If you're looking for a starter life insurance policy, term life insurance may be your most affordable option. While term life insurance lacks the guarantees and cash value benefits of whole life insurance, it's an affordable way to protect your family in the event of your untimely death in your prime earning years.
Because term life insurance is temporary, the standards by which a good term life insurance policy is measured are different from other categories of the best life insurance. While we looked at eligibility requirements and premium rates, we also looked at policies on conversions as well as companies that cover specific groups of people, such as military personnel and low-income parents.
Why You Should Trust Business Insider
We choose our picks for the best term life products best on a company's customer satisfaction points, company offerings, financial stability ratings, and affordability.
- Customer satisfaction: We use JD Power's life insurance customer satisfaction survey to assess a company's customer service practices. Life insurance companies with ratings of more than 774 out of 1000 are considered above the industry standard.
- Company offerings: We compare each company's offerings. These include but are not limited to riders, policy flexibility, no medical exam options, and instant approvals.
- Financial stability ratings: We use AM Best, an industry-leading credit rating agency, to assess an insurance company's financial health. A company with an A++ to B+ is stable and likely to be around for years. On the other hand, anything lower than a B means a company is unstable or unable to meet its financial obligations.
- Affordability: According to our article on average life insurance rates, a reasonable monthly premium is on par with or below the average cost of life insurance, which is between $40 to $55 a month.
Check out the details of Business Insider's life insurance rating methodology.
Best Term Life Insurance Summary
- Best overall: Banner Life Insurance
- Best for affordability: Protective Life Insurance
- Best no medical exam: Brighthouse Financial Life Insurance
- Best for customer service: State Farm Life Insurance
- Best for whole life conversions: Pacific Life Insurance
- Best for seniors: Prudential Life Insurance
- Best for foreign nationals: Transamerica Life Insurance
- Best for military personnel: USAA Life Insurance
- Best for low-income parents: MassMutual Life Insurance
Best Term Life Insurance Overall
Banner Life Insurance OpTerm policy has affordable life insurance rates for all ages and approved health classifications. Unfortunately, shoppers with a history of severe health complications, including HIV, cancer, etc., do not qualify for Legal & General Life Insurance policies.
Shoppers ages 20 to 75 years old may be eligible for coverage with no maximum and up to 40 years of coverage. You can also expect fast approval and may qualify for a medical exam waiver with the Legal & General OpTerm plan.
Best Term Life Insurance for Affordability
Protective Life Insurance's Class Choice Term plan has some of the most affordable rates for the best value in the life insurance market. The average life insurance cost for 35-year-old males and females (with a standard 20-year term length and a life insurance benefit of $1,000,000) is about $52 and $43 monthly, respectively.
At Protective Life Insurance, the same life insurance policy for a male applicant would cost $46.63 monthly. A policy for a female applicant quotes at $38.44 monthly. Both of these rates are below the industry average. So while you can find cheaper, you get the most out of your buck with Protective.
Protective's Classic Choice Term is excellent for its customizability and range of options. This plan offers $100,000 to $50 million in coverage, some of the highest life insurance benefits in the market. Additionally, you have several term options ranging from 10 to 40 years.
You may fancy Protective's a la carte of riders, including its child and disability riders. Protective also offers an income provider option endorsement, which allows you to decide how to allocate your death benefit among your beneficiaries.
Best Term Life Insurance for No Medical Exam
Brighthouse Financial's SimplySelect term offers best-in-class coverage even without undergoing a physical exam. The company also received an A rating from AM Best and a 739 rating with JD Power, according to its 2023 life insurance study.
This policy allows instant approval with some of the most affordable life insurance rates. You can get anywhere from $100,000 to $3 million in coverage with term lengths of 10, 20, or 30 years. However, higher policy limits may be subject to stricter underwriting. Also, its convertible and renewable rider options allow you to extend your coverage or convert your policy to a whole life insurance plan. See our guide to the best no medical exam insurance companies for more options to compare.
If your health isn't at its best, you might lean towards no medical exam life insurance, though your health status won't be ignored. No medical exam policies still ask health questions, and the company can look at past medical records. So these policies are more frequently issued with lower death benefits to young, healthy applicants. Of course, when you're working with a company like Brighthouse Financial Life Insurance, life insurance agents can run a preliminary application to see your chances of success. If you don't qualify for a no medical exam policy, Brighthouse Financial agents can quote other term or whole life options to fit your needs.
