Finding the best life insurance according to your personal insurance needs

Whether you are a single person or have a family, life insurance is something you should seriously consider buying if you look forward to a financially-secure future for your dependents. You can say that you do not have a family then why should you invest in a life insurance policy now. But eventually, you will settle down, have kids and then you will realize how foolish it was of you not to start early towards finding the best life insurance. Life insurance policies are cheaper if you buy them at a young age. That is why it is important to find an insurance policy early in life.

If you are looking for the best life insurance companies, you need to keep a lot of things in mind. Every major life insurance company is known for strong financial stature and excellent life insurance policy coverage provisions such as disability protection and end-of-life care. Do you want to get the best life insurance rates for yourself? To find the best life insurance policies, you will need to get quotes from multiple carriers and research a bit to find the one that suits your requirement and budget.

Best Life Insurance Companies in the USA

To help you with your life insurance research, we tried to find the best life insurance companies in the country. We used multiple tools such as Insurance Information Institute’s ‘Find an insurance company’ tool and A.M. Best’s consumer insurance center.

Once we got a comprehensive list of national insurance providers, we narrowed down our research to the insurance companies that do not have any special membership requirements and have all the features that should be there in an ideal insurance provider. Our research brought the following insurance companies to the light.

• TIAA Life
• New York Life
• Amica Life
• Transamerica
• Lincon Financial
• State Farm

While we recommend TIAA Life owing to its comprehensive policy offerings, great customer service and claims disbursal record, one can think of New York Life if he/she wants something specific and wants to customize the life insurance plan. Others on the list are equally worthy and one can choose a life insurance plan by them if it suits the requirements.

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 How do companies determine life insurance policy premiums?

Best life insurance companies are very considerate while determining the life insurance premium rates. Usually, they consider mortality rate as well as interest rates to estimate the claim amount it will require to disburse throughout the year. Overall, it identifies the expenses, the current mortality rate and interest rates to determine its operational cost that gets reflected in the form of insurance rates.

Characteristics of the best life insurance companies

• Self-underwritten policies

If you want the best life insurance for yourself, you need to find the companies that underwrite its policies. Not every insurance provider is an underwriter. Some are merely service providers who sell other companies policies leading to unnecessary additions to the process. Moreover, when there is a middleman involved, you cannot be sure of getting the best life insurance rates. Choose a company that underwrites its policies.

• Strong financial stature

If you want the best service experience with a life insurance claim, you should make sure that you only deal with a company that has strong financial credibility. Checking the financial strength ratings (FSR) of insurance companies will help you understand if a company is capable enough to pay for your claim. If you look for the A.M. Best’s rating, best insurance companies have a Superior (A+) ratings and you should never choose any other company over them.

• Guaranteed Renewability

Best insurance carriers give insurance holders an option to renew their policy term without having to take a medical examination. Though extending your policy can lead to an increase in policy premium, but having an insurance policy without needing to take a medical exam can mean you still have an insurance if you have developed a serious health issue during the end of your policy term. Guaranteed renewability ensures that you will be covered adequately for life.

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Life insurance policy coverage customization options

No two individuals can be same. So, naturally their life insurance needs also tend to differ. If you choose to buy an insurance policy from best insurance companies, they will give you an option to customize your plan according to your requirement. Some of the ways you can customize your plan are:

• Cost certainty: This option promises a guaranteed level premium throughout the term of your insurance plan. If you want a fix premium ear after year, this option can help you with the same. A common feature of the term plan, cost certainty keeps your rising insurance costs in control but some people say that you have to pay more during the early years of coverage to cover for rising costs of insurance later.
• Term length options: Did you know that insurance companies give you an option to customize the term of your policy. You can choose to buy an insurance coverage for ten, fifteen, twenty, twenty five or even thirty years according to your requirement. Some insurance companies like New York life give you an option to choose specific number of years between 10 and 20 years.

• Conversion restrictions: Companies give policy owners the option to convert from a term plan to a permanent plan but only the best life insurance companies such as TIAA life insurance allows you to convert any time to any permanent life insurance products. This reduces your insurance premium greatly as a number of companies restrict you when you want to convert by providing only expensive options in such a case.
• Disability protection: Disability protection is an added benefit as a premium waiver that gets applicable if the insured gets any form of disability during the term of life insurance. While such kind of customization does not protect an insurer from lost income but will definitely serve as a relief in the form of no insurance premiums to pay for without risking the lapse of a policy.
• End-of-life care: Such kind of customized benefit rider helps in covering end-of-life costs such as a lifesaving treatment, hospice care during the end term of life. Though such a customization option gets deducted from the total death benefit, it can still make things financially-manageable in times of distress.  

