Term life insurance is the most straightforward and basic form of life insurance. You pay a monthly premium, and your insurer pays out a death benefit if you pass away while the policy is in force. If you outlive the policy, the contract ends without payout. For more flexibility, policyholders can discuss their life insurance options, such as guaranteed renewable, with their insurance providers

Of course, this is life insurance, so is it ever that simple? With Insurify, you can effortlessly compare life insurance quotes and find the best term life insurance companies that cover your needs and accommodate your budget. Using Insurify to explore your life insurance options makes an arduous task simple and effective.  

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The Essentials of Term Life Insurance

Term life insurance policies are less complicated and more affordable than permanent life insurance policies, which grow cash value and come in an array of more intricate forms, such as universal life, where cash value can be used to pay premiums. Also, the maximum term length is typically a 30-year term, whereas whole life is for life.

Though term life insurance policies are less far-reaching than permanent coverage, you can choose add-ons (or “riders”) and features to increase your life insurance coverage options. You can also customize term life insurance policies to only cover large financial obligations or provide an amount of coverage to create an estate.

Term life insurance policies have more to offer than just final expense coverage. If you would like a more comprehensive plan but not whole life policy prices, discuss features such as guaranteed renewable and convertible with your insurance provider. These features allow you to renew your term life policy at its expiration or convert it to a whole life policy at times specified in your contract. 

Another way to extend your term life policy coverage is through add-ons or riders. An accelerated death benefit rider expands your coverage to include long-term care. It is offered as a rider or a part of the policy itself. Accelerated benefits allow for a portion or all of the policy to be paid out if you develop a terminal illness that requires long-term care.

Since term life insurance will only payout if you pass away while the contract is in force, a return of premium rider is a staple in term life insurance policies. For an additional cost, this rider will return the premiums you’ve paid during the life of the policy when it expires. You can also choose a waiver of premium rider, which allows you to postpone premium payments to the age of 65 or 70 if you become disabled.

To ensure your loved ones will be able to cover the mortgage or car payments should you pass away before the balance is paid off, choose a decreasing term policy, where premiums lower alongside the debt. There is also an increasing term policy, which extends coverage to cover the rising cost of living. This methodology allows for greater flexibility to term life insurance coverage while remaining more affordable than most whole life insurance policies.

What Makes a Good Life Insurance Company?

Regardless of the type of policy, all types of life insurance are designed to give you peace of mind. Because of this, there are private companies like A.M. Best, which rates insurers’ financial strength, and J.D. Power, which researches customer satisfaction, to aid with the concerns of life insurance consumers.

For insurance companies to make good on claims, they have to have the financial stability to back up their policies. Independent rating services identify insurers by their financial strength and claims-paying ability. Among the most well-known rating services are:

  • A.M. Best
  • Standard & Poor’s
  • Moody’s
  • Duff & Phelps

Financial strength rating services use various factors when rating insurers. These factors include:

  • Liquidity, or cash on hand
  • Capital, assets over liabilities
  • Competitive advantages 
  • Ability to raise capital to finance claims

Though rating services use different letters to distinguish rates, a basic rating system looks like this:

Financial Strength Ratings 

A+ Superior: the highest claims-paying rating and will likely remain that way for some time
A and A- Excellent: very strong ability to honor insurance contracts
B+ Very good: adequate ability to meet contract obligations, may exhibit less stability in changing economic conditions than higher-rated companies
B and B- Good: speculative under stressful conditions.
C Fair
C and C- Marginal: vulnerable to liquidation under stress and may be under regulatory supervision.
D Liquidation

J.D. Power analyzes life and auto insurance customer experiences. They take customer feedback on life insurance products and relay it via reports and ratings. This information is available in its U.S. Life Insurance Study. It’s difficult to consider the best life insurance companies without good customer service experiences. Poor communication and customer service can absolutely be deal-breakers.

What Is a Bad Life Insurance Company?

Life insurance has never been the most trusted industry. That said, life insurance is regulated by individual states. Insurance regulatory laws set rules and regulations governing insurance. Regulations include:

  • Unfair and prohibited practices
  • False advertising
  • Defamation of insurers 
  • Unfair discrimination
  • Rebating
  • Unfair claim settlement practices

Furthermore, federal regulations include the Fair Credit Reporting Act, and regulatory associations, such as the National Association of Insurance Commissioners (NAIC), help create best practices and regulations.

Unfair and Prohibited Practices

State regulations of unfair and prohibited practices include misrepresentation. Misrepresenting terms and benefits of policies, making false statements about the financial condition of the insurer, and producing incomplete comparisons of policies all result in a civil penalty equal to the compensation collected when selling the policy.

False Advertising and Defamation of Insurers

Insurers cannot publicize a statement or illustration that indicates the company can sell a type of insurance it legally cannot. Insurers also can’t circulate false or derogatory statements about the financial condition of another insurance company.

Unfair Discrimination

Unfair discrimination occurs when people of the same underwriting classification and equal risk are given different pricing. Also, when life insurance companies deny consumers the application process, refuse to issue a renewal, or pay lower commissions to agents based on:

  • Race
  • Color
  • Creed
  • National origin
  • Disability
  • Sex
  • Marital status
  • Past treatment for mental illness

Rebating

Rebating is when a life insurer or insurance agent pays anything of value to a life insurance consumer that is not specified in the contract. Agents and insurers can give merchandise of up to $15, and it must be placed in the advertisement. The fine for rebating is $500.

Unfair Claims Settlement Practices

The NAIC created the model for the Unfair Claims Settlement Practices Act. The act has been implemented by most states. It legislates practices that are considered unfair and permits the state commissioner to hold investigations when necessary.

