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. Individuals often take out term life insurance policies to cover a period of time in which they have certain financial obligations, such as when their children are school-age or when their mortgage is in effect.
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 an objective analysis of each company’s policy options and third-party rankings, Bankrate’s insurance editorial team determined Northwestern Mutual, State Farm, Mutual of Omaha, Principal Financial and Guardian 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. We chose the following companies based on their third-party financial strength and customer satisfaction scores, as well as the policy options and coverage capacities (the maximum dollar amount a policy can be) offered. It may be helpful to start your research with the following providers:
|Company||Best for||2021 J.D. Power rank||AM Best||S&P|
|Guardian||No-exam term life insurance policies||775/1,000||A++ (Superior)||AA+|
|Mutual of Omaha||Policy customization through riders||795/1,000||A+ (Superior)||AA-|
|Northwestern Mutual||Life insurance information and digital tools on its website||807/1,000||A++ (Superior)||AA+|
|Principal Financial||Flexibility of converting your term life insurance policy to whole life||776/1,000||A+ (Superior)||AA-|
|State Farm||Highest customer satisfaction rating||822/1,000||A (Excellent)||AA|
The ratings provided by AM Best and Standard & Poor’s (S&P) grade each carrier’s financial strength. These ratings allow customers to see each company’s historic ability to pay out claims. The J.D. Power scores reflect customer satisfaction based on policyholder feedback to help you see which companies are most popular with their policyholders.
Why we chose it: Guardian life insurance offers a term life insurance option that does not require a medical exam.
The term life insurance policy offered by Guardian does not require a medical exam, so it may be an option worth considering for policy seekers who are dealing with health issues. In addition to this no-exam policy, the company offers seven term life insurance riders, which is more than most of its competitors. If you’re looking for flexible policy options or a no-exam term policy, you may consider researching Guardian. However, be aware that the company does not offer a network of local agents before purchasing a life insurance policy from Guardian.
Learn more: Guardian Insurance review
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. This company also offers a locator service to help you find a financial advisor near you. However, the company’s mobile app is rated 4 out of 5 stars, whereas many competitor apps are rated higher than the one from Mutual of Omaha.
Learn more: Mutual of Omaha Insurance review
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. However, the company only offers one term life insurance rider, so if you want greater flexibility, it may be worth considering one of Northwestern Mutual’s competitors.
Learn more: Northwestern Mutual Insurance review
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. The company does not offer whole life insurance.
Learn more: Principal Financial Insurance review
Why we chose it: State Farm has the highest J.D. Power score for customer satisfaction on our list.
In addition to a high J.D. Power score, State Farm won the award for best term life insurance provider in the 2022 Life Insurance Bankrate Awards thanks to its superior AM Best score and near-nationwide availability. State Farm, the seventh-largest U.S. life insurer, offers several term insurance products, but its return-of-premium policy option may be particularly helpful for certain term life insurance policyholders. This option lets policyholders choose between a 20- or 30-year payment term and receive a portion of their premiums back if they outlive the term. The return-of-premium policy can be renewed annually until age 95. While the return-of-premium option comes at an additional cost, it also builds cash value.
Because State Farm offers a full array of insurance products, including auto and home, its customers may also have the opportunity to earn discounts on their auto or home policies by bundling life insurance with another policy. However, State Farm only offers three term life insurance riders, which is less than many of the company’s competitors.
Learn more: State Farm 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:
- 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.
- 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.
- Your personal 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?
Life insurance can be a weighty investment, so you may want to give yourself ample time to consider your options and discuss them with friends and family. Many insurers’ websites include information about ways to contact an agent to discuss your needs in more detail.