- Our top rated term life insurance companies are Banner Life, MassMutual and Guardian Life
- The cheapest term life insurance companies on average are Banner and Pacific Life
- Banner offers the longest term policy at 40 years
7 Best Term Life Insurance Companies in 2024
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Via Secure Partner Policygenius
Updated:
Apr 23, 2024
Written by
Graham Ray
Graham Ray
Edited by
Tori Addison
Tori Addison
The MarketWatch Guides team has selected Banner Life and MassMutual as our top picks for term life insurance based on our research of 26 top life insurance companies. While you can use our review as a guide, we recommend getting a quote from multiple providers to find the right life insurance policy for you.
Our Top Picks for Term Life Insurance
Here are the top life insurance companies that provide term life coverage and what we like most about each one:
- Banner Life: Best for term life insurance
- MassMutual: Best for permanent life insurance
- Guardian Life: Best for an in-person experience
- State Farm: Best for customer satisfaction
- Transamerica: Most affordable coverage
- Pacific Life: Our pick for universal life coverage
- John Hancock: Best for people with diabetes
Compare Top 7 Term Life Insurance Companies
Note: We based cost data on quotes collected for 35- and 45-year-old men and women without a history of tobacco use seeking $250,000 in coverage.
MARKETWATCH GUIDES TIP
Term life insurance is usually the cheapest option for most people, especially compared to permanent coverage such as whole life or universal life. The most popular option is 20-year term coverage, according to the Insurance Information Institute (Triple-I).
Banner Life
Best for term life insurance
BBB Rating A+
Maximum Issue Age 75
Term Lengths Available 10, 15, 20, 25, 30, 35 and 40 years
MassMutual
Best for permanent life insurance
BBB Rating A
Maximum Issue Age 75
Term Lengths Available 10, 15, 20, 25 and 30 years
Guardian Life
Best for an in-person experience
BBB Rating A
Maximum Issue Age 75
Term Lengths Available 1, 10, 10, 20 and 30 years
State Farm
Best for customer satisfaction
BBB Rating A+
Maximum Issue Age 75
Term Lengths Available 10, 20 and 30 years
Transamerica
Our pick for most affordable coverage
Maximum Issue Age 80
Term Lengths Available 10, 15, 20, 25 and 30 years
Pacific Life
Best for universal life insurance
Maximum Issue Age 80
Term Lengths Available 10, 15, 20, 25 and 30 years
John Hancock
Best for people with diabetes
BBB Rating B
Maximum Issue Age 80
Term Lengths Available 10, 15, 20 and 30 years
Life Insurance Cost Calculator
Average Term Life Insurance Cost
Compare rates for varying coverage amounts, age and gender below.
Types of Life Insurance
Life insurance policies are designed to pay out a lump sum to beneficiaries when you die, but features can vary from one policy to the next. Below is a breakdown of the two types of policies — term life insurance and permanent life insurance.
Term Life Insurance
Term life insurance policies cover you for a preset term, such as 10, 20 or 30 years. Since there’s a time limit on coverage, these policies tend to be cheaper than life insurance policies that accrue cash value and cover you for your entire life.
Under the term life insurance umbrella, here are the different types of policies you can obtain, according to the National Association of Insurance Commissioners (NAIC):
- Level term: A term policy where premiums and coverage stay the same for the entire term.
- Decreasing term: A term policy where the death benefit decreases throughout your term. This type of policy can make sense if you purchase insurance to cover a specific expense that decreases, like college costs that get lower the closer your child gets to graduation.
- Renewable term: A policy that allows you to renew at the end of the term without additional underwriting or another medical exam.
- Convertible term: A policy that can be converted to a permanent policy that builds cash value.
- Return of premium term: A policy where you get a return of your premium payments at the end of the term if you outlive the policy term.
Permanent Life Insurance
Permanent life insurance policies cover you for your entire life as long as you keep up with premium payments. Aside from providing a death benefit, permanent life policies accumulate cash value as you pay premiums. This cash value grows tax-deferred and is money you can draw from during your lifetime. Below are different types of permanent life insurance:
- Whole life: A permanent life insurance policy where coverage and premiums are fixed, and the policy builds a guaranteed amount of cash value.
- Universal life: A permanent life policy where premiums may be adjusted, and you get a cash value account that earns interest.
- Index universal life: A permanent life insurance policy where you can adjust your premiums and cash value earns a return according to a market index, like the S&P 500.
- Variable universal life: A permanent life policy where premiums can adjust, and cash value built up can be invested to grow your assets. Money may be invested in stocks, bonds, mutual funds and more.
Factors That Affect the Cost of Life Insurance
During underwriting, life insurance companies review your information and family history to decide the risk of insuring you. Below are factors that may affect your insurance premiums.
- Age: Generally the older you are, the more you’ll pay in life insurance premiums because you’re a higher risk for insurance companies to cover.
- Health: Insurance companies may require that you go through a health exam as part of the application process, and having health conditions could make you more expensive to insure. Family medical history can also affect your rates. If you’re worried about your health affecting your ability to get insurance, there are some companies that offer no-exam life insurance.
- Tobacco use: Use of tobacco can lead to a higher risk of illness and can increase your life insurance rates.
- Occupation: Working in a dangerous job could increase your insurance costs. For example, a life insurance company could consider you a high-risk applicant if you work in construction or mining.
