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Best whole life insurance companies
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Whole life insurance may be appealing to you if you are looking for life-long coverage that also allows you to borrow against the policy's cash value. It’s a type of permanent insurance, meaning it remains in force for as long as you pay the premiums—thus giving you coverage for as long as you live rather than for a set number of years. Bankrate's insurance editorial team took a close look at everything you need to know about whole life insurance companies so you can purchase the policy that's right for you. Their recommendations may help you make the best decision for coverage for you and your family.
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Whole life insurance combines life insurance with an investment component.
- Coverage for life
- Tax-deferred savings benefit if premiums are paid
- 3 variations of permanent insurance: whole life, universal life and variable life include investment component
Term life insurance is precisely what the name implies: an insurance policy that is good for a specific term of time.
- Fixed premium over term
- No savings benefits
- Outliving policy or policy cancellation results in no money back
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This advertising widget is powered by HomeInsurance.com, a licensed insurance producer (NPN: 8781838) and a corporate affiliate of Bankrate. HomeInsurance.com LLC services are only available in states where it is licensed and insurance coverage through HomeInsurance.com may not be available in all states. All insurance products are governed by the terms in the applicable insurance policy, and all related decisions (such as approval for coverage, premiums, commissions and fees) and policy obligations are the sole responsibility of the underwriting insurer. The information on this site does not modify any insurance policy terms in any way.
What is whole life insurance?
Whole life insurance is a type of life insurance policy that provides coverage for the entirety of your life as long as you pay the premiums. This is different from term life insurance, which usually only lasts for a set period of time, usually between 10 and 30 years. Permanent policies pay out a death benefit to your beneficiaries after your death. Death benefits on whole life insurance policies vary greatly, from as little as $10,000 to over $1 million, depending on your needs and the amount you qualify for and choose.
Whole life insurance living benefits
In addition to a policy's death benefit, it is often possible, depending on your insurer, to add living benefits to your policy as riders. A living benefit rider is an optional added provision that gives your policy more functionality while you are still alive. Here are some of the most common living benefit riders available to policyholders:
- Accelerated death benefit: Also referred to as a terminal illness benefit, this popular rider allows you to use your death benefits if you are diagnosed with a terminal illness. This may allow you to pay for medical bills or handle other financial challenges. As is generally true for all living benefits, the amount you pull from your policy decreases the amount of the death benefit available to your beneficiaries.
- Chronic illness rider: This rider allows you to access your policy’s death benefits if you are diagnosed with a chronic illness, such as Alzheimer’s disease, that reduces your ability to function in daily life. You will need a doctor to certify that you are unable to complete at least a few of the activities of daily living (ADLs).
- Critical illness rider: Similar to a chronic illness rider, you may be able to access some or all of your death benefit if you have a critical illness. Common illnesses that insurers will consider include heart attacks, strokes and cancer. Your doctor will need to certify your medical condition.
- Long-term care rider: If you need home care or move to an assisted living facility, this rider allows you to use your policy's death benefit to pay for your care. It comes in two varieties: a reimbursement rider, which helps pay the cost of your long-term care expenses each month, or an indemnity rider, which offers a predetermined amount of money that is paid to you monthly, regardless of your long-term health care costs.
- Disability income rider: This rider may be useful if you become disabled and lose your ability to earn a living. The income from the rider may last for years or even longer, depending on the provisions of your policy.
- Waiver of premium rider: There are two types of waiver riders: a disability premium waiver and an unemployment premium waiver. With the disability rider, the insurer waives your need to pay your life insurance policy’s monthly premiums if you are disabled or lose your income due to illness or injury. With the unemployment rider, your premiums are waived if you involuntarily lose your job and have qualified for government unemployment benefits.
Whole life insurance cash value
Cash value is a feature found in permanent life insurance policies. Your premium payments are split by your insurer: some go toward paying for the policy's death benefit, but another portion is reserved in a cash value account that accrues interest over time.
