As a rule, we at I&E strive to provide the most accurate and objective insight on the web for all things related to life insurance and estate planning. A good starting point for this lofty goal is to decide who exactly are the best life insurance companies in the USA.
This article will attempt to do just that based upon a carefully selected set of criteria AND, to go one better, we will narrow it down to our top 10 best life insurance companies list.
Interested in getting coverage with a top carrier but don’t want the hassle of an invasive exam?
Check out our Best No Exam Cash Value Life Insurance Companies article for great cash value life insurance policies that don’t require life insurance blood testing.
Before we dive in, there are a few ground rules to point out.
First, this is NOT simply a list of the largest life insurance companies in the U.S. or even the most financially sound. Although that is one of our criteria.
We’re really looking for the top life insurance companies that support our mission, which is to offer consumers the best life insurance options based on each client’s unique need, whether it be to protect income, estate planning, wealth building, and anything related to these objectives.
Thus, some top rated companies may not appear in our top 10 because they aren’t, in our humble opinion, deemed attractive enough for our purposes.
I should also point out that although certain companies may be known for certain products or types of permanent life insurance, this article will attempt to find the most balanced providers among the top contenders across all types.
In this way, we are seeking to identify those companies offering the most complete set of attractive options for the consumer. This focus on balance distinguishes this article from our previous overview of the top 10 dividend paying whole life insurance companies.
For example, if one of the insurers in this overview is well known for life insurance dividends (whole life) but is a virtual stranger to indexed universal life insurance (IUL) or variable universal life insurance (VUL), this would detract from their overall ranking in this top 10 search.
“Best Boxer” Analogy: Think of this article as an attempt to rank the top 10 best boxers of all time. We’re not only looking at the grace of Sugar Ray Leonard or the power of Mike Tyson. We’re considering who possesses the best combination of attributes, such as strength, balance, grace, entertainment ability, etc., and all related to life insurance coverage.
One last point. There really is no best life insurance company. But there is a best life insurance company for you. The goal would be to align your needs and objectives with the right company that best matches your objectives.
With all of the above in mind, let’s get started by looking more closely at our criteria…
Criteria for Deciding our 10 Best Cash Value Life Insurance Companies
We’ve given some careful thought, having considering your needs and goals as expressed to us by numerous clients and colleagues, as to what makes or breaks a top life insurance company. We’ve narrowed this down into our vetted criteria which is as follows.
- Financial Size and Strength
- Range of Policy Options
- Policy Design Options
- Captive or Non-Captive
- Customer Service
One thing to note about our criteria is that we’ve omitted certain factors such as direct recognition vs non-direct recognition or “mutual vs. stock companies” because these factors are most relevant when searching for the best dividend paying whole life companies.
In this case, because we’ve broadened our search to include other types of permanent life insurance, we’ve relaxed these requirements. However, you’ll see from our list that we tend to lean heavily in favor of mutual life insurance companies because we simply believe they are the best option for consumers in most cases.
Financial Size and Strength
Because we are only considering the top rated life insurance companies in the USA, we figured that financial stability and strength should be at the top of our list of criteria. There are several ratings to choose from, including A.M. Best, Fitch Ratings, Moody’s Investors Service and Standard & Poor’s and the overall Comdex rating.
A.M. Best Credit Ratings for Life Insurance Companies
We’ll stick with A.M. Best Ratings because it is the oldest, founded in 1899, and most widely recognized credit rating agency dedicated to the insurance industry. In addition, A.M. Best ratings are more abundant, as Fitch, Moody’s and S&P provide ratings on fewer top life insurance providers.
A.M. Best ratings have 2 symbols that indicate their ratings analysis.
The first symbol is alphabetical, ranging from A++ at the top end to E at the lower end, and indicates the financial strength of the company. When calculating financial strength, A.M. Best, conducts a thorough examination of the company’s income and balance sheet strength, operating performance and business profile.
The second symbol is a roman numeral that designates the financial size of the company, ranging from I, less than 1 million, to XV, greater than 2 billion. A.M. Best arrives at this rating by examining data such as policyholder reserve funds, other investment or operating contingency funds, and miscellaneous reserves reported as liabilities on the balance sheet.
Because we’re more concerned for this review with strength verses size, we’ll focus on the first symbol. Most life insurance companies have a rating of A- (excellent) or better by A.M. Best, so we’ll be pointing to those that meet or exceed this benchmark.
