Term life insurance is not the most pleasant service to shop for, but it's important to have, especially if you have young children. Finding your best term life insurance option is a good way to safeguard the future of your loved ones in the event something happens to you.
I've taken a look at some of the best term life insurance policies to determine who offers the best values. Here are some of the best providers I found based on my research.
What is Term Life Insurance?
Term life insurance (also referred to as temporary life coverage or term assurance) is obtained through fixed installment payments for a predetermined length of time, normally specified in yearly increments.
The premium paid for term life insurance is largely dependent on the probability of the insured dying during the term length. For that reason, it's often purchased by younger individuals and instated until they reach retirement age.
Best Term Life Insurance Companies: What to Consider
1. Term vs. Whole Life Insurance
Unlike the original form of life insurance - whole life - which maintains a living benefit in the sense that policyholders build up a cash value in the policy while they are paying it, term coverage only equates to benefits once the individual dies and the policy is paid out to the beneficiaries.
2. Personal Health and History
When you apply for coverage, the provider will take many factors into consideration regarding your personal health and history. Such components include blood pressure, weight, cholesterol level, medications and even your family's medical history. In some instances, the provider might also require a medical test as part of its underwriting process; this is where a nurse will visit your home or office, or you can visit a doctor's office to do the testing. The provider will use the results to assess risk and then determine eligibility and pricing of your policy based on the results.
3. Pricing and Policy Premiums
Are you able to obtain a quote online, by phone or through email? Sometimes an online quote is the fastest and most effective way to get a ballpark figure of your rate. Moreover, some providers will allow you to begin an application online but then they must contact you to finish the application.
This usually occurs in the event they need to verify information, setup a medical test or speak with you about all the different policies they have available. Although it might seem cumbersome to speak with a licensed insurance agent over the phone, keep in mind they are also great resources should you have questions.
4. Medical Underwriting Requirements
Medical underwriting basically means the insurance company requires a medical exam to instate coverage. What happens when a policy is not underwritten? When this step is omitted, the liability is transferred over to policies across the board and as a result the average per policy goes up.
For individuals who are in good health and have a low mortality risk, it's in your best interest to find the best life insurance company that conducts thorough medical underwritings.
5. Financial Stability
Selecting a provider with a financially sound reputation is always advised. You should have peace of mind that your provider won't mismanage your investment or worse yet, leave you high and dry in a fiscal calamity.
6. Customer Service
How a provider treats its customers is also a good indication of its reputation. When you conduct research into a company's reputation using websites like the Better Business Bureau, it's important to look for things like unresolved customer complaints. When a provider has a large amount of them, it can be indicative of a bigger problem.
Another way to examine customer service is by examining the options it provides its current customers. Does it have flexible customer service hours? How easy will it be for family members to file a claim? Does it offer easy payment options? Can you make adjustments to your policy if need be? By finding answers to these questions, it shows you the level of care the provider has for its customers.
7. Minimum Coverage Amounts
Experts advise getting a policy which equates to 20 times your annual income.
8. Coverage Perks
Typically, insurance providers will try to allure you by making its best life insurance policies full of perks. As an illustration, some insurance providers will offer added features with their term life insurance policies such as adding accident or disability benefits to help you have access to money you need in the case you are unable to work.
Additionally, many of the larger providers might be willing to give you discounts if you bundle multiple policies with them (auto, renters, home, life, etc.) so be mindful of these things when you choose a provider.
Some reputable insurance companies will give you a window where you can try its term life insurance and if for any reason it won't be a good fit, the provider will give you your money back if you cancel within a specified time. This is great because it shows a level or transparency in that the provider is so confident in the best life insurance policies it offers that it's willing to give you your money back if you don't receive full satisfaction.
10. Additional Services
Large insurance providers will include additional services as part of your policy. Some of these include retirement planning, annuities, small business insurance, managed accounts, so on and so forth.
Be sure read all our reviews of the top term life insurance companies.
3 Reasons Why You Need Term Life Insurance
I never thought much about the value and need for life insurance. I knew that I had coverage through my employer, and I always assumed that this would be enough for my family should I pass away unexpectedly. Life Insurance is a difficult money "investment" to justify because we will never see the return on this "investment;" however, there are three reasons why life insurance makes sense for you and your family.
