Americans paid $679 billion in life insurance premiums and annuities in 2019 alone. This is more than they paid for all property and casualty insurance combined. Life insurance is a core component of many Americans’ long-term financial plans, so choosing a dependable insurance company is key. Since the largest life insurance companies also tend to have reputations as the most stable, consumers turn to these companies over and over again. In fact, according to our list of life insurance companies with the most direct premiums written, more than half of the market share is owned by just ten insurers.
Still, just because a company issues more policies than its competitors does not make it the immediate best choice. There are pros and cons to choosing a large or small life insurance company. First, let’s look at the biggest life insurers in the U.S. – and then we will discuss why choosing a company from that list may or may not be the right decision.
List of life insurance companies
The National Association of Insurance Commissioners (NAIC) keeps an updated list of the largest life insurance companies. The list is ordered by market share, calculated based on the value of premiums written per year.
Northwestern holds top place, writing well over $11.2 billion worth of premiums and holding 6.48% of market share. New York Life and MetLife are in close pursuit, writing 11.053 and 10.767 billion claims respectively, although both companies fail to hold the top-tier ratings that Northwestern boasts. Also on the list are many other life insurance companies you will likely find familiar.
|Rank||Company||Market share||Premiums written (billions)||J.D. Power rating
(763 industry average)
|1||New York Life Group||6.75%||11.694||784/1,000|
|2||Northwestern Mutual Group||6.35%||11.297||890/1,000|
|4||Prudential of America Group||5.80%||10.058||759/1,000|
|5||Lincoln National Group||4.83%||8.370||749/1,000|
|6||Mass Mutual Life Insurance Group||4.57%||7.915||769/1,000|
|8||Aegon US Holding Group||2.80%||4.860||734/1,000|
|9||John Hancock Group||2.73%||4.727||737/1,000|
|10||Minnesota Mutual Group||2.70%||4.688||Not rated|
Choosing small vs. large life insurance companies
When choosing the best life insurance company, is it best to stick with an insurer on the list of life insurance companies who write the most premiums? Not necessarily. There are certainly advantages to going with a major insurer, but taking a look at smaller companies is, at the very least, worthy of consideration.
What to look for beyond size
The most obvious reason to go with a large life insurance company is that they have more financial assets and therefore have an easier time achieving financial stability. That is not to say that a larger life insurer will automatically be more stable; this is something you should confirm by looking at the company’s financial stability rating. It’s a good indicator of how reliable and efficient a company will be when paying your claim.
AM Best rates the ability of insurance companies to meet their insurance obligations on a scale from A++ to D. The scores A++ and A+ are considered “Superior”; scores of A and A- denote an “Excellent” rating.
There are other factors to consider, as well. Things like a company’s business ethics, community endeavors, and technology development are all things that can help one company to stand out over another.
Choosing a large life insurance company
Large life insurance companies also tend to have more years in the business. MetLife, for example, which tops the list of largest life insurance companies, was founded in 1868. With more than a century and a half writing policies, you can be certain this company knows what they are doing.
The digital tools offered by large life insurers are often unmatched by smaller competitors. For example, you might be able to manage your policy through a smartphone app or get instant quotes online from a company that has the resources to put into these features. Smaller companies simply do not have the budget to develop advanced technological tools most of the time.
On a similar note, larger life insurance companies can sometimes offer easier access to customer service channels. You may be able to get in touch with a company representative without having to pick up the phone, thanks to mobile apps and live web chat. But if you would rather dial in, larger companies typically extend phone hours or even provide 24/7 support.
Choosing a small life insurance company
On the other hand, small life insurance companies can provide more tailored customer service thanks to personalized relationships with their customers. If you do business with a small life insurer, you might work with the same representative for years or even decades. This professional can make better recommendations for your individual needs – not to mention providing friendlier service overall.
Smaller life insurance companies sometimes provide more specialized coverage. For example, some small life insurers are created specifically for certain groups such as military members or educators. A small specialty life insurer might also be a good choice if you are looking for a very precise type of coverage, such as final expense insurance or critical illness coverage.
Last but not least, if you have been denied coverage from a major life insurance company, it is worth asking around with smaller competitors. While large life insurers can afford to turn down customers, small companies often have to be more flexible in order to win business. It is possible that a smaller insurer will be willing to waive a medical exam or overlook the pre-existing condition that caused your application to be rejected elsewhere.
Frequently asked questions
What is the largest life insurance company?
As of 2019, MetLife is the largest life insurance company. MetLife writes more than $95 billion in premiums per year and holds a 13 percent market share of the life insurance industry.
Is it better to choose a large life insurance company?
There are a few reasons you might want to go with a large life insurance company. Larger insurers have more financial assets and a better chance at long-term stability. They also tend to have more years in the business. Major life insurers can also provide customers with better resources, such as digital tools and apps, and they may have a more accessible customer service department.
What are the advantages of a small life insurance company?
Purchasing life insurance from a smaller company can absolutely have its benefits. Smaller companies oftentimes offer more specialized coverage, so you may be able to find a small insurer that offers tailored policies to your individual situation. The service you will get from a small company will also be more personalized. Finally, in some cases, smaller companies can be more accepting to those who have been denied life insurance from major insurers.