There are a couple of reasons why most adults put off researching life insurance options. For one thing, it can seem like an unnecessary expense when you’re a healthy twenty-something with a limited income, and truly, your risk of death is probably fairly low.
However, seeking life insurance also forces you to confront your own mortality and consider the fact that you could be gone tomorrow if the circumstances are just so. It forces you to think about the sadness and hardship your loved ones will face in your absence.
The upside, of course, is that you have the opportunity to relieve their suffering, at least in small part, by providing funding for your own end-of-life expenses, and perhaps even more. Purchasing life insurance involves planning for a future that you won’t be part of, but you’ll gain peace of mind knowing that your loved ones will be cared for, at least financially, once you’ve shuffled off this mortal coil.
Once you’ve decided that life insurance is important, the next question is when you should get it. In truth, your best bet is to get life insurance as soon as possible. The younger and healthier you are, the lower your premiums will be, and if you get a universal/whole life policy (as opposed to a term policy), you can lock in a low rate for life (supposing your payments never lapse).
All that remains is choosing a life insurance company, and this can be difficult when you realize that there are dozens of companies to sift through. This means you need to figure out an apples-to-apples system of comparison, and frankly, it can’t be based on premiums.
Life insurance premiums are only partially determined by the policy/coverage you choose. A larger part of calculating premiums has to do with you – your age, health, risk factors, lifestyle, and so on.
So before you even start to ask about pricing, there are a few other things to consider, such as a company’s ability to pay on a claim, who does the underwriting (i.e. who actually owns the policies), the option to up upgrade from term to whole life policies, guaranteed renewability (if you choose a term policy), and of course, customization options. Here are just a few of the life insurance companies you may want to consider.
Northwestern Mutual consistently performs well across categories in J.D. Power customer satisfaction surveys, and the company is customer owned. This means the company is not only more likely to work in the best interest of policyholders, but also that you are eligible to receive dividends.
Of course, they also offer term, whole, universal, and variable life policies, as well as a slew of additional products and services, including annuities, disability insurance, long-term care insurance, education funding plans, and investment and wealth management services. Mic drop.
New York Life Insurance Co.
There are several things that make New York Life a good choice when seeking life insurance coverage, not the least of which is that they offer a lot of options, including term, whole, universal, and variable life insurance policies, as well as corporate-sponsored life insurance. They also offer a joint term policy for two adults (like spouses), and other products and services, including long-term care insurance and annuities. As of 2015, they are the exclusive provider of long-term care policies offered through AARP.
In addition, New York Life is a mutual life insurance company (according to them, the oldest in the nation), which means some customers (such as those with whole life policies) are part owners of the company.
This company may be best known for their impressive rankings across a number of categories. For starters, they are highly rated in terms of financial strength (i.e. the ability to pay on claims). They also get great customer reviews, perhaps because of online tools (like the Life Wizard Insurance Calculator) and customer support designed to help consumers choose policies, or extras like the option to donate a percentage of your policy to a charity of your choice. TIAA offers term and permanent life insurance policies.
Lincoln Financial Group
As you may have guessed, this life insurance provider gets its name from the 16th POTUS, and they received permission for their name and logo (a profile of Honest Abe) from the president’s son, Robert Todd Lincoln, in 1905. This interesting bit of history probably won’t make you choose Lincoln Financial Group for your life insurance needs, but their longevity, reputation, and products might.
They offer term, universal, and variable universal policies. Also available are MoneyGuard policies, which basically pair universal life insurance with a long-term care component that allows for access to funds for the purposes of long-term care, with any remaining funds at the time of death going to beneficiaries (in addition to the actual life insurance policy).
They may be better known for home and auto insurance, but State Farm also offers term, whole, and universal life insurance policies, and in 2015 they earned the highest marks for customer satisfaction (related to life insurance policies) in a J.D. Power study.
Notably, State Farm offers a Mortgage Life policy intended to ensure that homeowners don’t leave a spouse, children, or other relatives or beneficiaries holding the bag for mortgage payments. Benefits decrease over the life of the policy (as does your mortgage), but cannot dip below 20% of the original policy, and your premiums remain the same throughout.
Guardian Life Insurance
Like New York Life Insurance Co., Guardian is a mutual insurance company (i.e. owned by its policyholders). Incredibly, it boasts annual dividend payouts every year since 1868, with a reported payout of $847 million to members in 2016. So, that’s amazing.
For nuts and bolts, they offer term, whole, universal, and variable universal life policies. They also offer annuities, disability income insurance, investments and wealth management, and workplace benefits like 401K policies.
In addition, they provide opportunities to upgrade from term to whole life policies, users can link a portion of the cash value of certain policies to the S&P 500 index, and there are options to borrow against the cash value of whole life policies.