Life Insurance Review Methodology
No one wants to think about their own mortality, but purchasing life insurance can provide your loved ones with essential protection. If you pass away, your life insurance policy can cover your funeral and burial expenses, replace lost wages, and even pay off your existing mortgage.
We know that ensuring your family has access to the financial resources they need is a priority of yours. To help you find the right life insurance policies for your loved ones, we’ve completed extensive research into 91 companies offering life insurance. This guide will explain what criteria we used to evaluate each company’s offerings.
Which Articles Use Our Methodology
Life insurance is an important financial topic for us and our readers, and it’s one that we’ve written a lot about. We have many articles about the best life insurance companies for specific products or to meet the needs of particular readers. It’s important to note that this methodology only describes the process used for compiling our list of Best Life Insurance Companies. All other articles on our website that list the best life insurance companies for certain products or readers (for example, Best Term Life Insurance or Best Life Insurance for Seniors) rely on information collected as part of the grading process described in this article, but selections and order of providers are based on additional product-specific data plus subjective insights from our editors and industry experts.
We started off by researching what consumers want from life insurance companies, and for that, we looked to third-party consumer studies, including J.D. Power’s 2021 U.S. Life Insurance New Business Study and the 2021 Insurance Barometer Study, by Life Happens and LIMRA.
Based on this and our industry expert, we designed a comprehensive ranking methodology to rate each company across five general categories, each category consisting of multiple data points:
- Application and online service features
- Policy types, features, and riders
- Financial stability
- Customer satisfaction
We looked at 55 data points per company. Our research team scoured consumer and professional information available on company websites, and reached out to company representatives to fill information gaps and fact-check information we already had.
Then, each data point was individually scored on a numeric scale to indicate how well or poorly a company fared in that metric. Most features were scored on a 0 to 1 scale, with 1 being the best a company could do for that metric and 0 being the worst. These data points were then weighted based on importance in order to calculate an overall score for each company. Companies were scored on a scale of 0 to 5, with 5 being the highest.
Application and Online Service Features
This entire section accounts for 32% of the total weighted score in our evaluation. Making it easy and convenient for consumers to understand product offerings and then apply and pay says a lot about how a company values transparency and service.
To evaluate how each company fares on that front, we reviewed the following factors:
- Application process
- Online quotes and tools
- Accepted forms of payment
We looked at whether companies made online applications available on their website (especially for term life insurance), whether agent contact was required to apply for coverage, and turnaround time for policy approval. Although agents often play a valuable part in educating buyers, there is even more value in giving consumers the choice to apply on their own. We also considered whether no-exam applications were available, and how much coverage was available without a medical exam.
|Application Process||Numeric Score|
|No-medical-exam applications available for more than $50,000 in coverage/ available for $50,000 or less in coverage/unavailable||1 / 0.5 / 0|
|Online application available (without agent contact)/unavailable||1 / 0|
|Same day decision available/unavailable||1 / 0|
Online Quotes and Tools
When evaluating your insurance options, it’s important to do your homework ahead of time. We looked at what information and tools each company made available to potential customers to allow them to do research before purchasing a policy.
Here are the features we looked for:
- Online quote
- Insurance calculator to estimate coverage needs
- Live chat
- Educational resources
We scored websites with the following scale:
|Online Tools||Numeric Score|
|Online quote available/unavailable||1 / 0|
|Life insurance calculator available/unavailable||1 / 0|
|Live chat available/unavailable||1 / 0|
|Educational resources available/unavailable||1 / 0|
Accepted Forms of Payment
As a rule, life insurance companies accept funds directly from a checking or savings account. But not all accept credit card payments. Since life insurance policies can lapse for non-payment, this is an important feature for some consumers.
|Credit Cards||Numeric Score|
|Credit card payments accepted/not accepted||1 / 0|
Policy Types, Features, and Riders
The features in this section together account for 29% of the weight in our scores for companies.
We researched what types of products each company offered, paying particular attention to term insurance options, features, and available riders, as these policies are often the easiest to purchase. Companies with the broadest portfolios generally scored well. Those that included valuable policy features at no extra cost, such as accelerated death benefit riders and term conversion, scored the highest.
The general elements we looked at were:
- Coverage types and features
- Term-specific options, if applicable
- Available riders
Coverage Types and Features
A diverse product line may be important to consumers who are not sure what kind of insurance they need as more types of insurance means more choices for shoppers. Here are the types of policies we considered:
- Term life: Term policies (without a conversion or renewal feature) expire once the term of the policy is up. Unless the policy has a return of premium feature, premiums are irrecoverable if you outlive the policy.
- Final expense: Final expense policies do not require a medical exam and ask few to no health questions on the application.
- Whole life: A whole life insurance policy provides insurance for your entire lifespan; the premiums and death benefit are determined when the policy is issued.