Factors & Things to Monitor for getting the best life insurance rates

Life insurance is a necessity for everyone. Though having an adequate life insurance can cost you a bit from your annual budget, but in the long term it is more of a safeguard to help protect your family in case of an accident or emergency. If you want to buy a life insurance policy, you must keep a few things in mind and make sure you always choose reliable insurance providers over cheaper insurance carriers with a shabby track record.

• Never buy a permanent insurance policy as an investment

A life insurance policy should never be purchased as an investment instrument. Though insurance companies market life insurance as a safe investment option, you cannot cash out much from an insurance policy during your lifetime. Essentially, a life insurance policy is meant to offer death benefits to the dependents. That is why the ‘cash value’ of the policy that gets accumulated from your annual premiums do not earn a good interest over time.

Also, cash value cannot be availed completely during your lifetime. If you use your complete cash value, your policy will be canceled. The cash value can be used to apply for future premiums or to increase death benefits. Though you can loan out your cash value, you still have to pay interest on it along with the loan amount. That is why you should never think of an insurance policy as an investment.

• Health and age are determining factors for annual premium

Insurance companies determine the premiums using complex formulas that estimate life expectancy of an individual. This means that your current health and age is a crucial factor in determining your annual premium. Though your health is only checked once using a medical test when you apply for coverage, the insurance company uses population data to gauge your risk of dying during the term of the policy to adjust your insurance premiums. The early you buy a policy, the lower will be your insurance premium as you are healthier and younger.

• Always take a medical exam while buying a policy

Before giving you a life insurance policy, insurance companies make you take a medical exam to evaluate your health condition. The exam checks you for diabetes, cancer and heart diseases. But when you are younger, you might be able to eliminate the need for tests and straight away fill out the questionnaire. But not taking the medical exam would leave the company with generic data about your health that can lead to insurance premiums. If the company will not have complete picture of your health, it will regard you as a riskier proposition leading to increased insurance premiums.

• Keep a check on your driving record and credit scores

No matter how foolish it may seem, but your driving record and credit history have an impact on your annual insurance premiums. If the companies find you to be a risky person i.e. you have a poor credit history or bad driving record, it can increase your annual premiums. Also being in a job with occupational hazards or living in a locality that is not safe can lead to an increase in the insurance premium rates.

 Claims & monetary benefits of life insurance policy

A life insurance policy is meant to provide for the dependents in case the insured soul passes away. In such a case, the dependents need to file for a claim with a certified copy of death certificate to the life insurance provider. Best life insurance companies and experts suggest informing the providers as soon as an insured is dead to simplify the claims process and avoid complications.

Always evaluate your life insurance needs

Before buying a life insurance policy, it is important for you to evaluate your needs accurately to get the best life insurance rates. Many advisors recommend multiplying your annual income by 10 to get your insurance coverage amount. But is such an important figure so easy to calculate?

Instead of adopting some generic formula, you should customize your requirement with something specific. Take your long term debts into consideration along with student loans, medical expenses and future college costs for your kids. Along with these, you need to find out how much your family will need to sustain a similar lifestyle in case you are gone.

It is always better to amplify your death benefit with something more than your dependents will need. Also, educate your family about investing the sum so that they can have a steady stream of income even when you are not there to earn. According to studies, if a family invests the death benefit even at a meager rate of 5% they can have a comfortable income for life. Don’t forget to factor in for inflation while making all your calculations.

Never rely on your employer’s insurance plan for personal life insurance

Many employers provide a life insurance plan to their employees. But only relying on something like that can turn disastrous for a family. Though employers provide such policies as extended benefits but the death benefit they provide is not adequate for your lifestyle requirements. Also, many employee sponsored plans are not portable. That means if you switch jobs, you have to surrender the benefits of life insurance policy by your previous owner. This can leave you with zero coverage and can put your family at risk. So, always top up your employer sponsored policy with a personal life insurance policy.

Concluding remarks

Though finding the best life insurance companies do not seem much difficult at the surface, it can be quite overwhelming if you do not know everything about an insurance policy. It is often in your best interest to understand everything related to life insurance and compare multiple insurance quotes before making an insurance purchase decision. With the help of an insurance comparison portal, you can easily request multiple quotes and make the right decision. Though we find TIAA Life a strong contender in the list of best insurance companies, you can look out for best life insurance rates using online tools and platforms.