Best Life Insurance Companies in the US | Life Insurance Explained

So you have decided that you want to purchase a life insurance policy but still wrapping your head around the commonly used terms, conditions and which insurance company would be the most suitable for your needs?

A decent life insurance policy may one day be essential for your family’s financial stability.

Stick around and I will help you make up your mind and provide you with an overview of different life insurance plans and the best life insurance companies in the US. 

The first thing is first. A life insurance policy is a binding contract between an insurance company and a policyholder where the policyholder pays regular premiums in exchange for the insurance company paying a  death benefit to the plan’s beneficiaries.  

The beneficiaries are the recipients of the death benefit if the insured person dies. 

The life insurance policy you purchase may be sufficient to replace your previous income and cover other costs your family members may face such as funeral expenses, college tuition fees and even taking care of an old family member through adding riders to the policy.

Riders are provisions that offer additional benefits in exchange for an additional cost. Riders enable the customization of the life insurance policy in a way that is most suitable to the policyholder and sustaining the future of their families.

Before we get into the best life insurance companies in the US, let me help you with your homework and pin down some key terms that you must know before going forward with your plan to purchase a life insurance policy in the US. 

Whole life insurance which is sometimes referred to as “straight life” or “ordinary life” insurance is a policy that covers the policy holder’s entire lifetime in exchange for the payment of premiums. 

These premiums are typically paid up to a maturity date which is when the paid amount matches the death benefit of the policy. Whole life insurance requires consistent premium payments and guarantees cash value accumulation.

The cash value accumulation is the sum of the initial investment and interest earned to date which you would obtain if you decided to give up the policy to the insurer or you decided to forfeit your coverage. The cash value is distinct from the death benefit in a way that your beneficiaries would not receive the cash value if you died. 

Another type of life insurance is the Universal Life insurance policy which differs from whole life insurance in terms of premium payments flexibility. 

Universal life insurance typically provides higher flexibility when it comes to premiums and death benefits in a way that can be tailored to the particular needs of the insured party. 

First, let’s start with Universal life (UL)  insurance. Universal life (UL) insurance comes in a lot of different flavors where the policyholder would pay a cost of insurance in exchange for what is known as a death benefit.

In the beginning, the policyholder pays a premium which is compared to the annual cost insurance and the difference between both is deposited in a side account.  

These side account funds may cover the rising cost of insurance as it rises with the aging of the policyholder. It is typically desirable to work closely with an advisory team to check the performance of such policy and its alignment with the policy holder’s requirements.

Another type is Indexed universal life  (IUL) which allows the policyholder to allocate funds to an equity index account such as Nasdaq or S&P to a restricted amount.  

The huge advantage of the Indexed universal life is its capacity to exploit compound interest and generate large amounts of NON-TAXABLE  cash within the policy. Cash that can be later accessed to fund a well-planned retirement.

Variable Universal Life (VUL) insurance policy allows its holder to invest their premiums in one or multiple accounts with various investment options including stocks, mutual funds, bonds, and many more investment venues.

The amount and method of investment are dependent on the policy holder’s risk tolerance and investment objectives determine the amount of risk to be undertaken.

Term life insurance plans are inexpensive when compared to other options since it has no cash value until the policyholder passes away.

Term life insurance provides coverage within an established term only unlike other options that provide insurance over the whole life of the policyholder.

But it is worth noting that the premiums will possibly go through the roof when the term life insurance lapses and you want to commit to a new policy. 

When deciding on which company you would like to get a life insurance policy from, looking into the history, reputation and stability are of utmost importance.

Some companies even help you make an educated and well-informed decision by providing one on one support, resources, and calculators.  

Some companies such as Prudential Financial even provides an online quote for up to $250,000. Now, let’s dive in and take a look at the top life insurance companies in the US.

First, let’s start with Prudential Financial.  This company has been providing people with insurance for more than 140 years as of this date.  This reflects this company’s trustworthiness.  

They provide term life insurance policy coverage, universal life insurance policy, indexed global life insurance coverage, and variable global life insurance policy, and you can add riders to your plan that include an unexpected survivor benefit, a living needs benefit, as well as a children’s protection rider.

The company has outstanding financial stability when it comes to the ratings of AM best and also Standard & Poor.  This helps the insurance holder to have some peace of mind in a way that the company won’t rip them off. As mentioned previously, Prudential provides you with online term life insurance quotes for up to $250,000.

When compared to other top life insurance providers, Prudential can satisfy the biggest range of needs when comes to people requesting life insurance in the US. Talking about old and well-established companies,  

State Farm is another outstanding insurance company with proven success. It was established in 1922 by a retired farmer and has grown from its humble beginning to a highly reputed Fortune 500 that offers a wide range of insurance products.

It is financially robust as it secured the highest possible rating from  AM Best. They offer term life insurance coverage, whole life insurance, and universal life insurance.

Like Prudential financial, State farm also provides potential customers with free online quotes for various insurance plans including permanent life policies by answering some questions.

You can even extend term life insurance online without the need for a medical exam and from the convenience of your home.

Another amazing contender for our overview is New York Life which has been in business for a whopping 175 YEARS. If this is not proof of their outstanding reliability, we don’t know what is.

Similar to the other top-tier life insurance companies, New York Life has a very strong rating from AM Best and Standard &  Poor.

They offer several insurance products such as term life insurance, whole life, universal life, and variable universal life policies.  

One of the best services provided by New  York Life is the ability of the policyholder to convert the term policy to a whole life policy later in addition to providing a wide array of customizable add-ons that may be valuable for policyholders.

Nonetheless, New York Life does not provide you with the convenience of generating an online quote and instead, you would fill in your contact information and a financial advisor would get in touch. 

There are many other great insurance companies in the US including Transamerica, Northwestern Mutual, Mutual of Omaha, and USAA that provide terrific services and can provide you with even more resources about life insurance and financial planning.

Make sure to check out the websites that are shown in the description of this video. Thank you for watching this video. I hope you got a better idea about the insurance companies in the US and have a better ability to make an informed decision.

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