Paul Sanchez
Whole life insurance is a type of permanent life insurance that provides coverage for your entire life, rather than for a set number of years. It also builds cash value over time, which can be accessed through withdrawals or loans.
When choosing a whole life insurance company, it's important to consider factors such as the company's financial strength, the reliability of its policy illustrations, the range of policies offered, and the potential to earn dividends. Here are some of the best whole life insurance companies in the market:
- Guardian: Best for applicants with health conditions
- MassMutual: Best overall
- Northwestern Mutual: Best for consumer experience
- New York Life: Best for high coverage amounts
- Pacific Life: Best range of permanent life insurance
- State Farm: Best for customer satisfaction
- AARP: Best for older applicants
- Lafayette: Best overall
- Nationwide: Best for burial insurance and living benefits
- Assurity: Best for children
- Transamerica: Best for small policies
| Characteristics | Values |
|---|---|
| Company | Lafayette, MassMutual, Nationwide, Assurity, Transamerica, Guardian, Northwestern Mutual, New York Life, State Farm, AARP, Pacific Life, Protective, Penn Mutual, Symetra, Lincoln Financial, Corebridge Financial, Midland National |
| Financial Strength Rating | A+, A++, A+, A, A, A++, A++, A+, A+, A, A, A, A, A, A |
| NAIC Complaint Rating | Much better than expected for company size, Much better than expected for company size, Much better than expected for company size, As expected for company size, Much worse than expected for company size, Much better than expected for company size, Much better than expected for company size, Much better than expected for company size, Much better than expected for company size, Much better than expected for company size, Much better than expected for company size, Much better than expected for company size, Much better than expected for company size |
| Minimum Coverage Amount | $3,000, $25,000, $10,000, $10,000, $1,000, $25,000, $25,000, $50,000, $5,000, $10,000, $10,000, $10,000, $10,000, $10,000, $10,000, $10,000, $10,000 |
| Maximum Coverage Amount | No maximum, Unlimited, $50,000, $250,000, $250,000, No maximum, Unlimited, $100 million, $10,000 to $15,000, $50,000, $30,000 or $50,000, $100,000, $100,000, $100,000, $100,000, $100,000 |
| Availability by State | Not available in New York, All states, All states, All states, All states, All states, All states, All states, All states, All states, All states, All states, All states, All states, All states |
What You'll Learn
Best for applicants with health conditions
Guardian is a good choice for applicants with health conditions as it has a diverse range of whole life products, including life insurance for people living with HIV. To qualify for these term and whole life policies, you must be under specialist care and receiving antiretroviral therapy.
The company also offers a range of riders, such as a disability waiver of premium rider, long-term care rider, or an index participation feature (IPF) rider. The IPF rider allows you to link a portion of your cash value to the performance of the S&P 500 Price Return Index, and any profits are paid out in dividends.
While Guardian doesn't guarantee dividends, it has paid them out to its permanent policyholders every year since 1868, and will pay $1.4 billion in 2024, the highest payout in the company's history.
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Best for cash value growth
MassMutual has a range of whole life policies to choose from, some of which earn cash value at a set interest rate of 3.75%. Depending on your policy, you can customise your coverage with various riders, such as a long-term care rider, chronic illness rider, and a yearly term purchase rider, which allows you to direct your dividend payments toward a term life insurance policy.
As a permanent policyholder, you are eligible to receive dividends based on the insurer's profits. MassMutual will pay out almost $2.2 billion to its permanent policyholders in 2024, its highest sum yet. MassMutual has paid dividends every year since 1869.
MassMutual also offers term, universal life, and variable universal life insurance, as well as retirement and investment planning services. The company scores well above average for customer satisfaction and has the highest possible rating for financial stability.
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Best for blended term
Blended term life insurance combines term and whole life insurance, offering the benefits of both types of policies. Term life insurance provides coverage for a specific period, often between 10 and 30 years, and is generally more affordable. On the other hand, whole life insurance offers lifelong coverage and includes a death benefit and a cash value reserve component. Blended term life insurance can be advantageous for those seeking the flexibility of term life insurance along with the permanent coverage of whole life insurance. Here are some key considerations and providers for blended term life insurance:
- Affordable Premium Payments: Blended life insurance tends to have lower premiums compared to permanent life insurance. It offers permanent protection at a more affordable price. Additionally, flexible premiums may allow you to make additional payments that can increase the cash value and convert the term coverage into permanent coverage faster.
- Coverage that Lasts and Grows: Blended life insurance provides a higher initial death benefit compared to traditional whole life insurance, making it ideal for younger individuals with large financial obligations. The coverage lasts as long as premiums are paid, and it can be enhanced with additional coverage options as your needs change.
- Cash Value Accumulation: Similar to permanent life insurance, blended life insurance policies accumulate cash value over time. This cash value can be accessed through loans or withdrawals and serves as a safety net.
- Potential for Dividends: Blended life insurance contracts may also be eligible for dividends, which are partial returns of premiums when the insurance company performs better than expected. Dividends can be used to purchase additional insurance or one-year term insurance, although they are not guaranteed.