Note: Companies with a rating of B or less are considered “vulnerable” by A.M. Best.
Range of Policy Options
With hundreds of life insurance companies to choose from, this category is a bit tough to nail down. Because we tend to focus on permanent life, this narrows our field because some companies cater to term life insurance.
A term insurance policy is useful in many situations and we may even suggest adding a term rider to your policy to increase its cash accumulation efficiency and provide a larger initial death benefit for your family.
However, a term policy, in and of itself, does not serve our purpose in regards to this article’s topic, the top life insurance companies for wealth building.
The next question is whether the company offers a good mix of both dividend paying whole life insurance coverage and other kinds of permanent life insurance products such as universal life. Those that do not offer one or the other didn’t make our list, even if they tend to shine in one category or another.
Again, we’re focusing on consumer friendly companies that offer the best mix of options – don’t forget our “best boxer” analogy.
And lastly, many of our clients have very busy schedules and they find it difficult to schedule and take a medical exam. Many of the companies we list offer automated accelerated underwriting in lieu of a life insurance medical exam. This is a huge benefit to our clients who have a hard time scheduling an exam or who want to avoid the medical exam altogether.
Policy Design Options
In life insurance, as in any other industry, there is competition. And the devil (or angel) is often in the details of policy design.
Although all life insurance companies are constrained by legal limits such as the MEC rules, some offer more flexibility for options such as paid up additions riders or options for chronic illness or long-term care.
This aspect of our criteria is admittedly a bit more subjective to our experience with various companies. Part of this criteria considers how innovative a select company is in its offerings.
And with hundreds of products offered by the top life insurance companies, it can be a challenge to stay up to speed on every aspect of every product and company for the benefit of our clients looking to purchase insurance, although we continue to strive to do so.
Finally, when deciding on the best insurance company and policy, we must take into account the objective of the policy. For example, is the policy designed for:
- Infinite Banking
- Long-term Care Insurance
- Single Premium
- Second to Die
- Retirement Planning
- Estate Planning
The focus of the policy will determine which top life insurance company we will want to choose, as each carrier has different strengths and weaknesses.
Captive or Non-Captive
By captive or non-captive companies, we are identifying those who market products through their own captive agencies and insurance agents versus those who allow any appointed life insurance agent to market their products alongside other companies products.
Examples of captive agencies are New York Life, Guardian and Northwestern Mutual, all of whom have made our list but may have fared better otherwise.
Non-captive companies include Minnesota Mutual and Penn Mutual, as these top insurance companies tended to fare better in our survey for this reason.
Some may deem this aspect of our criteria to be odd, or even offensive to those in captive companies. However, this is a consumer oriented overview and in our experience, consumers are best served with a range of choices and options. So, the logic goes that in captive companies, where agents are “incentivized” to push their own products above all else, this can weigh against consumer friendliness even if the products offered are exceptional.
Before the critics converge, I’ll point out our understanding that captive agents can, within limits, offer products outside of their own companies.
However, in our experience, this rarely includes alternative permanent life insurance plans and mostly involves exploring other companies for cheap term insurance options.
Certain companies tend to stand out with consumers and this is as complicated as this part of our criteria gets. Our research on this issue involved reviewing the J.D. Power Ratings Life Insurance Study for many of the companies that overlapped our list AND scouring other web based surveys and reports about those companies with the highest customer satisfaction.
Having carefully considered all of the above criteria, we’ve complied our list of the top 10 best life insurance companies as follows.
Top 10 Best Cash Value Life Insurance Companies
Penn Mutual Life Insurance Company is an A+ rated (superior) mutual insurance company, which is a lower rating than the A++ (superior) rating of many of the contenders. However, this rating is still superior and demonstrates the insurers strong financial stability. Further, Penn Mutual makes up for this single deficit in a number of ways.
First, Penn Mutual’s dividend paying whole life product is one of the front runners in the industry. This whole life product has a robust history of dividend payments and more flexibility in design options , such as paid up additions, than many other companies. The policy builds early high cash value only rivaled by Penn Mutual’s IUL policy.
Penn Mutual offers guaranteed universal life and variable universal life products AND recently introduced a formidable indexed universal life product with an accumulation rider.
And if you need term, a term life insurance policy from Penn Mutual offers a conversion option to one of its exceptional permanent policies.
So, Penn Mutual is covering the spectrum with an exceptional array of choices for consumers. Penn Mutual’s customer service record is solid from our experience and everything we could find.
