Life insurance isn’t something most people like to think about. But, it can be an important way to protect your family if you’re not there to provide for them anymore.
Term life is the simplest (and often cheapest) form of life insurance policy, and there are no investments or cash value to manage. A term life insurance policy covers you for a set number of years, generally between 10 and 30 years. If you die within that period, your family will receive a death benefit — a set amount chosen when you buy the policy. If you live beyond that period, your policy lapses and has no value.
While a term life insurance policy won’t help you build an inheritance for children or leave a financial legacy, it can help you protect those you love from the sudden loss of your income during the years they need you most. For example, this can be when you have young children or are working towards big goals like paying for college tuition or paying off a mortgage.
A term life insurance policy can be an easy and affordable way to make sure those you love are covered financially in case of the unexpected. And, we’ve made it easy to choose a term policy that fits your needs. CNBC Select has rated the top term life insurance companies based on customer satisfaction, market share, and financial strength. (Read more about our methodology below.)
Guardian Life Insurance
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Cost
The best way to estimate your costs is to request a quote
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App available
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Policy highlights
Guardian offers a variety of policies, including term, whole and universal. Guardian offers term policies that can be converted into whole or universal life policies.
- A++ AM Best financial strength rating
- Ranks slightly below other top picks for customer satisfaction
- Policies must be purchased through a financial professional
Guardian takes the top ranking as best overall for term life insurance because of its top-notch financial strength and flexible policies. One standout feature is Guardian’s option to convert a level term life insurance at any point in the first five years to a permanent life insurance policy without a new medical exam if your circumstances change. An additional rider is available to allow you to convert a level-term policy to a permanent life insurance policy at any point while the policy is in force.
Northwestern Mutual Life Insurance
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Cost
The best way to estimate your costs is to request a quote
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App available
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Policy highlights
As the largest life insurer by market share in the U.S., Northwestern Mutual is an established choice with a proven record. And, it offers a number of types of policies across the country.
- Variety of life insurance products available
- Highly rated for customer satisfaction
- Policies must be purchased through a financial professional
Northwestern Mutual has strong ratings for financial strength and customer satisfaction, though its term life insurance policies are only available through financial advisors. It could be a good choice for someone who wants the financial backing of a longstanding insurer.
State Farm Life Insurance
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Cost
The best way to estimate your costs is to request a quote
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App available
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Policy highlights
State Farm offers a variety of term, whole, and universal life insurance products to choose from, alongside other types of insurance. It’s rated highly for both financial stability and customer service.
- A++ AM Best financial strength rating
- Highest rated for customer satisfaction
- No medical exam option available
- Low coverage limit for no medical exam option
While State Farm is well-known for its homeowners and auto insurance, the company also has strong offerings for those searching for life insurance. State Farm’s life insurance earned top marks for customer satisfaction in JD Power’s life insurance customer satisfaction survey for three years straight. Plus, you may be able to get a discount for bundling different types of policies.
Haven Life Insurance
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Cost
The best way to estimate your costs is to request a quote
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App available
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Policy highlights
Haven Life offers coverage issued by MassMutual, a company rated highly for its customer satisfaction and financial security. It offers term insurance both with and without a medical exam.
- Offers two options for term life insurance
- Haven Simple doesn’t require a medical exam
- Haven Simple life insurance policy limited to those under age 55.
- Not all policies are available in all states.
Haven Life specializes in term life insurance policies and is a strong option for those wanting to skip the life insurance medical exam. This company, backed by MassMutual, allows some life insurance shoppers to complete the process of applying for and buying a policy entirely online with an easy-to-navigate experience. Its simplicity paired with its financial strength makes it a strong contender for anyone searching for term life insurance.
There are a few ways to determine how much term life insurance you need. One common rule of thumb is to multiply your salary by 10. So, a person earning $65,000 per year would need about $650,000 worth of term life insurance.
The younger you are, the more affordable your term life insurance will be. According to Guardian, the average rate for a 35-year-old male buying a 20-year, $500,000 term life insurance policy is $30.42 per month. The average cost for the same person at age 45 is $60.99 per month.
While term life insurance is affordable, it generally isn’t created with the goal of passing wealth to the next generation like a permanent life insurance policy. If you outlive the term, your term policy doesn’t have any value. With permanent life insurance, you can build wealth to pass on to heirs or leave a financial legacy. Another disadvantage is that term policies don’t build cash value that you can use while you’re alive.
If you outlive your term life insurance policy, the policy simply expires and no benefits will be paid out.
Term life is generally the cheapest type of life insurance, costing less than permanent life insurance policies like whole life insurance and universal life insurance. Whole life insurance, for example, is between five and 15 times term life insurance’s cost.