Best Term Life Insurance for Customer Service
Reliability and trustworthiness are imperative for a long-standing insurance company, and it doesn't get any better than State Farm Life Insurance. Included among our guides on the best life insurance and the best cheap life insurance, State Farm's life insurance earned an A++ for financial stability with AMs Best. It also received 843 out of 1,000 in 2023 for overall customer satisfaction with JD Power, landing it in the first spot for customer service among its industry competitors.
State Farm sells property and casualty products, including home, renters, and auto insurance. So, you can pair your life insurance with another insurance product to reduce your premium.
Best Term Life Insurance for Whole Life Conversions
A conversion from term to whole life insurance allows you to extend your coverage and take advantage of those coveted cash-value benefits. Pacific Elite Term offers some of the best options if you're planning on purchasing a whole, universal, or variable life insurance plan eventually. With this term life plan, you can convert after the first ten years of term coverage. This policy also adds cash credit to your permanent life insurance policy after conversion, which may reduce the overall cost of your premium.
Keep in mind a term to whole life conversion is not guaranteed. Your insurance agent can advise when to submit an application to convert. Once you do, underwriting will assess your health and risk at the time of application (not when you originally applied for your term policy). Insurance companies will also set rates based on your current application.
With competitive rates and availability in all 50 states, Pacific Life Insurance may be your pick of the litter for policy convertibility. Additionally, Pacific Life has outstanding customer satisfaction and financial strength scores, ranking sixth place with JD Power (above the the industry average) and A+ with AM Best. Pacific Life may also allow qualifying buyers to forgo a medical exam.
Best Term Life Insurance for Seniors
For seniors, getting life insurance at an affordable rate can be challenging. However, Prudential Life Insurance offers a Term Essential plan that is an excellent option for shoppers over 60 needing short-term coverage at a competitive price.
Prudential's Term Essential allows for higher age limits than many of its competitors. As a result, underwriters may overlook minor age-related conditions. Exclusions for terminal or costly illnesses like cancer, multiple sclerosis, and HIV may still apply. The plan provides coverage as little as $100,000 up to $1 million and term lengths of 10, 15, 20, or 30 years. Additionally, this policy offers a Living Needs Benefit rider, free of charge, with all of Prudential's term life policies. This rider gives you access to a portion of your death policy if you become terminally ill, a beneficial option for senior retirees.
Not all senior applicants will qualify for a life insurance policy with Prudential Term Essential. But options may be more flexible than it would be with competitors. See our guide to the best life insurance for seniors for more information.
Best Term Life Insurance for Foreign Nationals
Life insurance can be an invaluable tool, but it may be hard to qualify for those who don't have U.S. citizenship. As one of the oldest and largest life insurance carriers, Transamerica Life Insurance accommodates foreign nationals within the U.S. to offer the best coverage options.
Transamerica Trendsetter Super is a term life policy providing some of the most competitive rates. If you're 18 to 80-years-old, you can get coverage of as little as $25,000 up to $2 million. Qualifying applicants may also waive the medical exam requirement. We recommend talking to a licensed insurance agent if you are still determining if you qualify.
Best Term Life Insurance for Military Personnel
USAA is one of the nation's leading insurance providers, created with active military members and veterans in mind. With USAA Life Insurance, military members and veterans may appreciate the unique benefits of purchasing its Level Term V policy. This plan doesn't require a medical exam, but you may have to answer a health questionnaire online.
USAA's equivalent of a guaranteed insurability rider is its Life Event Option rider. For qualifying life events (like getting married or having a child), you can get up to $100,000 of coverage. While many insurance companies offer this add-on at an additional cost, USAA's Life Event Option rider is built into the policy without the extra fee. Also, if you're injured in the line of duty, USAA helps pay for your medical bills and even replaces your health coverage if you retire or leave the military.
The critical thing separating USAA from other life insurance companies is its options for active duty military members outside of SGLI (a group life policy tied to your service in the military), i.e., you lose it once you separate from the military). As a result, its death benefits may be lower compared to some competitors. But active duty military members, particularly if deployed, will not qualify for coverage at all with other life insurance providers.