- Hobbies: If you engage in hobbies that are higher risk, like flying an airplane, rock climbing or skydiving, your insurance rates could be higher.
Debt and Term Life Insurance
Term life insurance is used as a form of financial protection to cover debt in the event of your death. The death benefit payout can help your beneficiaries cover mortgage payments, outstanding credit card balances, funeral costs and other forms of debt. However, since term life policies do not have a cash value component, you cannot use benefits to pay off debt while you’re alive.
Permanent life insurance policies such as whole life and universal life are examples of plan types that build cash value. Once your cash value reaches a specific amount, you can generally borrow against your policy to pay off debt. Some term policies have an option to convert to permanent coverage, which would potentially allow you to borrow against the policy.
How To Find the Best Term Life Insurance Company
Before you start shopping for the best term life insurance provider, begin by understanding your financial needs and current situation. Consider factors including your desired policy duration and how much coverage you need. Think about the specific features in your policy, such as an accidental death and dismemberment rider or a long-term care insurance add-on. Once you know your needs, you can look for the right insurance provider.
We recommend requesting quotes from at least three companies to ensure you’re getting a fair deal. You can find savings by shopping around since each insurer may evaluate your application differently.
You can also review each provider’s financial stability ratings — the independent credit rating agency AM Best is a good place to start. Also, it can help to check customer reviews, policy terms and understand the claims process. If you still cannot decide on the right company or coverage, consider talking to a financial advisor.
MARKETWATCH GUIDES TIP
Term life insurance can offer an affordable choice for parents or for people whose loved ones depend on them financially. Your named beneficiaries can use term life coverage to cover outstanding debt such as a mortgage or student loans or replace lost income if you pass away.
Is Life Insurance Worth It?
Whether or not it makes sense to purchase life insurance comes down to who relies on you. The goal is to avoid leaving behind a financial burden. If you’re single or retired without dependents and a paid-off mortgage, life insurance probably isn’t necessary.
However, if you have financial obligations, like a mortgage, and your family would struggle financially after losing your income, buying life insurance could be a good move. A life insurance payout can help loved ones pay for your funeral costs and other living expenses. Plus, cash left over could be inherited by children, giving them a financial head start in adulthood.
Term life insurance is the simplest and lowest-cost type of life insurance coverage. If your main goal is to cover a certain expense after death, like funeral costs or college tuition, this is the type of policy to go for. Meanwhile, a permanent life policy can be worth considering if you can afford higher premiums and you want to build assets while living. Whole life, universal life or variable universal life policies offer cash value accrual that you could eventually borrow or withdraw from.
Select
Best Term Life Insurance
What is Term Life Insurance?
Term vs. Whole Life Insurance
20 Year Term Life Insurance
Convert Term to Whole Life Insurance
Benefits of Term Life Insurance
How Long Term Life Insurance Should Last
Level Term Life Insurance
Short Term Life Insurance
Annual Renewable Term Life Insurance
Term Life Insurance Expires
Our Conclusion About Term Life Insurance
Life insurance is a financial tool that can help family members make ends meet after losing your source of income. Affordable life insurance can come in small amounts of $25,000 to $50,000, which could be just enough to handle your final affairs. You can also purchase higher amounts of insurance to handle bigger financial obligations, but this will increase your life insurance cost.
If you’re interested in purchasing life insurance, you don’t necessarily need to set up a meeting to talk about your options in person with an insurance agent. Today, many companies provide coverage details on the website for you to compare options, and there are online forms where you can get life insurance quotes. When shopping around for life insurance, review terms, coverage limits and rider options across multiple policies to find the right one for your family. We recommend that you compare quotes from at least three different providers.
Frequently Asked Questions About Term Life Insurance
There’s no best life insurance across the board — it varies by person and situation. The right insurance for you provides sufficient coverage at a price that fits into your budget. Experts recommend purchasing life insurance with a value that’s ten times your annual salary.
So, if you earn $60,000 per year, aim to have a policy that’s $600,000 per year. However, you could decide you need more if you want the insurance payout to be able to pay off your mortgage balance and cover education costs for multiple children.
Term life insurance may be worth buying if you have people who rely on your income. After you die, funds from the life insurance payout can go to paying for funeral costs and other final expenses. Your family can also use the money for day-to-day bills until they’re able to adjust their budget.
Term life insurance is inexpensive compared to other insurance that lasts a lifetime. And at the end of the term, you could renew, or you could consider converting to a permanent life policy that offers wealth-building opportunities through cash value accrual.
Term life insurance policies cover you for a specific amount of time and provide a death benefit that’s paid out to beneficiaries when you die. Whole life policies are permanent life policies that stay with you forever as long as you pay premiums. Coverage includes two features — the death benefit and cash value.
The death benefit provides a lump sum payout at death. But as you make premium payments, cash value increases with a guaranteed return as well, providing you with cash you can tap into. Whole life insurance policies generally have higher premiums than term life policies but could be a tool for people who want lifetime coverage and the opportunity to grow assets.
Term life insurance is a life insurance policy that provides a tax-free payout to your beneficiaries if you die within the policy term. In some cases, term policies have living benefits that let you access money early if you become terminally or chronically ill.
If you live longer than the insurance term, you may be able to renew your policy to continue coverage. You could also convert your policy to a permanent one that accrues cash value during the term. However, renewing or converting your policy may require higher premiums.
