Best Term Life Insurance Companies

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A term life policy is the most affordable option available for you to safeguard the financial needs of your loved ones in your absence. There are a wide range of choices available for you with respect to term life policies, since every single insurance company in the country issues them.

In this article, we take a look at the options available for you when it comes to term life insurance companies, the factors to be considered while looking for one, and the 10 best term life companies in the industry today.

Top 10 Term Life Insurance Companies in the USA

aig life insurance logoAIG

Financial Ratings

AM Best: A

Moody’s: A2

S&P’s: A+

Fitch: A+

Term Policies Offered

AIG offers two types of term life policies – Select-a-Term and QoL Flex Term.

Select-a-Term allows you to choose the duration of your policy. There are 18 different options to choose from – 10 years, 15 – 30 years, or 35 years. The premium stays unchanged during the initial term period, after which the policy can be converted into a permanent life policy.

QoL Flex Term is similar to Select-a-Term, except for the fact that it comes with an accelerated death benefit rider, which is included in the policy at no extra cost to you. The rider allows you to access a portion of your policy’s death benefit in case you develop a chronic, critical, or terminal illness.

state farm logoState Farm

Financial Ratings

AM Best: A++

S&P’s: AA

Term Policies Offered

Select Term From StateFarm offers 10, 20, or 30 years of coverage, during which the premium remains unchanged. It can be renewed until you reach the age of 95 and can also be converted into a permanent life policy.

Return of Premium – It offers 20 or 30 years of level-premium coverage, after which the total amount of premiums you paid will be returned to you. You can renew it until you turn 95 or convert it into a permanent life policy.

Mortgage Life – It offers 15 or 30 years of coverage. The death benefit remains unchanged for five years, after which it gets reduced in tandem with your mortgage. It can be converted into a permanent life policy as well.

Instant Answer – It provides 10 years of coverage or until you reach the age of 50, whichever is longer. The death benefit is fixed at $50,000.

protective life insuranceProtective

Financial Ratings

AM Best: A+

Moody’s: A1

S&P’s: AA–

Fitch: A+

Term Policies Offered

Protective Classic Choice – It offers 10 to 30 years of level-premium coverage and anywhere from $100,000 to $50,000,000 in death benefit. You have the option of converting it into a permanent life policy without undergoing a medical exam.

axa logoAXA

Financial Ratings

AM Best: A

Moody’s: A2

S&P’s: A+

Term Policies Offered

BrightLife TermOne – It offers coverage for only one year and cannot be renewed after expiry. It offers a death benefit ranging from $25,000 to $1,000,000 – depending on your age and other factors.

BrightLife Term – It offers level-premium coverage for 10, 15, or 20 years. A living benefits rider is included in the policy at no extra cost to you. It allows you to receive a portion of the death benefit in case you develop a terminal illness.

mutual of omaha logoUnited of Omaha

Financial Ratings

AM Best: A+

Moody’s: A1

S&P’s: AA–

Term Policies Offered

United of Omaha offers a standard term life policy which covers you for a period of 10, 15, 20, or 30 years, during which the premium stays the same. You can convert it into a permanent life policy after the level-term period.

lincoln logoLincoln Financial

Financial Ratings

AM Best: A+

Moody’s: A1

S&P’s: AA–

Fitch: A+

Term Policies Offered

Lincoln TermAccel – It offers level-premium coverage for 10, 15, 20, or 30 years. Once the level-premium period ends, you can renew the policy every year until the age of 95. The death benefit can range from $100,000 to $1,000,000.

Lincoln LifeElements – It is similar to TermAccel, but the death benefits offered are significantly higher – starting from $250,000.

Both policies can be converted into a permanent life policy at the end of the level-term period.

Banner Life Insurance ReviewBanner Life

Financial Ratings

AM Best: A+

S&P’s: AA–

Fitch: AA–

Term Policies Offered

Banner Life offers a pure term life policy which covers you for 10, 15, 20, 25, or 30 years. Through their APPcelerate program, you can qualify for the policy in a single day without any medical exam – if you are a non-smoker and meet certain other criteria. It can be converted into a permanent life policy as well.

prudential life insurance logoPrudential

Financial Ratings

AM Best: A+

Moody’s: A1

S&P’s: AA–

Fitch: AA–

Term Policies Offered

Term Essential – It offers coverage for 10, 15, 20, or 30 years, can be renewed until the age of 95, and can be converted into a permanent plan.

Term Elite – It allows you to buy additional coverage for minors and can be converted into a permanent plan within the first five years itself.

SimplyTerm – It offers coverage for 10, 15, 20, or 30 years and includes a terminal illness rider. It cannot be converted into a permanent plan.

PruTerm WorkLife 65 – It is available up to the age of 65. If you lose your job during the coverage period, your premium will be waived off for one year. If you become disabled, your premium will be waived off entirely.

PruLife Return of Premium – It repays the entire premium amount you paid at the end of the coverage period.

PruTerm One – It offers coverage for a period of one year and primarily caters to the needs of those with short-term loans.

american national no exam reviewAmerican National

Financial Ratings

AM Best: A

S&P’s: A

Term Policies Offered

ANICO Signature Term – It covers you for a period of 10, 15, 20, or 30 years. It is very competitively priced and the death benefit can be up to $1,000,000.

