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 family, we’ve completed extensive research into 23 top 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 rely on information collected as part of the grading process described in this article, but selections and order of providers are based on subjective insights from our writers and industry experts.
To provide the best information to consumers looking for life insurance, we designed a comprehensive ranking methodology to rate each company across five categories and assigned them each a numeric score based on criteria we created for each category.
By coming up with a numeric score, we were able to develop a standardized, data-driven model for comparison across companies and life insurance policies. Each data point is rated on a five-point scale and then weighted based on importance.
To compare companies, the categories we evaluated were:
- Customer Service
- Diversity of Product Lines
- Claims Experience and Complaints
- Stability and Reliability
We looked at more than 50 data points to build five-point scales for each major section. Some data points didn’t have a five-point scale and were instead rated based on a smaller scale. In cases such as this, companies were automatically awarded a minimum number of points. For example, if there were only two options, every company got a minimum of four points with companies exceeding the standard receiving a five.
This entire section accounts for 34% of the total weighted score in our evaluation.
To evaluate each company’s customer service, we reviewed the following factors:
- Third-party ratings
- Application process and method of sale
- Online tools
Third-party ratings are not a fool-proof method for evaluating companies. Some entities require companies to pay in order to be included in their evaluations, so they are not necessarily rankings of the best companies available. However, they can still be useful in identifying standouts in the industry. For customer service, we looked at J.D. Power’s Interaction and Communication rankings to come up with a numeric score:
|J.D. Power Ranking||Numeric Score|
|Excellent-Among the Best||5|
|Great-Better Than Average||4|
Application Process and Method of Sale
We also evaluated each company on its application process and method of sale. We looked at whether companies were completely self-service, meaning they operate strictly online with no personalized assistance, or if they offered more comprehensive services.
Insurers who had additional services, such as financial advisors or brokers who could help you compare products or provide personalized guidance, received higher scores than online-only companies.
|Method of Sale||Numeric Score|
|Excellent (Financial advisors and brokers)||5|
|Great (Local broker or agent)||4|
|Fair (Website and call center or chat)||2|
|Poor (online quote and self-serve)||1|
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. We also looked at what kind of account management tools are available to policyholders.
Here are the features we looked for; each feature was assigned points:
- Can you get an online quote?
- Is there a life insurance estimator tool?
- Can you search for a lost life insurance policy?
- Is there online account management?
- Is there more than one way to make a claim?
- Does the insurer have forms online?
- Does the insurer have an FAQ?
- Are there blogs, videos, or live chat?
- Are there comparison tables to help you see the differences between policies?
We scored websites with the following scale:
|Online Tools||Numeric Score|
|Excellent (Website with client portal, FAQ, tools, and resources)||5|
|Great (Website with client portal for services)||4|
|Good (Website with online quote tools)||3|
|Fair (Website with FAQ and useful information)||2|
|Poor (Website with little information)||1|
Diversity of Products
This section accounts for 32% of our total weighted total score.
We researched the different companies and looked at what kinds of products they offered. The main elements we looked for were:
- Coverage options
- Available riders
- Additional product lines
- Available discounts
We looked at what types of life insurance were available and how many plan options were offered by each company. Companies with the most options scored the highest.
- Terms with more than three-term options: Term life policies may have a term of 10, 15, 20, or even 25 years.
- Number of policy types with options: Some companies offer multiple policy types, such as both term and whole life, and multiple term lengths and coverage amounts.
- Term with conversion: Some insurers will allow you to convert your term life insurance policy into a whole life policy later on without going through an additional underwriting process.
- Level premium term: With a level premium term, your premiums stay the same for the duration of your term, rather than increasing with age.
- Guaranteed issue: Guaranteed issue policies do not require a medical exam.
- Whole life: A whole life insurance policy provides insurance for your entire lifespan.
- Index universal life: Index universal life is a universal life insurance policy that has a higher level of risk involved because it is dependent on market fluctuations.
- Survivorship life: With survivorship life, the policy covers two people, but only pays a benefit when the second insured person passes away.
