Whole life insurance policies can be the ideal choice for conservative insureds who want to make sure that their life insurance policy is still in force when they die. They are a foundational component of the life insurance industry and have the added bonus of paying out a guaranteed death benefit as well as accumulating cash value at a guaranteed rate of interest.
Whole life insurance is a form of cash value (also known as permanent) life insurance that accumulates money in a savings account known as the cash value over time. This money can be withdrawn via a tax-free loan at any time for any reason without penalty. The policy also pays a tax-free death benefit to the beneficiary or beneficiaries upon the death of the insured. Whole life insurance forms the backbone of many consumers’ financial plans because of the stability and guarantees that come with it.
Best whole life insurance companies
The best whole life insurance companies for one person may not be the same companies for another person, as different companies cater best to different types of people. Some insurers target members of the military while others may target insureds with specific types of health conditions such as cancer or heart disease. But here is a list of five of the best life insurance companies overall according to industry rankings.
|Company Name||J.D. Power||AM Best||BBB|
|MetLife, Inc.||773 out of 1,000||A+||A-|
|New York Life||784 out of 1,000||A++||A+|
|Northwestern Mutual||790 out of 1,000||A++||A+|
|State Farm||838 out of 1,000||A++||A|
|Guardian||743 out of 1,000||A++||A+|
MetLife, Inc. is the single largest provider of life insurance in the entire industry. It owns an incredible 13% of the overall market share in the business today. What makes this even more remarkable is the fact that MetLife doesn’t even directly offer individual policies to consumers. It markets its life products exclusively through employers.
MetLife customers have given high praise to its phone app, which can be used to submit claims, review policies and make premium payments. If you want to buy a policy from MetLife outside of your employer, you’ll have to go through Brighthouse Financial, a spinoff company from MetLife that was introduced in 2017. Brighthouse is known for its indexed universal life insurance policies that also offer long-term care benefits.
New York Life
Unlike many of its competitors, New York Life is completely owned by its policyholders. It offers a complete range of life insurance products, including whole life, term and convertible term policies. New York Life owns approximately 5% of the overall market share in the life insurance industry, which makes it the 4th largest provider of life insurance in the U.S.
One popular option that the company offers is the ability to pay policy premiums early (such as while policyholders are still working) so that they will not be billed in later years (such as after they retire).
Like New York Life, Northwestern Mutual is owned exclusively by its policyholders and offers a wide range of whole life, term and universal life policies. Fortune magazine also ranked Northwestern Mutual number one for the quality of its products and services as well as its social responsibility. The company stands as one of the financially strongest companies in the life insurance industry.
Although it is often primarily known for its property-casualty insurance offerings, State Farm is also a leader in life insurance. It offers an abundance of life insurance products including term, whole life and universal life. All of its life products can be customized for each customer to fit their needs and budget. Its life insurance products are available in every state in the U.S., except for Rhode Island and Massachusetts. Its financial strength is also one of the highest in the industry.
Guardian offers a complete range of life insurance products, including whole life, term and universal coverage. They are also known for delivering unparalleled customer service to their current and prospective policyholders. Guardian also maintains a robust website that can give shoppers instant quotes and allow policyholders to manage their coverage online.
How to find the best whole life insurance company for you
There are several things that you should look for when you shop for a whole life insurance policy. One of them is financial strength. What do the financial ratings agencies such as Moody’s, Fitch’s, A.M. Best and Standard & Poor’s say about their asset base? You can also go to the state insurance commissioner’s website for your state and find out how many complaints the company has received during the past year or two. Finally, you need to look at affordability. The difference in price between one carrier and another may surprise you in many cases, as different carriers are geared to provide competitive coverage for different categories of insureds.
Frequently asked questions
What’s the difference between term and whole life?
Term insurance only provides death benefit coverage, while whole life insurance also comes with a savings account component that accumulates cash value over time. The coverage from term life insurance will end when the term is up, while whole life provides coverage for life. But whole life insurance costs more than term insurance for this reason.
What factors impact my life insurance premium?
There are several factors that are used to determine how much you’ll pay for your life insurance coverage. Your age, health and the amount of coverage that you need are the primary determinants, but other factors such as where you live and your occupation may also be considered. The younger and healthier you are, the cheaper your insurance will be.