coverage for those up to age 50 or a 10-year term, whichever comes first.
Best for seniors
Mutual of Omaha Life Insurance
Cost
The best way to estimate your costs is to request a quote
App available
No
Policy highlights
Mutual of Omaha offers term, whole, indexed universal life and universal life policies, giving lots of options.
Pros
- Policies available up to age 85
- No medical exam options available
Cons
- Limited to $25,000 for Guaranteed whole life policies
Mutual of Omaha's relatively high age limits can help seniors overcome challenges with buying life insurance. Term life products are available up to age 80, while whole life products are available up to age 85. While Mutual of Omaha’s whole life policies are limited to $25,000 worth of coverage, they don’t require a medical exam.
Best for term life insurance
Guardian Life Insurance
Cost
The best way to estimate your costs is to request a quote
App available
Yes
Policy highlights
Guardian offers a variety of policies, including term, whole and universal. Guardian offers term policies that can be converted into whole or universal life policies.
Pros
- A++ AM Best financial strength rating
Cons
- Ranks slightly below other top picks for customer satisfaction
- Policies must be purchased through a financial professional
Guardian shines with a top-tier A++ rating for financial strength from AM Best and a website that provides estimates of how much a term life policy would cost. If your needs change, Guardian's level term insurance offers the option of conversion to a whole life policy in the first five years for free, a perk that generally costs extra as a rider on other policies.
Best for whole life insurance
MassMutual Life Insurance
Cost
The best way to estimate your costs is to request a quote
App available
Yes
Policy highlights
MassMutual has been in business for over 170 years, and carries the highest ratings for financial security from AM Best.
Pros
- Offers a number of policies to choose from
Cons
- No online quotes available
- Policies must be purchased through a financial professional
MassMutual offers a variety of competitively priced whole life policies that can be adjusted to your needs. It's also noted for its solid history of paying out dividends to policyholders — which it's done every year since 1869. MassMutual has set a 6.1% dividend interest rate for 2024, when it estimates it will issue $2.2 billion to customers, the largest payout in its history.
Best universal life insurance
Pacific Life Life Insurance
Cost
The best way to estimate your costs is to request a quote
App available
No
Policy highlights
Pacific Life offers permanent life insurance policies in addition to term insurance. A number of riders make it possible to customize the policy to fit your needs.
Pros
- Offers specialized products that tailor the coverage to your needs
Cons
- Must be purchased through an advisor
- No online quotes available
Pacific Life stands out for its affordable universal, indexed universal and variable universal life insurance policies. Individualized plans are available to help policyholders with specific concerns, like supplementing retirement income.
Compare life insurance companies
How does life insurance work?
Life insurance functions differently depending on what type of coverage you choose.
Generally, you first receive your life insurance quotes and then you apply for a policy. After applying, your information is sent through underwriting, a process that determines your life insurance rates, and the amount of coverage you're eligible for. This is also where you'll undergo a medical exam if required. From there, your application will be approved or denied.
For term life insurance, you'll make monthly payments for a set number of years. If you survive to the end of the term, there's no payout. If you die before the end of the term, your loved ones receive a payout from the policy.
With whole or permanent life insurance policies, such as universal life insurance, you'll pay into the account, and the coverage will follow you for your entire life. With whole life insurance, the premiums and death benefit are fixed from the beginning of the policy. With universal life insurance, the premium and death benefit can both change throughout the life of the policy. At the end of your life, as long as there's value in the policy, there will be a payout to your family and loved ones.
Different policy options, called riders, can be added to personalize your coverage. Things like accelerated death benefit riders or long-term care provisions can be added to your policy to make it a better fit for your needs.
Types of life insurance
Here's what you need to know about several common types of life insurance:
- Term insurance: This coverage generally has the cheapest premiums and offers coverage for a set number of years. After that term expires, there's no coverage or death benefit.
- Whole life insurance: Whole life insurance policies follow you for your whole life, building a cash value. The family or organizations you choose, also called beneficiaries, will receive money when you die.
- Indexed universal life insurance: Like whole life insurance, this policy also lasts a lifetime and builds cash value, earning value based on index funds.