- Final expense: More affordable than other forms of life insurance, final expense policies are intended to cover burial expenses.
|Coverage Options||Numeric Score|
|Excellent (Five or more policy types)||5|
|Great (Two to four policy types)||4|
|Good (One policy type)||3|
Because most companies have an average of two to four types of policies, that became the middle score. Every company started with a minimum of three points rather than one in this metric.
An insurance rider is an amendment to an existing insurance contract. You can use a rider to add additional coverage or expand the scope of existing coverage.
With life insurance, you may be able to use riders to add family members to your coverage or get additional coverage if you’re disabled or become unemployed. Not all insurance companies offer riders, so knowing which companies allow you to use them can help you make an informed decision.
Here are some sample riders you may add to your life insurance policy:
- Spouse, family, or child benefit add-ons: Rather than having to buy a separate policy, a spousal, family, or child rider allows you to add your loved one to your existing policy.
- Disability waiver of premium options: If you become disabled, the rider will cover your premiums.
- Accident benefit add-on: If you are seriously injured or become critically ill, this rider will give you access to cash.
- Additional riders: Other potential riders include unemployment riders and conversion riders.
Having certain riders gave a company an extra point. Riders accounted for a total of 4% of our overall weighting in this category.
|Rider Options||Numeric Score|
|Excellent (Four or more riders)||5|
|Great (Two to three riders)||4|
|Good (Less than two riders)||3|
Because most companies have an average of two or three riders, that became the middle score. Every company started with a minimum of three points rather than one in this metric.
Additional Product Lines
You likely want an insurance company that you can count on for a range of products, rather than having to use multiple companies for your various insurance needs. We evaluated each company to see what other insurance products, if any, they offered, such as:
- Home or auto
- Critical illness or living benefit
- Chronic care and living benefits
|Additional Product Lines||Numeric Score|
|Additional product lines offered||5|
|No additional product lines offered||4|
Companies were judged on either having additional product lines (regardless of how many) versus having none. Every company received a minimum of four points on this metric.
Some companies offer valuable discounts that can make life insurance more affordable, which can be an attractive feature. In our research, we looked at the following information:
- Companies that used smart technology in premium reductions
- Money-back return of premium if the insured outlives the life insurance term
- Policies that offer you the option of receiving dividends
|No discounts offered||4|
Companies were judged on either having discounts or not. Every company received a minimum of four points on this metric.
Claims Experience and Complaints
This section accounts for a total of 20% of our weighted score, all of which was centered around complaints.
The insurance industry is intensely regulated. The National Association of Insurance Commissioners (NAIC) is a regulatory support organization that maintains a database of complaints filed against insurance companies. The registry includes the number of complaints, as well as the number of complaints that would be typical for a company to receive based on its size and industry.
The NAIC publishes companies’ complaint ratios, meaning the number of complaints it has received adjusted for its market share. Some examples of complaints are delays of benefits, claim handling, or denials of claims.
Scores below the 1.0 NAIC complaint ratio received a higher score, while scores above the 1.0 ratio received a lower score.
|NAIC Complaint Ratio||Numeric Score|
|Great (0.50 to 0.75)||4|
|Good (0.75 to 1.0)||3|
|Fair (1.0 to 1.5)||2|
|Poor (> 1.5)||1|
Stability and Reliability
This section counts for 5% of our total weighted score.
When you hand over your hard-earned money to an insurance company, you want to have the confidence that the insurer will pay out the promised benefits, if necessary. When researching each company, we focused on the following information:
- Third-party ratings from J.D. Power
- Financial Strength Rating from AM Best
- The number of states the company is licensed in
- Years in business
- Maximum coverage for death benefits
J.D. Power Rating
J.D. Power is a leading consumer insights and analytics company. Each year, it releases its U.S. Life Insurance Study, which ranks the overall customer satisfaction of top life insurance companies. The study is based on over 6,000 customers’ responses and is focused on the companies’ performance in six areas:
- Product Offerings
- Application and Orientation
We assigned each company a score based on its J.D. Power ranking:
|J.D. Power Rating||Numeric Score|
|Excellent-Among the Best||5|
|Great-Better Than Most||4|
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 the insurers’ abilities to meet their policy and contract obligations—with its Financial Strength Ratings.