When we holistically factored in all 5 of our carefully considered criteria, MassMutual stands out from the crowd for a few reasons.
First, Mass Mutual is among the top rated life insurance companies in the nation with an A++ A.M. Best rating. This superior financial rating by Mass Mutual gave them an edge over the next closest competitors on our list. Mass Mutual not only offers a stellar dividend paying whole life policy that builds cash value, but also offers alternative coverage with its guaranteed universal life, variable universal life, AND a solid convertible term life insurance policy.
One weakness of Mass Mutual is what appears to be a lack of creativity in design, as the majority of their policy options are relatively straightforward.
Still, MassMutual keeps it simple and delivers a wide array of choices with solid backing. They also deliver great customer service in our experience.
Finally, MassMutual is a mutual insurance company that allows non-captive agents to offer its products, along with products from competitors.
Minnesota Life Insurance Company is a subsidiary of Securian Financial Group, Inc., and is currently offering an array of attractive policy options for consumers. With an A.M. Best rating of A+ (superior), this company meets our criteria for financial strength.
In additional, Minnesota Life is currently offering both an attractive whole life accumulator policy and an exceptional indexed universal life policy, both of which offer flexibility to accommodate the kinds of wealth building and estate planning objectives that we value. Minnesota Mutual’s customer service is excellent and they are a non-captive company, both of which add to their overall ranking.
Foresters Life Insurance and Annuity Company is a subsidiary of Foresters Financial, both of which are rated A (excellent) by A.M. Best. Foresters is arguably the least known life insurance company on our list and yet commanded our attention for a few reasons.
First, Foresters has a very strong whole life product for wealth building AND also offers a “no exam” option which is a very consumer friendly approach. What you get is a top of the line limited pay life insurance policy, without the aggravation of a medical exam.
Second, Foresters has an exceptional IUL product that is reportedly very favorable for wealth building and using life insurance policy loans for working capital which is useful for business owners and real estate investors.
So, Foresters gets high marks for both a range of policy options AND exceptional policy design options. Foresters is non-captive and easy for agents to work with, which in our experience means that customers are given options. When you combine this with other notable company and policy options, they get high marks.
Finally, we’ve heard nothing negative about Foresters’ customer service, thus placing them high in our rankings.
Transamerica Life is a solid life insurer with a good set of policy options and designs. With an A+ A.M. Best rating and a structure that is essentially non-captive, this company offers a nice set of options for consumers. Although the company culture is somewhat unique, in utilizing a kind of multilevel approach to the agent offices, agents only need to be appointed to offer their products.
Transamerica caters to all kinds of strategies including wealth building through whole life, universal life and variable life insurance policies. They did suffer a bit on the J.D. Power customer satisfaction survey. However, this factor was offset by their product choices and options and the fact that they are a non-captive company that is easy to work with.
Guardian Life is an A.M. Best rating (superior) and is arguably one of the strongest life insurance companies in the U.S. If it were not for the fact that they are a captive company, they may have ranked higher on our list. As with our other captive companies to follow, their agents can only offer their products. We believe that this can be prejudicial to consumers by limiting options.
However, with that concern noted, Guardian does offer an impressive range of policy options, from a solid wealth building whole life product to various universal life options including indexed universal life.
Guardian Life also offers some great whole life policy design options for low cost paid up additions.
Finally, Guardian is owned by its policyholders and has a very good customer service reputation, as supported by the J.D. Power survey, and thus earned a solid spot on our list.
Ohio National has an A+ A.M. Best rating and is a non-captive company that has earned significant attention over the years for its whole life products.
Recently, they’ve become less prolific in the whole life scene as other companies, higher on our list, have offered more flexibility or policy options.
However, Ohio National makes our list because along with their exceptional whole life products, they offer a number of universal life and variable life product options.
Also, they are easy to work with and non-captive which gives consumers access through independent brokers who can do side by side comparisons to other products.
New York Life is arguably the largest life insurance company in the U.S. and the largest mutual insurance company. New York Life is a recipient of the top A.M. Best rating A++ (superior) and has a perfect Comdex ranking of 100 out of 100. Similar to some of our other choices, this is a captive company that was built on whole life insurance but has expanded into offering a range of other products.
New York Life is known for offering a solid whole life insurance product; however, we found that they are also striving to offer solid universal life policies complete with a number of life insurance riders such as “no lapse” and “living benefits”. The presentation and options available for universal life insurance products edged New York Life slightly ahead of the next closest contender to follow.