- Guaranteed universal life insurance: Like term policies, this type of permanent life insurance generally has a very high age as an end date where the policy will remain active, usually between ages 90 and 100. But, this policy generally doesn't accumulate much cash value, if any.
- Variable universal life insurance: A type of life insurance where you control how the account is invested. This type of life insurance generally doesn't have a guaranteed death benefit.
If you're not sure which type of life insurance coverage is best for you, speaking with a financial advisor or insurance agent could help you decide.
FAQs
Do I need life insurance?
Life insurance is useful if you have expenses that won't be able to be met if you die. In many cases, this includes things like having dependents or partners that depend on your income, or things like debt, including student loans or a mortgage. Permanent life insurance is also useful for those who want to be able to leave a financial legacy for their children or families.
How much life insurance should a person have?
There's no set amount of life insurance that everyone needs. Rather, your insurance needs depend on your income amount, debt, and whether or not others depend on your income. A common rule of thumb is to have enough life insurance to cover 10 times your annual expenses.
How much does life insurance cost?
Life insurance costs vary largely based on your gender, age, health information and how much coverage you're buying. While small, guaranteed-issue policies might have lower premiums, a large whole life policy will have much higher premiums.
For term policies, which generally have the lowest premiums, the typical life insurance premium for a $500,000 term policy is about $26 per month for a 35-year-old female, and about $30 per month for a male of the same age according to Policygenius data.
For a whole life policy, premium payments are higher. Policygenius estimates that a 35-year-old male will pay about $571 per month to pay up their premiums by age 99.
What age is best to get life insurance?
Life insurance gets more expensive with age. Therefore, it will cost the least to get it while you’re young. Buying life insurance sooner rather than later could help you save in the long run.
What is final expense insurance?
Final expense insurance is one coverage option designed to help your family and loved ones payout to cover your expenses after you die, like funeral expenses or burial expenses. These policies are generally small whole life policies and may be guaranteed issue, or a no-exam policy.
Can I use life insurance coverage while I'm still alive?
Some life insurance policies allow for options that could be useful while you're alive. Some life insurance policies offer insurance riders which are add-ons to your coverage that could help cover the costs of things like long-term care or coverage to pay for terminal illnesses.
An accelerated death benefit is one of these provisions. This insurance rider could help while you're still alive if you're diagnosed with a chronic or terminal illness.
Additionally, some permanent coverage allows you to borrow against the cash value component built into the policy.
Is a life insurance policy through work enough?
Some employers offer life insurance as a benefit. However, many people who have dependents or loved ones who need their income need more coverage than the typical workplace policy offers. Getting an individual life insurance policy can help add to the amount of insurance coverage you have.
Bottom line
Life insurance is an important part of financial planning. To get life insurance, you’ll want to consider your unique needs and choose the right type of insurance. From there, choose a life insurance company that’s ranked highly for customer satisfaction and financial strength to ensure that your policy will work for you.
Subscribe to the CNBC Select Newsletter!
Money matters —so make the most of it. Get expert tips, strategies, news and everything else you need to maximize your money, right to your inbox.Sign up here.
Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every life insurance review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of life insurance products.While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
Read more
As of July 1, your medical debt may no longer hurt your credit score—here's why
Here are the best homeowners insurance companies to consider
The best car insurance companies based on cost, coverage and service
Best renters insurance companies to consider if you rent your home
Our methodology
To determine the best life insurance companies, CNBC Select collected data points on dozens of U.S. life insurance companies with a variety of policies.
When selecting the best life insurance companies, we focused on insurance companies that write individual policies. From there, we considered ratings from JD Power’s life insurance customer satisfaction ratings, AM Best financial strength ratings (which measure a company’s ability to pay on debts), and market share data from the National Association of Insurance Commissioners. We also considered the types of life insurance products offered, the number of riders available, the availability of online quotes, and medical exam requirements.
After considering the features listed above, we sorted recommendations by the best insurance companies for term life insurance, best for whole life insurance, best for universal life insurance, best for customer satisfaction, best life insurance for seniors, and the best life insurance company overall.
Catch up on CNBC Select's in-depth coverage ofcredit cards,bankingandmoney, and follow us onTikTok,Facebook,InstagramandTwitterto stay up to date.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
