What is the right policy for you? Most people will need to decide between term and whole life insurance (and choose term) but there are other options like return of premium, no-medical exam, and variable policies. A licensed agent can help you decipher your options.
Companies also offer different riders. Every carrier won’t offer every rider, and riders aren’t always necessary and may increase the cost of your policy. If you’re just looking to care for your family or cover funeral expenses, a basic policy will work.
Finally, look at the coverage limits. Some carriers have a minimum term length, and some only let you choose terms in increments of five or 10 years. There might also be death benefit minimums to take into account.
The best whole life insurance companies & policies
Whole life insurance is a type of permanent life insurance. It doesn’t expire, and it has an investment-style cash value component.
Whole life can be a good option for people with complex financial situations, so you should know how to pick the best company and policy.
Whole life insurance is more expensive
The first important consideration with whole life insurance is cost; a whole life policy is six to 10 times as expensive as a comparable term life policy, so be sure it fits into your budget.
As you can see, whole life insurance costs considerably more for less coverage compared to term.
➞ Want more? Read our full guide on term vs whole life insurance.
Understand the cash value
Second, consider the financial strength of whole life carriers. This is important to keep in mind regardless, but unlike term life, you can own a whole life policy for as long as you need it. That means it’s even more important to know that a company will still be around for a long time when you’re talking about whole life.
Be sure to know the terms of the cash value component. Every whole life policy has a guaranteed interest rate; know what it is with the company you’re considering.
Also take dividends into account. The strongest whole life policies are usually from mutual companies (like MassMutual, Guardian or Northwestern Mutual) that pay dividends, that can be used to increase the cash value, pay for the policy, or for retirement.
Make sure your policy won't lapse
Finally, ask how the policy handles lapse prevention. A whole life policy can automatically pay premiums using the cash value. This keeps the policy from expiring, but also lowers the cash value amount available to you, so it’s important to know how your policy handles a lapse.
Choosing the best life insurance company
When selecting a life insurance company, take into account:
- Their cost
- Their features
- The individual policies they sell
Term life insurance is typically very affordable — less than $40 a month for many people. Other types of life insurance, like whole life, cost considerably more.
Be sure to get life insurance quotes for multiple companies. Captive agents work for only one insurance company and have limited options available. An independent agent or broker like Policygenius , who works with multiple life insurers instead of just one, can help you with this. Comparing insurance policies to find the best price can save you tens of thousands of dollars over the life of the policy.
And remember, your age, health, and hobbies affect your cost, so use our guides above to find the companies that work best for your individual situation.
Not all life insurance companies operate the same way. It’s important to find one that fits your needs so dealing with them is a hassle.
Depending on the carrier, some steps in applying for or updating policies are only done via paper mail or on the phone, while some are done online. Be sure to find a life insurance company that works the way you do. This might mean deciding between a more modern company like Haven Life or an established old-school carrier like Northwestern Mutual or Mutual of Omaha.
Besides the paper versus phone versus electronic consideration, shoppers should take into account the carrier’s:
- Average application time— From application to in-force policy, the process can take up to eight weeks, but many carriers often complete the process much quicker. Knowing if a particular company is typically faster or slower than other companies helps set your expectations.
- Accepted payment methods— Most carriers accept paper checks, while some allow bank drafts (but/only/if you’re paying monthly), and some allow you to use a credit card only on your first premium payment. Plus, certain forms of payment may not be available in all states.