Currently the top rated life insurance provider, Northwestern Mutual has an A++ (superior) A.M. Best rating and a perfect Comdex ranking of 100, demonstrating the Company’s top level financial stability. But a few factors bumped them down the list in our estimation when it comes to consumer friendliness.
First, Northwestern Mutual is also a captive company and tends to guard their products more closely than other companies. This means that not only can independent brokers not offer their products, but also that their agents are committed to marketing their own permanent life products because they believe they are the best, period.
Second, Northwestern Mutual heavily emphasizes whole life products and their universal life offerings are not heavily promoted or emphasized in their marketing. Northwestern mutual’s strict whole life emphasis has garnered some criticism over the years.
Still, Northwestern Mutual’s customer service and satisfaction rank very highly, and their product mix and design options are solid and thus they made the cut in our top 10 life insurance companies list.
At the risk of inspiring concern due the recently tarnished reputation of AIG, allow me to first point out AIG Life Insurance was never under scrutiny. A.M. Best recently reaffirmed AIG’s life insurance issuer, American General, with an A rating (excellent), having concluded that they maintain adequate leadership experience, liquidity and flexibility. As such, they’ve made our list for a few reasons.
As our other contenders, AIG is a top life insurance company that offers a solid array of consumer friendly products spanning whole life, universal and variable life. They offer a guaranteed whole life product for people 50 -85 years old, who cannot be turned down as well as an impressive set of universal life and variable life options. AIG is also a non-captive company although their customer service reputation was lower on the J.D. Power life insurance survey.
There you have it,…
…our top 10 list for consumer friendly life insurance companies who support our deepest values of promoting sound estate planning and wealth building strategies. You can run some sample whole life insurance quotes to get an idea what your life insurance rate might be. Alternatively, if you are interested in seeing what one of these policies can do for you, we would be happy to run different illustrations for you.
Best Life Insurance Companies Snapshot
|Company||Products Offered||A.M. Best Rating||S&P Rating||Moody's Rating||Fitch Rating||Comdex Ranking|
|Penn Mutual||Convertible Term Life|
Indexed Universal Life
Variable Universal Life
Guaranteed Universal Life
Variable Universal Life
|Minnesota Life||Convertible Term Life|
Indexed Universal Life
|Foresters Financial||Convertible Term Life|
Indexed Universal Life
|Transamerica||Convertible Term Life|
Indexed Universal Life
Variable Universal Life
|Guardian||Convertible Term Life|
Indexed Universal Life
|Ohio National||Convertible Term Life|
Indexed Universal Life
Variable Universal Life
|New York Life||Convertible Term Life|
Variable Universal Life
|Northwestern Mutual||Convertible Term Life|
Variable Universal Life
|AIG American General||Convertible Term Life|
Indexed Universal Life
Variable Universal Life
Although they didn’t make our Top 10, Pacific Life, Prudential Life Insurance Company and Voya Financial offer exceptional IUL products, perhaps some of the best in the industry with numerous rider options to enhance your strategy depending upon your life circumstances.
The issue we had in declining to rank them is they offer no traditional whole life insurance options and thus didn’t pass our chosen criteria.
Still, if you’re committed to pursuing a solid IUL product, these 3 companies should be considered with the winner depending upon your life circumstances, such as your age and goals.
The Largest Life Insurance Companies
So how does our list stack up to the largest life insurance companies in terms of premiums written? As you can see in the following chart, many of the top writers of life insurance premiums are also in our best life insurance companies list.
But an important point we would like to make is just because a company has a large percentage of the market does not mean that company is necessarily the “best” company. We laid out our criteria above. And if you are looking for the best life insurance for wealth building and legacy creating, don’t just choose a company because it is the biggest or largest in the marketplace.
|Rank||Company||% Market Share|
|2||Prudential Financial Inc.||7.3%|
|3||New York Life Insurance Group||4.9%|
|4||Principal Financial Group Inc.||4.5%|
|5||Massachusetts Mutual Life Insurance Co.||3.8%|
|6||American International Group||3.6%|
|7||Jackson National Life Group||3.5%|
|10||Lincoln National Corp.||3.1%|
The Best Life Insurance Policy
There are two main types of life insurance: term life and permanent life.