When considering blended term life insurance, it's important to weigh the advantages against potential drawbacks. Blended life insurance starts with limited-time renewable coverage, gradually building up to permanent coverage. Additionally, the dividends and growth potential may be lower compared to a standalone permanent life insurance contract. Moreover, evidence of insurability, such as health status, may be required when purchasing additional coverage.
- Northwestern Mutual: Northwestern Mutual offers a whole life insurance policy called Whole Life Plus, which provides flexible coverage starting at $50,000. You can blend term life insurance with this policy to lower premiums while maintaining permanent coverage. They have a strong financial strength rating and consistently pay dividends to eligible customers.
- State Farm: State Farm offers standard whole life insurance with level premiums, as well as single premium and limited payment policy options. They have strong financial stability and rank highly in customer satisfaction. State Farm also provides flexible payment options and a broad range of term products.
- New York Life: New York Life offers three whole life policies, including Custom Whole Life, which provides flexible premium payment options. They have a good selection of riders, such as a chronic care rider and accelerated death benefit. New York Life is a mutual company and plans to pay out substantial dividends to its policyholders.
- MassMutual: MassMutual offers a range of whole life policies, some of which earn cash value at a fixed interest rate of 3.75%. They have a strong financial strength rating and a history of paying dividends to policyholders. MassMutual also offers various riders, such as a long-term care rider and a yearly term purchase rider.
- Thrivent: While Thrivent is a member-owned organization for Christians, it stands out for its strong financial strength rating and low level of customer complaints. They offer a range of life insurance types, including term, whole life, and universal, and have excellent customer satisfaction ratings.
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Best for rider options
Riders are add-ons to an insurance policy that provide extra coverage or benefits. They allow you to customize your insurance policy to address specific needs or concerns. While some riders are included at no extra charge, others come at an additional cost. Here are some of the most common rider options:
Guaranteed Insurability Rider:
This rider allows you to purchase additional insurance coverage at a later date without undergoing a medical examination or providing evidence of insurability. It is especially useful if your health declines or if you anticipate an increase in your financial obligations in the future.
Waiver of Premium Rider:
If you become totally disabled and unable to work due to an injury or illness, this rider waives future premiums on the base policy and any associated riders. It ensures that your policy remains active during this difficult period.
Family Income Benefit Rider:
In the unfortunate event of the insured's death, this rider provides a steady flow of income to their family members for a specified number of years. It helps the surviving family members meet their regular financial obligations and face fewer difficulties.
Accelerated Death Benefit Rider:
This rider allows the insured person to access a portion or all of the policy's death benefit while they are still alive if they are diagnosed with a terminal illness or chronic condition. The money can be used to pay for medical treatments, living expenses, or any other purpose.
Accidental Death Rider:
This rider provides an additional benefit on top of the regular death benefit if the insured dies due to an accident. It is sometimes referred to as a "double indemnity" rider, as it can double the payout to the beneficiaries.
Long-Term Care Rider:
If the insured person needs long-term care, such as a stay in a nursing home or home care, this rider offers monthly payments to cover these expenses. It is an alternative to purchasing separate long-term care insurance.
Return of Premium Rider:
Specific to term life insurance, this rider refunds some or all of your premium payments if you outlive the term of your policy. It is an expensive option and may significantly increase your premium costs.
These are just a few examples of the rider options available. The availability of riders can vary depending on the insurance company, the type of policy, and the state you live in. It is important to carefully consider your own circumstances and consult a financial professional before adding any riders to your policy.
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Best for customer satisfaction
State Farm is the best life insurance company for customer satisfaction, according to CNBC, NerdWallet, and MarketWatch. State Farm offers a variety of term, whole, and universal life insurance products, alongside other types of insurance. It is rated highly for both financial stability and customer service. State Farm received an impressive score of 843 out of 1,000 on JD Power's life insurance customer satisfaction survey, the highest of any company on the list.
State Farm's standard whole life policy has level premiums, which means you'll pay the same amount each month. But if you'd like to adjust when and how much you pay, you can buy a single premium or limited-payment policy.
If you're healthy, aged 18 to 50, and applying for a policy worth $100,000 to $1 million, State Farm might fast-track your application and issue your policy without the need for a medical exam. If you purely want to cover your own funeral, burial, and end-of-life expenses, the insurer offers a final expense policy to applicants aged 45 to 80 (50 to 75 in New York).
State Farm leads JD Power's list of life insurers with the best customer satisfaction.
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Frequently asked questions
Whole life insurance is a type of permanent life insurance that lasts your entire life as long as you continue to pay the premiums. It also has a cash value component that grows over time.
Some of the best whole life insurance companies are Lafayette, MassMutual, State Farm, New York Life, and Northwestern Mutual.
The average cost of whole life insurance is $3,945 a year, or $329 a month for a 30-year-old woman with $500,000 coverage. For a male buyer the same age, the same policy costs an average of $4,375 a year or $365 a month.
Part of your premium goes into a cash value account, which grows over time. You can access your cash value by withdrawing from the account or borrowing against it. When you die, your beneficiaries will receive the face amount, which is the death benefit minus any withdrawals or unpaid loan amounts.
Whole life insurance provides lifelong coverage and has a savings component that grows over time. It also offers living benefits, which allow you to access a portion of the death benefit while you're still alive if you're diagnosed with a serious illness.