Best Term Life Insurance for Low-Income Parents
For many families, getting life insurance isn't in the budget or may not be a financial priority. Fortunately, MassMutual Life Insurance created the LifeBridge program to assist low-income families with affordable coverage.
With MassMutual's LifeBridge program, qualifying parents and guardians get a free 10-year life insurance policy. In addition, this policy pays your designated beneficiary a $50,000 death benefit.
While MassMutual's term coverage through the LifeBridge program isn't as elaborate as some of the options on this list, this free plan will cover your dependent's educational expenses and sustain a good living if you pass away.
Get Term Life Insurance Quotes
Introduction to Term Life Insurance
Term life insurance offers temporary protection over a set amount of time, usually between 10-30 years, though you can find shorter and longer terms. Because a payout isn't guaranteed under these policies (in fact most term life insurance policies never pay out), premiums are cheaper than permanent life insurance policies.
Term life insurance policies are great if you need coverage for a specific period in your life or you have a temporary financial obligation. For example, if you're paying off a mortgage or your child's college tuition, a term life policy will ease your loved ones financial burdens if you're no longer around to pay them off.
How to Choose the Best Term Life Insurance Company
Determine Your Coverage Needs
You can't choose the best term life insurance without first understanding what you want and need out of a term life insurance policy. You should consider your goals and your financial situation — including income, debt, and dependents — before starting a serious search for term life insurance.
Along the way, you may even decide that your goals are more suited for a different type of life insurance.
Consider Financial Strength
Once you've determined that term life insurance is still right for you, you'll want to begin comparing life insurance companies. You can start by looking at a company's financial strength. You'll be working with company for years, so you'll want to make sure they're financially stable, so they're around to issue a payout if the worst happens.
You'll want to pay particular attention to assessments from the following rating agencies:
- AM Best
- Standard & Poor's
- Fitch
- Moody's Investors Service
Read Customer Reviews
Customer reviews are often your best way to gain insight into how a life insurance company operates. You'll want to pay attention to any issues with claims, policy flexibility, and how easily the company was to reach. Some companies respond to customer reviews; you'll also want to make a note of this.
For life insurance companies, the best place to find customer reviews are Trustpilot and the Better Business Bureau. However, you'll find customer testimonies across a diverse array of platforms. Even life insurance reviews on Reddit can help you gain a better understanding of a company.
You may also want to get a sense of customer reviews from third-party organizations, like JD Power and the National Association of Insurance Commissioners.
Get Term Life Quotes
Getting quotes for life insurance can be arduous, as many companies require that you fill out a lengthy health questionnaire before getting a quote. It helps to have your medical information readily available. That said, term life insurance quotes are typically easier to acquire than permanent life insurance quotes, as term life quotes are often obtainable online while most companies require that you talk to an insurance agent to get permanent life insurance quotes.
Understand Policy Features
You'll want a comprehensive understanding of any term life insurance policies you're considering. You'll need to look at any exclusions and potential riders you can add to your policy. For example, you might want to consider a return of premium rider if you think you're going to outlive your policy.
You'll also want to consider whether a company offers convertible life insurance policies and the terms and requirements associated with a term life conversion.
FAQs
Will term life insurance protect my family?
Yes, term life insurance will provide a death benefit to your family if you die within the term period.
What is the better life insurance: term or whole life?
There is no better life insurance, just a better life insurance for your needs. Whole life insurance offers more comprehensive coverage and comes with cash-value benefits. By the time the policy is paid, permanent policies are frequently cheaper for the benefit you get. That said, affordable term life insurance is more immediately available.
How much is a $1 million term life insurance policy?
To get a $1 million term life insurance policy, a 35-year-old female non-smoker will pay an average of $42.92 per month. A male 35-year-old non-smoker will pay an average of $52.01 per month.
What happens if you never use your term life insurance?
If you never use your term life insurance, it expires at the end of the coverage window. You may have the option to convert your plan to a permanent policy, depending on your provider.
What is the best amount of term life insurance?
The best amount of term life insurance is generally as much as you can comfortably afford. However, the rule of thumb for calculating your life insurance needs is to multiply your annual income by 10.
