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How to choose the best life insurance company

 


How to choose the best life insurance company

Follow these four steps to find the best life insurance company for your family.

  • Look at customer satisfaction scores: Other customers’ experiences can help you decide whether you want to do business with a company. You can get clues about an insurer’s reputation through complaints filed with state regulators, which are visible on the National Association of Insurance Commissioners' website. All of the companies listed above have had fewer complaints to state regulators than expected for insurers of their size, according to three years’ worth of data from the NAIC.
  • Consider financial strength: It’s especially important to look into life insurance companies’ financial strength because you’ll want a company that can pay claims many years down the road. NerdWallet’s insurance reviews use weighted averages of financial strength ratings. For additional information about life insurance companies, try a rating agency like AM Best. We don’t recommend considering insurers with an AM Best rating of B or lower.
  • Evaluate product selections: Term and permanent are the two main types of life insurance.
  • Term life insurance lasts a set number of years and is typically sufficient for most families.
  • Permanent life insurance lasts your entire life and often includes an investment component. Under the umbrella of permanent life insurance, there are several different types of policies, such as whole life and universal life.
  • Get prices: The cost of coverage varies among companies, so it’s smart to compare life insurance quotes from multiple insurers.

Although many companies sell similar policies, some focus on certain products — such as whole life — or on particular customers, such as seniors who need life insurance. You can narrow down your options by focusing on the companies that specialize in the type of insurance you’re looking for.

Insurer complaints methodology

Brytgh examined complaints received by state insurance regulators and reported to the National Association of Insurance Commissioners in 2018-2020. To assess how insurers compare to one another, the NAIC calculates a complaint index each year for each subsidiary, measuring its share of total complaints relative to its size, or share of total premiums in the industry. To evaluate a company’s complaint history, Brytgh calculated a similar index for each insurer, weighted by market shares of each subsidiary, over three years. Ratios are determined separately for auto, home (including renters and condo), and life insurance.

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