August 6, 2018

Best Term Life Insurance Companies

Read more about Life Insurance

Who will pay your mortgage or support your family in the event of your death? If you haven't considered this scenario yet, it's time. It doesn't matter if you are 25 or 75 years old, there are term life insurance policies out there for you.

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As the name suggests, you only get term life insurance coverage for a set time. After that, the policy expires and isn't worth anything unless it is convertible or renewable. While that sounds like a waste of money, it provides protection for your family should you die unexpectedly or prematurely.

Term life insurance may be the most affordable option for you, as the premiums remain the same for the entire term. This gives you no excuse to not protect your loved ones.

Keep reading to learn our choices for the best term life insurance companies available today.

Who Should Get Term Life Insurance?

Do you sit and wonder if you even need life insurance? Maybe you don't have children yet or you assume that your stay-at-home wife doesn't need coverage. You may want to reconsider, though.

Term life insurance can serve as an "income replacement" should you die during the term. If you are the breadwinner in your family, you may want to protect yourself. Who will pay the mortgage, cars, utilities, and the cost of daily living in your absence? Don't forget, your loved ones also have to cover the cost your final arrangements. A term policy can decrease your loved ones' financial stress during this difficult time.

Even though your stay-at-home wife doesn't make an income, she does have worth. Stop and think of what she does at home. She watches the children, cleans the house, makes the meals, and does administrative work around the home. In her absence, you might have to pay for childcare, a house cleaner, or many other services. A life insurance policy on her could help you afford those services and keep the house running smoothly.

If you don't have children, but you are married and your spouse depends on your income, life insurance could help him/her in the event of your death.

Another reason to consider term life insurance is if you have a mortgage or other large liabilities. Will your family have somewhere to live if you die without a policy? Can they 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.

What Is the Difference Between Term and Whole Life Insurance?
Unlike term life insurance, whole life provides coverage for your entire life, rather than a term. The premiums are often higher, but whole life has a cash value. The cash value is determined by the investments made. A portion of the premium you pay to the insurance company is invested on your behalf. The investments become cash value in the policy. Some life insurance companies allow you to borrow against the cash value. If you surrender the policy, you receive the net cash value. If you expect to surrender the policy, buying term insurance and investing the difference in premiums can be a better option. Each policy is different, so it's important to discuss the terms with your life insurance agent.

What to Look for in Term Life Insurance

Once you decide to look for term life insurance, you should know what to look for in a company. There are many options out there, but not all term life insurance policies are created equal. Knowing what to look for ahead of time can help you save money and headaches during your search.

  • The Financial Rating: An insurance policy is only as good as the company that provides it. Paying for a policy with a company that has no money won't help your loved ones if you die. Look for companies with good financial ratings, such as a BBB or better from A.M. Best.

  • A Variety of Options: You want an insurance company that offers many term life insurance options. Look at the various terms and riders that you have to choose from. For example, do you want to have the option to convert your policy to a whole life policy upon expiration? You'll need a company that offers that option.

  • Understandable Terms: Don't make the mistake of taking out a policy that you don't understand. This may end up in disaster if your family ends up having to use it. Make sure you can ask as many questions as you want. Ask your agent a lot of questions before you buy a policy. When the policy is delivered, read it. You have at least ten days to review the policy and get your money back if you decide you don't like the contract.

  • Good Customer Service: All of these factors can be wrapped up into one thing: good customer service. You want a company that you can call day or night with your questions. Read up on the reviews about a company's payout when someone has had to use their policy. Also, check to the available resources, such as online chat, the claims process, and turnaround times.

What Is a Good Price for Term Life Insurance?
A good price for term life insurance depends on your factors. For example, if you are a female, 50-year-old smoker, your "good" rates will be higher than a 25-year-old non-smoking female. For comparison's sake, on a $1 M policy, a 30-year-old woman pays an average of $49 per month and a 30-year-old male pays an average of $60 per month.

Best Term Life Insurance

The best term life insurance company is the one that provides the coverage you need at affordable prices while offering great customer service, understandable terms, and a variety of options.

Best Term Life Insurance for Seniors

State Farm:
The older you get, the more expensive term life insurance becomes. Insurance companies base their premiums on the risk of having to pay out on a claim. As you get older, the risk becomes greater, which means the premiums get higher. Some insurance companies don't even offer term life insurance to seniors. State Farm does, though.