Once your account has built up its cash value, you may be able to borrow against it with an interest-bearing loan. You are not required to pay back this loan while you’re alive, but if you don’t, the owed amount is ultimately first taken from the policy’s death benefit before the insurer makes a payment to your beneficiaries. This cash value makes whole life and other permanent forms of life insurance appealing to those who wish for financial benefits from their policy while they are still alive.
The cash value of your account will continue to build for as long as you pay your premiums, but this amount is not added to the death benefit that is available to your beneficiaries after your death. Instead, it reverts back to your insurer.
Whole life insurance dividends
For individuals who are looking at whole life insurance as part of a strategic financial plan, policies that pay dividends may be appealing. These are offered by many carriers but are not guaranteed. To put it simply, if the insurance company has a good year financially, they will share some of their surplus earnings with their policyholders.
Whole life insurance policies can be divided into two types: participating and non-participating. It is the participating policies that are eligible for dividends. These are often offered through mutual life insurance companies, such as MassMutual, which has consistently paid out dividends since the 1800s.
If you earn dividends, this money is not restricted, and its size is determined by how much the policy has contributed to the company's surplus. The dividend can be used to reduce your premium rate, add to the cash value or purchase additional life insurance. It can also be received as a check to be used however the policyholder would like.
Best whole life insurance companies
The best whole life insurance company for one person may not be the best insurer for another person because different companies cater best to different types of people and different needs. Some life insurers are focused on serving the military community, while others may specialize on serving insureds with specific types of health conditions, such as cancer or heart disease. Some companies may have a reputation for affordable coverage, while others cater to high-wealth individuals.
Depending on your specific situation, you may need to research additional companies to meet your life insurance objectives. However, based on Bankrate’s research, we have determined the following five companies are among the best in the industry for whole life insurance coverage.
These five major insurers were chosen through an objective analysis of the 2023 J.D. Power Life Insurance Study scores, AM Best and Standard & Poor’s (S&P) financial strength ratings, policy offerings, digital tools and customer service. J.D. Power scores reflect whether or not policyholders are generally satisfied, AM Best and S&P financial strength ratings show a company’s strong capital position and historical ability to pay out claims, and a wide range of policy options makes it easier to find the right policy for you with these providers.
| Company | J.D. Power score | AM Best |
|---|---|---|
| MassMutual | 798/1,000 | A (Excellent) |
| Nationwide | 840/1,000 | A+ (Superior) |
| New York Life | 794/1,000 | A++ (Superior) |
| Northwestern Mutual | 790/1,000 | A++ (Superior) |
| State Farm | 843/1,000 | A++ (Superior) |
MassMutual received a Bankrate Award for the third year in a row in 2024 for Best Whole Life Insurer, indicating the strength of the company's whole life offerings. It also offers term, universal life and variable universal life, as well as retirement and investment planning services. The company scores well above average for customer satisfaction with J.D. Power and NAIC, and has the highest possible rating for financial stability from AM Best.
As a mutual company, MassMutual offers dividends annually to its policyholders. Although these are not guaranteed, it has consistently paid them every year for more than a century. Its whole life policies have a generous handful of rider options, including a disability waiver of premium, guaranteed insurability rider and an additional life insurance rider that allows you to increase your premiums in order to add to your policy's death benefit and cash value.
If you prefer to have all of your insurance products with one company, Nationwide may be a good choice. Along with various life insurance products, Nationwide is a full-lines insurer that also offers home, auto, umbrella and pet insurance, among other products.
Nationwide offers clients two payment options when it comes to whole life insurance. Its Whole Life 100 policy offers level premiums, like all whole life insurance policies, but payments stop when you turn age 100. The 20-pay Whole Life option locks in your premium rate for 20 consecutive years, at which point the policy is considered paid in full and premiums are no longer assessed. While the 20-pay policy is more expensive, it may be a good choice for those who do not want to pay premiums for life. Nationwide's second-place score in the J.D. Power study indicates that life insurance customers are generally satisfied with the carrier's service.