Term Life lasts for a specific period of time, the term. If you die during the term, the insurer will pay a lump sum death benefit to your designated beneficiary. The policy does not build cash value and if you don’t die during the term, the policy ends and you do not get any money back unless you chose a return of premium rider.
You have two primary options with term life. You can choose to convert the policy or renew it. If you decide to convert the term life policy, you need to do it by a set date or specific age (generally age 70, although it varies from company to company). Conversion allows you to convert all, or a portion, of your face amount to a permanent policy. Check with the carrier in advance because some life insurers limit your options.
If you choose to renew the term policy, you will renew annually. Your cost of insurance will increase each year as you get older. Eventually, you will be priced out of the policy, if you don’t die first.
Permanent life insurance policies include Universal Life (UL) and Whole Life. In the past, whole life was the main permanent coverage offered, but Universal Life has become the favored choice among many.
Permanent life is also called cash value life insurance. It builds tax deferred cash value, pays a tax free death benefit, and allows tax free policy loans. Cash value life insurance is one of the most important assets you can own.
Universal Life provides flexible premium payments, based on policy minimums, so you can make more, or less, premium payments. You can also change the face amount of the policy up or down, if needed. Finally, UL policies provide a guaranteed rate in the fixed account, which may be higher based on a decalred rate by the company.
UL policies include Guaranteed Universal Life (GUL), Indexed Universal Life (IUL) and Variable Universal Life (VUL).
GULs provide lifetime coverage with specific guarantees that guarantee the death benefit as long as minimum premium payments are made.
IULs offer similar benefits but with potential to earn higher crediting rates based on the performance of an index that tracks the performance of the stock market, such as the S&P 500. But unlike VULs, IULs are not a direct investment in the market.
VULs allow you to put your premiums into variable sub-accounts, which invest directly in the market, similar to mutual funds.
Whole life is similar to GULs in that it has a guaranteed return and guaranteed death benefit. Whole life also provides guaranteed cash value accumulation.
There is also participating vs non-participating whole life. Participating whole life pays dividends, which can be used to purchase additional paid-up insurance, take out the cash, leave with the carrier to earn taxable interest, or pay premiums for a period of time.
Term Life vs Whole Life
Term life insurance is heralded as the answer for just about anyone but the uber rich. If you did a search on term life vs whole life insurance, the majority of the articles would have a positive bent towards term and a negative bent towards whole. And you have to live under a rock to not have heard the phrase, buy term and invest the rest.
But as usual, the truth is not so simple. We have numerous articles written on the benefits of the different permanent coverage available. And each policy can be crafted to meet your needs and objectives, including adding life insurance riders.
You can check out our whole life insurance rates by age chart here for more.
Life Insurance Riders
There are many different riders you can add to your policy to increase its efficiency and protection. The following are just a few of them.
Accelerated Death Benefit: Typically, the ADB rider is included in your policy. If you are diagnosed with a qualifying terminal illness, you can access your death benefit for cash while you are still alive. Some companies also offer a chronic illness ADB rider.
Guaranteed Insurability Option: The GIO rider is a must if you are considering life insurance for children or young adults. The rider allows the purchase of additional insurance coverage with no evidence of insurability at specific ages or special occasions, up to age 46.
Waiver of Premium: A particularly effective rider for business owners under the age of 60, the WoP rider kicks in if you are disabled, waiving all premiums due on your policy for the entire duration of the coverage, or until you are no longer disabled.
Paid-Up Additions Rider: The PUAR allows you to make premium payments in addition to your base premiums to increase your face amount and accumulate more cash value.
Term Rider: Due to the higher initial cost of permanent policies, you can supplement your coverage with a term rider to increase your death benefit coverage until your cash value has a chance to catch up.
Long-Term Care rider: Helps pay for long term care costs by allowing you access to the death benefit after an elimination period (normally 90 days or more).
Chronic-Illness rider: Similar to the long-term care rider, the chronic illness rider allows you to access your death benefit if you are diagnosed chronically ill. Typically, that requires that you are unable to perform 2 of 6 activities of daily living.
There are a lot of top 10 best life insurance companies list out there. Very few actually have taken the time to list the criteria for why. And even fewer, if any, are focused on long-term wealth building and legacy creation.
If you are looking to gain financial independence, build wealth and create a legacy, we believe the companies in our list are the right ones to do just that.
Interested in learning more? Please give us a call or fill out our questionnaire. We are in the business of helping people achieve their financial dreams.