State Farm has an A++ financial rating from A.M. Best. State Farm offers a Select Term policy, which is great for seniors. They offer a 10- or 20-year term depending on your age. If you are over 45 years old but less than 65 years old, you can opt for a 10- or 20-year term. Those over 75 years old may only 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 you want covered in the event of your death, this may be a good option.

State Farm also offers the option to convert your term life insurance to permanent coverage regardless of your state of health. Please note that certain restrictions may apply, depending on your state's laws.

Best Term Life Insurance for Young Adults

The younger you are, the less expensive life insurance premiums may be for you. Even if you think you don't have anything to insure, chances are that you do. Today, even young adults who aren't married but have shared liabilities are looking for life insurance. AIG offers plenty of options for young adults.

Current clients of AIG claim that AIG made the life insurance process simple and affordable. It's normal to feel overwhelmed as a young adult trying to make "adult decisions," but AIG helps make at least one decision easier for you. AM Best gave AIG a rating of BBB, which makes them a good risk for paying their obligations.

AIG offers term life insurance policies for terms between 10 and 30 years, in increments of 5 years. AIG offers a variety of insurance policies, giving you options. 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.

What's the Best Age to Get Life Insurance?
The best age to get life insurance is as soon as you can afford it. Twenty-five-year-olds are the prime candidates for life insurance, but many hold off until they are 35 years old and are more established. As soon as you own a home, are married, or have children, it's time to protect yourself and your loved ones. The younger you are when you buy life insurance, the lower your premiums may be. If you have private student loan debt, life insurance can protect your co-signor if you die. Federal student loans are forgiven if the student dies.

Best Term Life Insurance for Smokers

Smokers often have the misfortune of paying as much as three times the rate of a non-smoker. Banner is among the few insurance companies that cater to the "smoking niche," offering affordable insurance rates for them.

Banner received a rating of AA- from A.M. Best. While they do require a medical exam to get their life insurance, they may not decline you or charge you sky-high premiums just because you smoke. Banner also offers a variety of options, including renewable and convertible policies.

Read the Fine Print Before Converting
It's important to read the fine print regarding renewing or converting your policy, though. Some policies have a specific window of opportunity regarding when you can convert your policy.

Best Term Life Insurance with No Medical Exam Required

Haven Life:
Some people get stressed out at the thought of a medical exam for life insurance approval. Many life insurance companies require the medical exam to determine your "risk of dying" and therefore your premium. Thanks to today's technology, though, Haven Life has come up with a way to provide no medical exam insurance without the high premiums.

This insurance is only for people up to 45 years old who are in good health. You apply for the insurance just as you would normally, completing an online application. From there, the InstantTerm process verifies the information in your application from various third parties. You'll then have an immediate answer regarding your coverage and you won't have the sky-high premiums.

This is not traditional no medical exam insurance, though. People who have medical issues that would prevent them from getting insurance may have to opt for the Guaranteed Life Insurance. As this name suggests, you are guaranteed coverage, but it's likely limited to a smaller amount, such as $50,000, and comes with higher premiums.

Best Term Life Insurance for Those Over 50

If you thought you could do without life insurance once you got older, but now realize you have debts you should cover or loved ones to protect, it's not too late. Transamerica offers insurance policies for those over 50 years old that are affordable and offer many benefits.

Transamerica has an A.M. Best rating of A+ and offers a life insurance policy with accelerated death benefits. Should you become chronically ill, you can use some of your benefits to pay for your 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). They offer coverage that ranges between $25,000 and $1 million. You can also choose how your beneficiaries receive the payout, either as a lump sum or in installment payments.

Other Insurance Companies to Consider

  • Met Life: Met Life is one of the oldest names in the insurance industry. With an A+ rating, Met Life offers a variety of term life insurance options including a "Simplified Life" policy, which doesn't require a medical exam. Met Life is known for their relaxed underwriting guidelines, especially for those with diabetes or high blood pressure.

  • Northwestern Mutual: Northwestern Mutual tends to offer lower rates than other companies to seniors and smokers. They do offer the ability to convert your policy under certain circumstances. But they don't offer an option for a "no medical exam" policy.

  • New York Life: New York Life specializes in whole and permanent life insurance policies, but they do offer term life insurance too. If you are looking for a term no longer than 20 years, they may have a policy for you. New York Life also offers a Family Protection Term, which includes policies for your children under the age of 18.

Bottom Line

Chances are that you need some type of life insurance. Just what you need depends on your circumstances, and they can change throughout your lifetime. An agent who is independent can sell policies from more than one company, which can help you get the best policy for your situation. If you feel anything the agent said was misrepresented or the agent is impatient with your questions, speak with another agent.

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