New York Life is a mutual insurer completely owned by its policyholders. It offers a wide range of life insurance products, including whole life, term and universal and variable universal policies. New York Life accounts for nearly 7 percent of the overall market share in the life insurance industry, according to the National Association of Insurance Commissioners (NAIC).
New York Life offers policyholders the ability to customize their payment schedule with its Custom Whole Life Insurance option. This option may allow you to pay up your policy in a shorter period of time so that you have no premiums due later in life. The company ranks lower in J.D. Power customer satisfaction study compared to other whole life insurers on our list, but it still scored above average.
Like New York Life, Northwestern Mutual is owned exclusively by its policyholders and offers a wide range of whole, term and universal life policies. Northwestern Mutual is one of the largest direct writers of life insurance in the U.S. The company received an average customer service score from J.D. Power, and carries an A++ (Superior) financial strength rating from AM Best.
Northwestern Mutual offers an intuitive tool on its website that will quickly match you with a local financial advisor who can help you with your financial planning. You can input your financial goals, which can include protecting your family, saving for retirement or growing your investments, and the tool will pair you with a financial advisor to discuss product options to help supplement your goals.
State Farm stands out in our list of best whole life insurance companies. Not only did State Farm rank number one in the J.D. Power study, but it also boasts an A++ (Superior) financial strength rating from AM Best. State Farm is the largest all-lines insurer in the U.S., so it may be a great option for shoppers who value robust digital tools and want to keep all their insurance products with a single carrier.
State Farm offers three policy payment options for its whole life insurance product. You can pay in one lump sum, pay level premiums that will stop at age 100 or choose a limited number of years to pay. State Farm’s 19,700 licensed agents across the U.S. may be appealing if you prefer to do your business locally. You can find an agent in your area using its “Find an Agent” tool accessible via its website.
How to find the best whole life insurance company for you
There are several important factors that you may want to consider as you shop for a whole life insurance policy. One of them is financial strength. The financial ratings provided by third-party agencies such as AM Best, Fitch, Moody’s and S&P show a company’s historical financial stability and its ability to pay claims, especially after a catastrophic event that may impact hundreds of its policyholders simultaneously.
To learn more about other policyholders’ experiences with a company, you can visit the Department of Insurance website in the state where you live to find out how many complaints the company has received during the past year or two. Similar information is also available through the NAIC. J.D. Power’s annual customer satisfaction surveys may also give you a good measure of each life insurance company’s overall customer experience.
You may also want to consider a company’s quoted premiums, as there are several types of whole life products that offer different features. Beyond the price, it’s helpful to consider how well a policy’s unique features benefit you compared to other types. The Insurance Information Institute (Triple-I) explains that it is beneficial to obtain quotes from several life insurance companies to compare coverage options and choose the best insurer for your own needs.
Whole life insurance vs term life insurance
Since whole life insurance covers you for a longer period of time than term life insurance, the cost of a policy is generally more expensive. Term life insurance is also sometimes called pure life insurance because it only offers a death benefit, though some carriers offer riders for term life that allow you to customize your policy. You might prefer the benefits of whole life insurance if you are looking for a policy that will not expire and builds cash value.
Term insurance's limited policy period may make it a good choice for young families since it can be purchased to last until children are grown and no longer need financial support from their parents. Some individuals may wish to take advantage of both types of insurance, laddering their policies to provide comprehensive coverage for the lifetime of the policyholder that is customized to their family's needs
| Whole life insurance | Term life insurance |
|---|---|
|
Lifetime coverage Builds cash value Guaranteed death benefit Level premiums (typically) |
Temporary coverage Doesn’t build cash value Less expensive Guaranteed death benefit Level premiums |
Frequently asked questions
Mary Van Keuren has written for insurance domains such as Bankrate, Coverage.com, and The Simple Dollar for the past five years, specializing in home and auto insurance. She has also written extensively for consumer websites including Reviews.com and Slumber Yard. Prior to that, she worked as a writer in academia for several decades.
