Best term life insurance for 2022

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Term life insurance policies remain active for a set period of time, usually between 10 and 30 years, and are typically much cheaper than permanent life insurance policies. If you’re looking for the best term life insurance policy for your needs and your wallet, you may want to start by researching the companies we outline below. Through objective analysis, Bankrate’s insurance editorial team determined Northwestern Mutual, State Farm, Mutual of Omaha, Principal Financial and USAA to be among the best life insurance companies for term coverage.

Best term life insurance companies

The best term life insurance companies depend on an individual’s needs and preferences. Some carriers focus exclusively on members of the military community, while others focus on coverage for people with certain health conditions, such as diabetes or respiratory illnesses. Here we’ve chosen five of the most popular and well-established life insurance companies that offer term policies.

Company Best for… 2021 J.D. Power rank AM Best S&P
Mutual of Omaha Policy customization through riders 795 A+ AA-
Northwestern Mutual Life insurance information and digital tools on its website 807 A++ AA+
Principal Financial Flexibility of converting your term life insurance policy to whole life 776 A+ AA-
State Farm Highest customer satisfaction rating 822 A AA
USAA Coverage tailored to military families’ needs Not rated A++ AA+

The ratings provided by AM Best and Standard & Poor’s rate each carrier’s financial strength. The J.D. Power ranking is a score that rates the company’s customer service based on customer feedback.

Mutual of Omaha

Why we chose it: Mutual of Omaha’s wide array of riders helps policyholders to tailor their coverage to their needs.

Mutual of Omaha offers a plethora of additional riders that can be added to its term life policies. It should be noted that not every rider can be used with every type of policy. To verify how much coverage you need and which riders can be added to your policy, you may want to consider consulting with an agent.

Learn more: Mutual of Omaha Insurance review

Northwestern Mutual

Why we chose it: Northwestern Mutual offers a wide array of informational resources and policy management tools online.

Northwestern Mutual is the second-largest life insurer in the U.S. by direct premiums written, according to the Insurance Information Institute, and has been insuring consumers for more than 150 years. This is reflected in the company’s high J.D. Power customer satisfaction rankings and represents its deep understanding of families’ financial protection needs. Its term policies allow you to select your coverage period based on either a set amount of years or until a specific age, depending on which option is most suitable for you. These plans are all also convertible to whole life insurance should the need arise, meaning your policy can adjust as your needs evolve. Northwestern Mutual’s A++ (Superior) financial strength rating from AM Best is the highest level available.

Learn more: Northwestern Mutual Insurance review

Principal Financial

Why we chose it: This company allows policyholders to convert their term policy to whole life insurance at any point during their term, creating maximum flexibility for the policyholder.

Principal Financial, the 23rd-largest U.S. life insurer, offers term life insurance policies with an option of conversion at any time during the term to a whole life policy. Policyholders have the ability to choose term lengths that fit their current circumstances, whether they only need coverage for a single year or prefer longer 10-, 15-, 20- or 30-year periods. If you do decide to convert your policy, you may receive permanent coverage without the added need of proving your health. Principal Financial also offers a complete range of cash value policies, including whole life, universal life and variable universal life.

Learn more: Principal Financial Insurance review

State Farm

Why we chose it: State Farm has the highest J.D. Power score for customer satisfaction on our list.

State Farm, the seventh-largest U.S. life insurer, provides several products when it comes to term insurance, but its return-of-premium policy is a particularly nice offering. With it, policyholders can choose between a 20- or 30-year payment term and receive their premiums back if they outlive the term. If you decide you want longer coverage, the return-of-premium policy can be renewed annually until the age of 95, so it can cover most insureds for their entire lives. The return-of-premium option comes at an additional cost, but also builds cash value. Cash value is generally not included in term life insurance policies, but may be useful in emergencies where money needs to be borrowed against your account. Because State Farm offers a full array of insurance products, including auto and home, its customers may have the opportunity to earn premium discounts by bundling life insurance with another policy.