Unfair claims settlement practices include misrepresenting facts or provisions related to coverage, failing to make an effort to settle claims promptly and fairly, failing to inform claimants whether their claim was accepted within 30 days, and not giving a reasonable explanation of why a claim was denied.

Who Has the Best Term Life Insurance Policy?

When it comes to which life insurance company has the best term life insurance policies, there are many factors to consider. For many, life insurance rates are top priority, and though rates may differ, life insurance premiums are determined in the respective company’s underwriting process. Other considerations are company offers and policy features. Let’s examine life insurance companies and their term policies.

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Prudential

Prudential offers competitive rates on its term life policies, features convertibility, and offers riders at an additional cost. Its riders include living needs benefits, waiver of premium, accidental death and dismemberment, children’s protection, and more.

Northwestern Mutual

At Northwestern Mutual you have the option of choosing between level premiums, increasing term policies, or decreasing term policies. You can choose to pay less in the younger stages of life and then pay more as you feel financially more secure. Also, you can cover important expenses like your mortgage with a decreasing term policy. Northwestern Mutual has superior ratings with four prominent rating services.

Mutual of Omaha

Mutual of Omaha life insurance company offers affordable term life insurance policies, with level premiums and a fixed death benefit of $100,000 or more. You can purchase a policy from Mutual of Omaha between the ages of 18 and 80.

State Farm

State Farm offers several options in term life insurance. Its Select Term policy offers term lengths of 10, 20, or 30 years. For an increase in premium, you can renew the policy at the end of the term length, until the age of 95. It also offers return of premium insurance and instant answer term insurance, which lasts to the age of 50 or a maximum of 10 years, whichever is greater.

Mass Mutual

Mass Mutual term insurance policies are affordable and convertible. Beneficiaries receive a lump-sum benefit. Its policies are usually between 20 and 30 years; after that, premiums increase considerably. 

Nationwide

Nationwide offers term life insurance policies in 10- to 30-year terms. Premiums remain level during the term length, and policies can be renewed until the age of 95. Its term policies can be converted into permanent policies until the age of 65. The riders they offer are waiver of premium, accelerated death benefit, and children’s term rider.

New York Life

New York Life has flexible premium options to suit your needs. You can choose from a yearly convertible policy, where the premium will increase every year and can be converted quickly. Or you can choose a level premium convertible policy, where the monthly premium is set for the term length of 10 to 20 years and increases upon renewal. Its riders include living benefits and waiver of premium.

Guardian

Guardian offers term life policies from 10- to 30-year terms. It also offers:

  • Level premiums
  • High benefit levels
  • Convertible term life 
  • No medical exam
  • Riders like “waiver of premium” 

You may also choose to donate one percent of your death benefit to the charity of your choice at no extra cost. Guardian rates high in customer satisfaction and financial strength.

John Hancock

John Hancock‘s term life insurance policies come in term lengths of 10, 15, or 20 years. It has high benefit levels of up to $65 million and a variety of policy types to cover short-term debt or provide final expenses. John Hancock‘s Vitality program offers its policyholders rewards for making healthy choices.

Pacific Life

Pacific Life‘s term insurance policies offer level premiums in increments of five years, from 10 to 30 years, and smooth underwriting for older individuals. And its policies are convertible. Pacific Life has superior ratings with A.M. Best, Fitch, and S&P.

Transamerica

Transamerica has term life policies with term lengths from 10 to 30 years. Its benefit levels range from $25,000 to $10 million. If you are under a certain age, no medical exam is required. Its Trendsetter Super policy is convertible without an additional medical exam, and its Trendsetter LB policy provides living benefits.

Haven Life

Haven Life insurance is available for purchase online and is backed by Mass Mutual. It has high benefit levels from $100,000 to $3 million. Policyholders can manage their accounts online, and applicants must be between the ages of 18 and 65. Its features include level premiums, accelerated death benefit, and a free look period.

AIG

AIG offers a large variety of term lengths, from ten to thirty five years. Features include fixed premiums and a fixed death benefit, renewability and convertibility, and living benefits. Their living benefits can come two different ways for chronic, and terminal illness, or terminal illness only.  

By using Insurify to compare life insurance quotes from leading life insurance companies, you can save time and money. Choose the right company and policy in just a few minutes, and tailor it with the riders and features that fit your needs and your future needs.

FAQ: Find The Best Life Insurance Company

What is the most reliable life insurance company?

There are many independent rating services that analyze life insurance companies’ financial strength, such as A.M. Best and Moody’s. The information these companies provide measures life insurance companies’ ability to pay on claims. J.D. Power also analyzes customer satisfaction with its U.S. Life Insurance Study.

What is a bad insurance company?

Life insurance companies and their agents are required to conduct business in an ethical manner. Life insurance is regulated by each state. Life insurance companies and their agents could face fines and penalties for violating state regulations.

When the term expires, will I receive any of the death benefits?

No, if your term life policy expires, you do not receive a death benefit. Life insurance companies offer features and riders to avoid having nothing at the end of the term, such as a return of premium rider or a renewable feature.

Final Thoughts

Term life insurance is one of the most coherent life insurance products on the market. Though they are clear-cut, they also allow you to expand your life insurance options with things like living benefits. To help discern which is the best candidate to meet your family’s needs in the event of a loss, examine the information with independent rating services and use Insurify to help you find the ideal premium.

When you use Insurify to compare quotes, you will quickly receive a list of the best insurance companies and their premium rates. Finding the right insurance company and policy to give you and your loved ones peace of mind can be extremely time-consuming. Insurify makes finding the right fit quick and uncomplicated.

Life Insurancen The Easy Way

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Updated January 30, 2021

Aissa Martell is a licensed insurance producer in the State of New York. She is a creative writer and has been freelance writing for five years. She’s happy to share her knowledge of the insurance industry and its products.