1. You are Married
If you were to pass away unexpectedly, your spouse would be responsible for managing and paying all of the debts that may have been incurred before you passed. In addition, he or she will also have the added cost of providing for your memorial or burial arrangements. It is traumatic enough to lose the person you love; however, the grief will only be compounded if the spouse is left with a financial burden as well.
Insurance will provide your spouse with the ability to manage the finances and maybe even the flexibility to take time off from work to manage the emotional trauma.
2. You own a Home
If you own a home with your spouse or significant other, this is a large debt for one person to assume in the event of an untimely passing. This could be an even greater burden if the person who passes was the higher income provider in the relationship. Selling the home could be an option; however, if the real estate market is not strong, then the surviving homeowner will be forced to take a loss or a financial hit in order to sell the home. Insurance will give the surviving homeowner the ability to stay in the house and determine the best next steps in life on his or her own time.
3. You have children under the age of 25
Whether or not you plan to pay for your children's education, they require various amounts of financial commitment up until a certain point in their lives. It would be difficult for any child to lose a parent; however, the loss would be compounded if the child also suffered financially because of a resource drain on the surviving parent. Life insurance would give the surviving parent the security to pay for education if they chose or at the very least, it would cover the costs of supporting the children until they reached adulthood.
The Best Term Life Insurance Companies
Although many of the best term life insurance companies have term life insurance available, not all offer the same level of service, transparency and exceptional product offerings.
I chose these five providers because they have continually shown a high level of commitment to delivering the best term life insurance policies for their customers. Here are the top five best term life insurance company ratings.
MetLife Life Insurance
- Coverage amounts starting at $5,000
- Coverage up to age 90
- Online policy management
- Level term life insurance for coverage amounts $10,000+
- Phone, email, and online quote tool
- No medical exam for coverage under $100,000
- Limited payment options
MetLife operates in 60+ countries and with over 90 million customers, MetLife is one of the world's largest providers of insurance programs as well as annuities. Founded in the late 1860s, MetLife later reformatted itself for the benefit of its policyholders through a process known as mutualization. In 2000, MetLife made the decision to go public and now serves roughly 90 of the top Fortune 500 companies.
Although this specific review covers only term life insurance, MetLife also scores high for their whole life, universal life, and survivorship insurance policies so if you find that term life insurance doesn't suit your needs, consider this provider's other offerings. MetLife is also offering some of the best term life insurance for seniors since it includes coverage up to the age of 90 years old.
AIG Direct Life Insurance
- Term lengths range from 10 to 30 years
- Offer fixed premiums for the term
- 5 types of term life insurance
- Phone and email rate quote
- Additional services available
- Coverage up to age 70
- Online rate quote unavailable
- No local offices/agents
AIG Direct term life insurance ranks high on our list for its impressive and wide-ranging services. The term lengths start at ten years and extend to thirty years along with a fixed payment schedule. In total, there are five different types of life insurance to choose from which level, renewable, decreasing, convertible, and a return of premium.
USAA Life Insurance
- Excellent array of life insurance products available
- Free financial advice for life insurance beneficiaries
- Simple application process
- $25,000 severe injury benefit with military term life insurance
- Expedited application for members facing deployment
- Only available to military families
USAA continues to be one of the most reputable financial companies available. It offers a variety of life insurance products, including level term and military term policies.
While you must be a member or a relative of a member of the U.S. Military to have access to these products, if you do, you receive some amazing perks such as free financial advice for beneficiaries, an optional $25,000 severe injury benefit (on select policies) and the option to purchase protection for your children. Overall, USAA's high level of service and exceptional product offerings make it a great choice.
AAA Life Insurance
- 31-day money back guarantee on Express Term life insurance policy
- Flexible coverage and term options available for all policies
- Guaranteed level payments during terms duration
- Access to funds in the event of terminal illness
- Isn’t available to NY residents
AAA Life offers a variety of life insurance products and quick accessibility to sign up for its policies. You can complete an application and within minutes have the coverage you need without the need for a medical exam in many instances. It offers flexible coverage amounts ranging from $25,000 to $250,000 with its Express Term Life Insurance, making it a great option for all budgets.
