Term life insurance is a great option for providing substantial insurance coverage, but only for a short time. Nearly all major life insurance companies sell term life policies to offer greater protection in specific circumstances. Young families with children may find term attractive because of the low cost and the large death benefit that the beneficiaries receive in the event of an emergency.
Term insurance provides a fixed amount of life insurance protection over a specified period. This type of insurance does not have a savings component as permanent policies. The coverage provided by a term policy will expire at the end. Term insurance is intended for young people in good health who require a lot of coverage to care for their loved ones. As the insured reaches older years, term insurance can become prohibitive.
The best term life insurance companies
One person might not find the best term life insurance company, and different companies offer different services to different demographics. Some companies target military personnel, others focus on those with specific health conditions like diabetes or other respiratory diseases. Here are five of the most well-known and established life insurance companies that offer public term policies.
| Company | 2020 J.D. 2020 J.D. | AM Best | S&P |
|---|---|---|---|
| Northwestern Mutual | 790 | A++ | AA+ |
| State Farm | 838 | A | AA |
| Mutual of Omaha | 789 | A+ | AA- |
| Principal Financial | 772 | A+ | AA- |
| USAA | N/A | A++ | AA+ |
Standard & Poor’s and AM Best rate each carrier’s financial strength. The J.D. The J.D. Power Ranking is a score that reflects customer feedback and rates the company’s customer services.
Northwestern Mutual
The life insurance company has been serving American consumers for more than 150 years. This may explain the high J.D. Its high customer satisfaction ratings reflect its deep understanding of families’ financial protection requirements. Its term policies let you choose the coverage period that suits you best. You can either select a fixed amount of years or a certain age. All these plans can be converted to whole-life insurance if necessary. This means that your policy can adapt as your needs change.
State Farm
State Farm has many products for term insurance. However, the return premium policy from State Farm is unique. It allows policyholders to choose between a 20 or 30-year payment term, and they can get their premiums back if the term ends. The return of premium policy is available for renewal annually up to the age of 95. This policy will cover most insureds throughout their lives. While the return of premium option is more expensive, it also increases cash value. Although cash value is not usually included in term life insurance policies but can be used in emergency situations where money must be borrowed against your account, it may be useful.
Mutual of Omaha
The life insurance company is known for its many additional riders that can be added on to term life policies. You should note that not all riders are compatible with every policy. To find out how much coverage you require and what riders you can add to your policy, consult an agent.
Principal Financial
Principal Financial offers term insurance policies that can be converted to whole-life policies at any time. The policyholders can choose the term length that suits their needs, whether they need coverage for one year or for longer periods of 10, 15, 20, 20 or 30 years. You may be eligible for permanent coverage if you decide to convert your policy. Principal Financial offers a full range of cash value policies including whole life, universal and variable life.
USAA
USAA is available only to veterans, military personnel, and their immediate families. However, it offers life insurance policies that are worth considering for those who meet the criteria. Standard life insurance policies don’t pay a death benefit for an insured who dies as a result of an act or war. USAA, which provides coverage for service personnel while deployed, is an exception to this rule. This coverage can be added to the existing group term life insurance available through the government for military personnel. USAA policies offer additional $100,000 in benefits to service members who are married or have children. All of the children of service members can be added to the policy at a cost of $8 per month.
How to choose the right term life insurance company
When shopping for quality term life insurance, there are many things to take into consideration. These considerations are important to consider when choosing the right provider for you. Your life insurance policy will ultimately provide the coverage you desire for your family. You might also consider the following:
- Providers’ financial strength — to offer a certain amount of claim payouts
- Multiple quotes — to compare the price and benefits of similar coverages and terms
- To better understand why term life insurance is right for you, it’s important to assess your circumstances. You should ask yourself if it is temporary protection that you can afford or if the term lengths are appropriate for your current situation, such as leaving protection for your kids.
Life insurance is a significant investment in the future of your loved ones. Take time to research your options and carefully consider your provider. You can find information on how to reach an agent from many insurers’ websites.
Most Frequently Asked Questions
What is the difference between whole-life and term insurance?
Term insurance provides protection that is pure in death benefits for a set period of time. For example, 20 years. The coverage ends when the term ends. Whole life insurance is a type of permanent insurance where cash value accumulates within a tax-deferred savings section that is attached to each policy. Whole-life insurance is meant to be in place for as long as premiums have been paid.
What are the factors that affect my life insurance premiums?
The price of your term insurance will depend on several factors, including your age, weight, health, and occupation. Another factor is the amount of coverage you desire. To determine your premiums, insurance companies consider many aspects of your life. As a result of health risks, premiums are usually higher for those who smoke. The premiums are generally lower if you’re younger and more healthy.
What is better: permanent or term insurance?
This question is not easy to answer. Term insurance can often provide a higher death benefit than permanent policy and at a lower cost. If you are certain that you will need life insurance to cover your estate taxes at the end, then a permanent policy might be the best option. All depends on your financial situation and your goals. For more information about term vs. full life, consult your financial advisor or agent of life insurance to determine which option is best for you.