- Participating whole life: Some mutual insurance companies offer policyholders the possibility of receiving an annual share of the company’s profits via dividends. (Since relatively few companies offer dividends, we decided not to score this feature.)
- Universal life: A universal life insurance policy provides insurance for your entire lifespan; the premiums and death benefit are flexible.
- Indexed universal life: Index universal life is a universal life insurance policy in which the cash value tracks the performance of a market index like the S&P 500.
Coverage types and features accounted for a total of 15% of our overall weighting for a company’s score.
|Coverage Options||Numeric Score|
|Term available/not available||1 / 0|
|Universal life available/not available||1 / 0|
|Indexed universal available/not available||1 / 0|
|Whole life available/not available||1 / 0|
|Final expense available/not available||1 / 0|
|Maximum coverage amount||A range between 0 and 1
(0 = lowest maximum coverage; 1 = highest maximum coverage)
|Maximum issue age||A range between 0 and 1
(0 = lowest maximum age; 1 = highest maximum age)
Term Life Options
We paid particular attention to term-specific features and options since these types of policies are the most likely to be purchased without agent assistance. We looked at:
- Maximum available term: Many companies let you choose how long you want term coverage to last for. The longest option most companies provide is 30 years, but some allow longer coverage terms. Although not everyone may need long-term coverage, we scored companies higher for giving the choice of longer coverage.
- Conversion privilege included: A conversion privilege allows the policyholder to convert term to permanent (lifetime) coverage within a specified number of years after the policy is issued without having to prove insurability (answer health questions or take a medical exam). The new premium is based on your age when you convert.
- Annual renewal included: Annual renewal allows you to continue your term coverage on an annual basis once the term expires without having to prove insurability. The new premium is based on your age at the time of renewal, and so increases each year you renew the policy.
Term options accounted for a total of 6% of our overall weighting in this category.
|Term Options||Numeric Score|
|Maximum term available||A range between 0 and 1 (0 = shortest term; 1 = longest)|
|Conversion privilege included/not included||1 / 0|
|Annual renewal included/not included||1 / 0|
An insurance rider is an amendment to an insurance contract. You can use a rider to add additional coverage or expand the scope of existing coverage. Many riders require an additional premium payment but some, such as some accelerated death benefit riders, do not. We gave extra weight to accelerated death benefit riders that were available free of charge.
It’s important to understand which riders are available to you and which are automatically included in your policy, as it can help you better compare quotes and decide which policy best suits your needs. Note that similar riders may be called different names, depending on the company. These are the riders we considered when scoring companies.
- Child term: Rather than having to buy a separate policy, a child rider allows you to add coverage for your child to your existing policy.
- Waiver of premium: Waiver of premium riders waive your premium payment if you meet the rider’s criteria, such as becoming disabled or losing your job.
- Accidental death: With this rider, if you die as the result of an accident, the cash amount your beneficiaries receive will increase.
- Guaranteed insurability: This rider gives you the option to increase life insurance coverage at certain ages or upon certain trigger events, such as marriage or the birth of a child, without having to prove insurability.
- Disability income: This uncommon rider provides a monthly benefit if you become disabled (as defined by the rider). It is not the same as a “disability waiver of premium” rider.
- Accelerated benefit riders (ABRs): These riders accelerate the death benefit if you experience certain health events. What this means is that you can access the death benefit “early.” We looked at accelerated death benefit riders for critical, chronic, and terminal illnesses plus long-term care. All riders generally have a lump-sum benefit except for long-term care which provides a monthly benefit.
Riders accounted for a total of 8% of our overall weighting for a company.
|Rider Options||Numeric Score|
|Child term available/unavailable||1 / 0|
|Waiver of premium available/unavailable||1 / 0|
|Accidental death available/unavailable||1 / 0|
|Guaranteed insurability available/unavailable||1 / 0|
|Disability income available/unavailable||1 / 0|
|Terminal illness ABR available at no cost/available for a fee/unavailable||2 / 1/ 0|
|Critical illness ABR available at no cost/available for a fee/unavailable||2 / 1/ 0|
|Chronic illness ABR available at no cost/available for a fee/unavailable||2 / 1/ 0|
|Long-term care ABR available at no cost/available for a fee/unavailable||2 / 1/ 0|
Additional Product Lines
While we decided not to consider additional product lines in the company’s overall score, we gathered data on which of the following insurances each company offered. We discussed this, where relevant, in individual company reviews.
This section accounts for 17% of our total weighted score.
Life insurance companies make promises to pay large lump sum death benefits, often in the millions of dollars, during times of great emotional and sometimes financial duress for the beneficiaries receiving those funds. Therefore, it’s crucial that your life insurance company be financially stable so that it can make good on its promise to pay your beneficiaries.
To assess the financial stability of each company we reviewed, we considered its AM Best rating and how many years it has been in business.