It also offers a traditional term life insurance plan, where you will work with a specialist along the way. This gives you access to the help you need so you can better understand the policy you buy. Ultimately, its level of service and convenience gives AAA an edge on many of its competitors.
StateFarm Life Insurance
- $100,000 min. coverage amount
- High BBB rating
- Phone, email, and online rate quotes
- Range of additional services available
- Phone and email support available
- Some negative feedback regarding agents
State Farm - "Like a good neighbor, State Farm is there!" You've probably heard this jingle more than a few times and with good reason. State Farm Insurance has some of the best offerings available on the market. The minimum coverage for a term life insurance policy is $100,000, and that applies to individuals up to the age of 95. That's applicable for term lengths of 10, 20 or 30 years.
You can request a rate quote online, by email or over the phone. Plus you have some optional services to choose from including retirement and estate planning, annuities, managed accounts, long term care and small business insurance.
How Much Term Life Insurance Do I Need?
Of course, a cheap life insurance policy is preferable, but it's important to get the right amount of coverage. Many experts advise getting a policy which equates to 20 times your annual income. However, a more intuitive answer depends on more than just your income. It's important to take debts into consideration, your children's age, how much you typically spend per month, and several other factors.
If you are looking for term life insurance, your policy should last you at least as long as your children are dependents.
Advice for Finding the Best Term Life Insurance Companies
Since term life insurance is an essential part of financial planning, it's vital to understand all its components and the reasons for buying it. Our informative articles on term life insurance can help you understand all its facets so you can feel more comfortable when you decide to buy.
- Roughly speaking, term life insurance protects people - say, your minor children - who depend on your paycheck. Life insurance provides income to your loved ones if you die prematurely until they have sufficient income to replace yours. Some term life insurance clauses allow you to plan for things like emergency funds as well as money for legal, medical and funeral expenses - a smart and economically proper move, especially if your family can't afford those often pricey end-of-life costs. Our article on simplifying life insurance takes a closer look at the basics so you understand the policies better.
- Term life insurance is an important topic not only for you but also for your loved ones – as well as anybody else who depends on your financial support to live or survive. But if you do your homework in advance and get answers to the most common life insurance questions found in this helpful guide, your journey to life coverage would be easier and you could get the best term life insurance policy you want.
- Buying any type of life insurance can be a grueling process. Not only are you forced to think about the future, but you know you are going to be spending money. For some people, this is a "double whammy" that is sure to drag them down for a few days (or longer). Term life insurance is a common option that you will likely consider as you embark on your journey to purchase the best policy. However, before you purchase this type of policy you better answer these questions found in our in-depth guide.
- Term life Insurance is a difficult money "investment" to justify because we will never see the return on this "investment;" however, there are three reasons why life insurance makes sense for you and your family. Our guide examines the three reasons you need life insurance in-depth so you can make the best decision for you and your loved ones.
Customer service, legitimacy, and company reputation are three important factors to consider when doing business with any of the companies reviewed in this article. Head over to the American Customer Satisfaction Index for a numerical analysis of customer satisfaction within the life insurance industry.
Cheap Term Life Insurance
Many cheap term life insurance policies provide you with peace of mind in knowing you are providing financial protection for your loved ones in the event you pass away.
To assist you in selecting the best one for you, we'll look at the many factors that make up term life insurance quotes, the top providers, helpful articles to assist you in your buying decisions and a FAQ section to address any questions you might have.
Term Life Insurance Quotes
It's never fun to think about buying term life insurance, but it can make a significant difference when it's there when you need it. Though, finding the best term life insurance rates doesn't have to be a complicated process. Take a look at our side by side comparison of the best term life insurance quotes to make sure you are getting the best premium you can.
Term Life Insurance Review Recap
Review the pros and cons of all term life insurance providers once more before electing to go with one over the other. All of the companies mentioned here come highly rated and win our stamp of approval for their services and offerings. To get a more accurate picture, however, it's best you contact the provider directly or visit them online to get a quote.
If you are looking for other types of insurance take a look at some of our other reviews before you buy. Our review of the best homeowners insurance companies may help you find better coverage than what you already have.
We have also reviewed the best health insurance companies. Keep in mind that insurance is not something you need to take for granted. Periodically take the time to shop for new providers and plans can help you save.