Learn more: State Farm Insurance review

USAA

Why we chose it: USAA caters its coverage options to military members and their families.

USAA is only available to military members, veterans and their immediate family, but provides life insurance policies worthy of consideration for those who qualify for coverage. Most standard life insurance policies do not pay a death benefit if the insured dies from an act of war. USAA is an exception to this practice, providing specific coverage to service members while they are deployed. This coverage can be purchased on top of the group term life insurance that all members of the military can get through the government. USAA’s policies can also pay out an additional $100,000 of benefits for service members up to age 35 who marry or have children. In fact, all of the service member’s children can be added to the policy for less than an additional $8 per month. Additionally, USAA is catering to consumers who like to shop for life insurance virtually and recently introduced a term product that is only available online and does not require a medical exam for coverage.

Learn more: USAA Insurance review

How to find the best term life insurance company for you

There are several factors to consider when shopping for a quality term life insurance policy. Since your life insurance will ultimately be responsible for providing the coverage you want for your family, these considerations may be beneficial to keep in mind when determining which provider is right for you. In addition to policy types, you could consider:

  • The financial strength: A life insurance company’s financial strength score reflects its past ability to pay out claims and could help you decide if a company is financially sound. Third-party agencies such as AM Best and S&P publish financial strength scores for each major provider.
  • Getting multiple quotes: Getting quotes for different types and levels of coverage can help you get an idea of how much you’ll pay for your life insurance. However, keep in mind that quotes for the same person and policy type likely won’t vary as much from company to company as auto insurance or home insurance quotes do.
  • Assessing your situation: Term life insurance remains active for only a set number of years. To decide whether term life insurance is right for you, it may be helpful to ask what you want coverage for. Do you simply want coverage while your children are young, or would you prefer lifelong coverage?

With life insurance being such an impactful investment for the care of your loved ones, consider giving yourself ample time to fully think your provider and policy options through. Many insurers’ websites include information about ways for you to contact an agent in order to discuss your needs in more detail.

Frequently asked questions

What is the difference between term and whole life insurance?

Term insurance is designed to provide pure death benefit protection for a specific period of time, such as 20 years. When the term expires, the coverage goes away. Whole life insurance is a form of permanent insurance, where cash value accumulates inside a tax-deferred savings component that is attached to the policy. Whole life insurance is designed to remain in place for the insured’s entire life as long as the premiums are paid.

What factors impact my life insurance premium?

Your age, weight, health conditions and occupation are just some of the underwriting rating factors that will determine how much you pay for term insurance. The amount of coverage that you want to purchase is another key factor in determining your cost. Insurers consider multiple aspects of your lifestyle to set premiums. For example, the use of tobacco usually leads to higher premiums as a reflection of associated health risks. In general, the younger and healthier you are, the lower the cost of the premiums will be.

Is term or whole life insurance better?

There is not a right or wrong answer to this question. Term insurance usually can provide a much larger death benefit than permanent policies at a much lower price. But if you know that you are going to need to have some life insurance at the end of your life, such as to pay for estate taxes, then permanent life insurance policies may be the better option for you. It all depends upon your financial situation and your objectives. Consult with your financial advisor or life insurance agent for more information on term vs. whole life and which is better for you.

Does having COVID-19 impact my ability to purchase term insurance?

The underwriting standard that most life insurers have engaged is if you are showing symptoms of COVID-19, or have recently tested positive for coronavirus, you will not be able to purchase life insurance coverage until after you recover and test negatively. If you previously had COVID and are completely recovered when applying for coverage, this should not be a barrier to obtaining a new term policy.

Written by
Mariah Posey
Insurance Editor
Mariah Posey is an auto and homeowners insurance writer and editor for Bankrate.com. She aims to make the insurance journey as convenient as possible by keeping the reader at the forefront of her mind in her work.
Edited by
Insurance Writer & Editor
Reviewed by
Director of corporate communications, Insurance Information Institute