- Financial Strength Rating from AM Best
- Years in business
AM Best Rating
AM Best was founded in 1899 and is the world’s first credit rating agency. Its focus is on the insurance industry, and it evaluates insurers’ financial strength—meaning a company’s ability to meet its policy and contract obligations. AM Best rates insurance companies on a scale of A++ to D-. In choosing the best insurers, each company’s AM Best rating accounts for 15% of its total score.
|Rating Category||Rating Symbol||Rating Notches||What it means|
|Superior||A+||A++||Assigned to companies that have what AM Best considers a superior ability to meet their ongoing insurance obligations.|
|Excellent||A||A-||Assigned to companies that have what AM Best considers an excellent ability to meet their ongoing insurance obligations.|
|Good||B+||B++||Assigned to companies that have what AM Best considers a good ability to meet their ongoing insurance obligations.|
|Fair||B||B-||Assigned to companies that have what AM Best considers a fair ability to meet their ongoing insurance obligations. Financial strength is vulnerable to adverse changes in underwriting and economic conditions.|
|Marginal||C+||C++||Assigned to companies that have what AM Best considers a marginal ability to meet their ongoing insurance obligations. Financial strength is vulnerable to adverse changes in underwriting and economic conditions.|
|Weak||C||C-||Assigned to companies that have what AM Best considers a weak ability to meet their ongoing insurance obligations. Financial strength is very vulnerable to adverse changes in underwriting and economic conditions.|
|Poor||D||D-||Assigned to companies that have what AM Best considers a poor ability to meet their ongoing insurance obligations. Financial strength is extremely vulnerable to adverse changes in underwriting and economic conditions.|
Using AM Best’s Financial Strength Ratings, we scored each life insurance company on a scale of zero to one. The lowest ranked insurer we considered received a B.
|AM Best Financial Strength Rating||Numeric Score|
|Superior Rating (A++)||1.0|
Years in Business
How long a company has been in business is an indicator of the insurer’s stability and strength. Companies that have survived decades of change and recessions show that they can adapt to changing conditions and customer demands.
Since an insurance company’s longevity is an indicator of its financial stability, we considered how many years each insurer has been in business. This metric accounted for 2% of a company’s overall score.
|Company Longevity||Numeric Score|
|Years in business||A range between 0 and 1 (0 = fewest years in business; 1 = most years in business)|
This section accounts for a total of 15% of our overall score for a company.
The National Association of Insurance Commissioners (NAIC) is a regulatory organization that maintains a database of complaints filed against insurance companies. With this data, the NAIC creates an index that conveys how many complaints the insurance company has received relative to how many complaints it is expected to receive based on its size, or market share. We averaged each company’s NAIC index over three years.
If a company received fewer complaints than expected, its index is less than 1. An index of 0 means the company received no complaints. An index greater than 1 means the company received more complaints than expected. Some examples of complaints are delays of benefit payment, poor claim handling, and claim denials.
|NAIC Complaint Ratio||Numeric Score|
|Excellent (> 0.50)||1|
|Great (0.5 < 1.0)||0.8|
|Okay (1.0 < 1.5)||0.6|
|Fair (1.5 < 2.0)||0.4|
|Poor (2.0 < 5)||0.2|
|Very poor (> or equal to 5)||0|
This section counted for 8% of our total score for a company.
When it comes to cost, we researched quotes from each company for men and women in different age groups in excellent health for a $250,000 30-year term policy. We used the following statistics to run quotes for six different sample applicants:
- ZIP code: 94027 or 90666 (depending on policy availability)
- Birthday: 11/01/1996; 1981; 1966
- Health: Exceptional
- No medications
- No negative family health history
- Length of coverage: 30 Year Term
- Coverage amount: $250,000
Every insurer assesses applicant risk a bit differently, and cost can vary. Your rate is dependent on your age, desired coverage, health history, and overall risk profile.
We scored companies on a range between 0 and 1 (0 = the most expensive policies; 1 = the least expensive)
|Monthly cost||A range between 0 and 1 (0 = the most expensive policies; 1 = the least expensive)|
Shopping for a Life Insurance Policy
When looking for a life insurance policy, it’s wise to shop around and look at policies from different companies. We evaluated 91 companies to help you find the best life insurance for your needs, and our reviews are designed to answer your questions so you can make an informed decision.
In a recent interview with Andrew Mais, commissioner of the Connecticut Insurance Department, he said, “there are two things that I would argue are important: A, that the insurer has the ability to pay your claim, and, B, that the insurer has the willingness to pay your claim.”
There is no one best life insurance company for all consumers. In our reviews, we included information about each insurer’s life insurance policy options, coverage amounts, customer service, pricing, and the company’s reputation. We included details about both the pros and cons so you can decide whether or not the company is a good fit for you.