Freedom Term – It covers you for 10, 15, 20, or 30 years and does not involve a medical exam. The death benefit can be up to $250,000.

Principal

Financial Ratings

AM Best: A+

Moody’s: A1

S&P’s: A+

Fitch: AA–

Term Policies Offered

Principal offers a pure term policy which covers you for 10, 15, 20, or 30 years with guaranteed level-premium. It is convertible into a permanent life policy.

Term Life Insurance Companies – The Options Available for You

There are nearly 800 life insurance companies in the US today, which means there are an extraordinarily wide range of term life policies available for you to choose from.

You should, at the same time, remember that there is no one-size-fits-all term life policy that can meet everyone’s needs. What suits your needs might not suit someone else’s, what is affordable for you might be too expensive for someone else, and so on.

The same rule applies to term life insurance companies as well. Each company has its own underwriting policy and has a different definition of what they consider a ‘preferred customer’.

There are companies that charge exorbitant rates for smokers and then there are companies that offer affordably priced policies for them. Similarly, there are companies that primarily cater to a young customer base and then there are other companies that cater to older people.

For example, companies like State Farm and AARP offer competitively priced policies for seniors.

AIG is known for offering low-cost policies for young people, MetLife is known for its lenient underwriting guidelines for people suffering from diabetes and high blood pressure, Haven Life is known for its ‘no medical exam’ policies, and Banner is known for offering reasonably priced policies for smokers.

So, the best term life insurance company is one which caters to your specific needs and offers policies that you can afford to buy.

How to Choose the Right Term Life Insurance Company?

With so many options to choose from, you might find it hard to find the right term life insurance company, unless you know exactly what to look for.

Given here is a list of five key factors that you need to consider while choosing a term life insurance company.

Financial Strength

Financial strength is the single biggest factor which determines the reliability of an insurance provider. So, no matter what type of policy you need, you should make sure you buy it from a financially strong and stable company.

Agencies like AM Best, Moody’s, Standard & Poor’s, and Fitch rate insurance companies based on their long-term financial stability. You can check out these ratings to find out if a particular company is trustworthy or not.

Policies Offered

An ideal term life insurance company is one which offers you a policy that is competitively priced and covers your financial needs adequately. It should also offer riders, using which you can boost your coverage, provide additional protection to yourself as well as your family, and make contingency plans for what-if scenarios.

Convertibility

A term life policy, by its very nature, is meant to cover your financial needs for a limited period of time. It could be 10, 15, 20, or 30 years, but it will expire at the end of the term period. If your policy has a convertibility option, you can convert it into a permanent life policy after the initial term period.

If you do not have any family members who are financially dependent on you or if you have a passive income source that covers all your financial needs adequately, you might not have to extend your coverage at the end of the initial term period. Still, life might throw a curveball at you any time, so it is a nice option to have.

Affordable Premium

The premium for a term life policy usually differs from one company to another, since each company has its own terms and conditions and underwriting guidelines.

Moreover, it is important for you to choose a term life insurance company based on your insurability. If you smoke, play extreme sports, serve in the military, use marijuana, have high blood pressure or diabetes, or have DUI convictions in your record, you cannot afford to buy a term life policy randomly from any company you want.

If the company has strict underwriting policies or views your marijuana usage, extreme hobbies, or DUI convictions unfavorably, you might end up paying through the nose for your policy.

So, you should contact different companies, get customized quotes, compare them carefully, and choose a company that offers a policy which is suited for your needs and budget.

Customer Service

Is the company easy to deal with? Do they respond to your calls and emails quickly? Do they take your complaints seriously? Do they have a dedicated customer service team that you contact any time?

These are questions you need to ask before zeroing in on a term life insurance company. If the company’s customer service does not meet your expectations, avoid it by all means and look for a better alternative. Or else, your family might have a hard time filing a claim and receiving a payout after your death.

How Much Coverage Do You Need?

The easiest way to determine the amount of coverage you need on your term policy is to apply the DIME formula.

DIME stands for debt, income, mortgage, and education, which are the four key factors you need to consider while calculating the life insurance coverage you need.

You need to add the total amount of debts you have, five or ten years of your annual income, your mortgage, and your children’s tuition expenses. The resulting amount is what your family might need to take care of their financial needs in your absence.

Another option is to multiply your annual income by 10, add $100,000 for each of your children’s education, and add any debts you have to arrive at a figure.

If you are in your 60’s or 70’s, you need to add an estimate of your final expenses to the calculation. A funeral can cost up to $15,000 and in the absence of a sufficient insurance payout, your family might be forced to dip into their savings accounts to meet the expenses.

Need Help Finding the Right Term Life Insurance Company?

The information given above should help you find the right insurance company and the right term life policy that meets your needs.

In case you have trouble getting personalized quotes from various insurers, do not know how to compare them, or have any questions regarding term life insurance, you can contact us at Noexam.com. We can answer your questions, clarify your doubts, and help you find the right policy and the right company.

Jonathan Holloway

Jonathan is a licensed life insurance agent at NoExam.com that writes about insurance, personal finance, lifestyle, and sports. See our pages on life insurance and life insurance rates for more.


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