AM Best uses the following scale to rate insurance companies:
|Rating Category||Rating Symbol||Rating Notches||What it means|
|Superior||A+||A++||Assigned to companies that have, in our opinion, a superior ability to meet their ongoing insurance obligations.|
|Excellent||A||A-||Assigned to companies that have, in our opinion, an excellent ability to meet their ongoing insurance obligations.|
|Good||B+||B++||Assigned to companies that have, in our opinion, a good ability to meet their ongoing insurance obligations.|
|Fair||B||B-||Assigned to companies that have, in our opinion, 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, in our opinion, 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, in our opinion, 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, in our opinion, 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 one to five as follows:
|AM Best Financial Strength Rating||Numeric Score|
|Superior Rating (A+, A++)||5|
|Excellent (A, A-)||4|
|Good (B, B-)||3|
|Fair (C+, C++)||2|
|Poor (C, C-, D)||1|
For accessibility, we looked at the states in which the insurer is licensed to operate within the United States. While some companies are licensed to operate nationwide, others have restrictions or may only be licensed in select states. To score companies, we used a scale of one (lowest accessibility) to five (highest level of accessibility).
|Excellent/National (46 to 50 covered states)||5|
|Great/National (35 to 45 covered states)||4|
|Good/Regional (Six to 15 covered states)||3|
|Fair/Regional (Two to five covered states)||2|
|Poor (One covered state)||1|
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.
Here’s how we assigned rankings for how long an insurer has been in business, on a scale of one to five:
|Years in Business||Numeric Score|
|Excellent (51 years or more)||5|
|Great (26 years to 50 years)||4|
|Good (11 years to 25 years)||3|
|Fair (Six to 10 years)||2|
|Poor (One to five years)||1|
Maximum Coverage for Death Benefits
Your maximum coverage capacity for death benefits is how large of a policy you can get. Companies that offer lower limits—such as under $25,000—were scored much lower than companies that offer higher coverage capacities. According to the American Council of Life Insurers, the average face amount of individual life insurance policies purchased was $178,150 as of 2019.1 Since most people will want coverage of over $160,000, we scored companies that offered policies with larger coverage limits highest.
|Maximum Coverage||Numeric Score|
|Great ($300,000 to $499,999)||4|
|Good ($100,000 to $299,999)||3|
|Fair ($25,000 to $99,999)||2|
|Poor ($0 to $24,999)||1|
This section counted for 5% of our total weighted score.
When it comes to cost, we got quotes from each company for men and women in different age groups. We also compared pricing among companies to see which offered more competitive pricing in certain areas, such as offering lower term policies than other insurers.
Being nonbinary, genderqueer, agender, or bigender doesn’t disqualify you from getting life insurance, but certain health conditions that are more common among nonbinary people may result in higher insurance premiums. Every insurer assesses its applicants’ risk a bit differently, and cost can vary widely from person to person. Your rate is dependent on your age, desired coverage, health history, and overall risk profile. Read more about getting life insurance when you’re nonbinary.
When you purchase a life insurance policy, there are several different ways to pay for it:
- Upfront payment: You pay for the entire policy upfront. Some insurers offer a discount for this option.
- Yearly, quarterly, or monthly payments: You set up recurring or billed payments.
- Level premiums: Your premiums are fixed for either your entire policy term or a fixed period, rather than increasing over time.
We scored companies one to five with the following scale:
|Payment Options||Numeric Score|
|Excellent (Limited pay options, one-pay, and monthly)||5|
|Great (Two of the above)||4|
|Good (One of the above)||3|
There were a limited number of payment options a company could provide. This means every company received at least three points on this metric.
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 23 top 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 each of 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.