Investopedia’s experts have named Banner Life, from Legal & General, as the foremost term life insurance carrier. This recognition stems from Banner Life’s high coverage limits, extended policy terms, and competitive premiums.
Term life insurance is a cost-effective approach to ensuring your loved ones’ financial security. It offers protection for a set duration, such as 10 or 30 years. In the unfortunate event of your passing during the policy’s term, the death benefit is paid out, enabling your family to manage final expenses, debts, and replace lost income.
Investopedia’s evaluation process involved a thorough review of 45 insurance providers, based on 70 criteria. These included cost, customer satisfaction, coverage options, and the application process’s ease.
Best Term Life Insurance Companies of [Current Year]
Best Overall, Best for No-Medical Exam Life Insurance, Best for Convertible Term Life Insurance: Banner Life
Best for Cheap Life Insurance: SBLI
Best for Best for Financial Stability: State Farm
Best for Children: Protective
Best Return-of-Premium Life Insurance: AAA
Best for Living Benefits: Nationwide
Banner Life
Banner Life earned the top spot due to its attractive premiums, substantial coverage limits, and policies that can last up to 40 years. Through its accelerated underwriting, individuals can qualify for up to $4 million in coverage without a medical examination. Banner also offers convertible term policies, which can be converted into permanent universal life insurance with flexible premiums, a guaranteed interest rate, and an accelerated death benefit rider. Conversions are available until age 70.
Pros:
- Unlimited maximum term coverage limits.
- Terms extending up to 40 years.
- Coverage up to $4 million without a medical exam.
- Competitive premiums.
- Includes conversion rider.
Cons:
- No return-of-premium option.
- No spousal term rider available.
- No live chat support.
Overview
Banner Life distinguishes itself in the term life insurance market, offering extended policy terms, going up to 40 years–longer than most insurers, which typically cap terms at 30 years. The company allows for unlimited coverage limits so you can apply for the amount of protection that suits your needs. Its “Lab Lift” program, designed to expedite underwriting, may enable qualification for coverage of up to $4 million without requiring a medical exam. Banner’s term policies boast affordability and incorporate complimentary advantages such as annual renewals, along with the choice to convert to permanent universal life insurance without a health evaluation. However, Banner doesn’t offer return-of-premium policies or spousal riders. It only sells term insurance up to age 75.
SBLI
SBLI offers some of the lowest average premiums making it a strong option for budget-conscious buyers of term life insurance.
Pros:
- Most affordable rates for many age groups
- Online quoting and applications available.
- Policies available until the age of 80
Cons:
- Limited coverage for policies without a medical exam.
State Farm
State Farm exhibits an A++ rating from AM Best indicating it’s in a robust financial position to meet insurance obligations.
Pros:
- A++ AM Best rating.
- Offers return-of-premium term life policies.
- Online quoting and applications are available.
Cons:
- Exam-free coverage limited to $50,000.
Protective
Protective is the top recommendation for children. It provides a child term rider featuring flexible options to prolong coverage into adulthood, safeguarding long-term financial security
Pros:
- Child term coverage lasts till age 25.
- Child policies can be transferred and converted into permanent coverage upon adulthood.
- Provides 40-year term policies.
Cons:
- Most applications necessitate a medical exam.
- No specific children’s whole life policy.
AAA
AAA provides return-of-premium (ROP) term life policies, which refund your premiums if you outlive the specified term. Up to $3.5 million in coverage is available.
Pros:
- Offers return-of-premium coverage with a high limit.
- The policy incorporates annual renewals and conversions.
Cons:
- The premiums for term policies are high overall.
- Must buy through an agent due to the ROP option.
- It is the subject of more frequent customer complaints.
Nationwide
Nationwide’s term plans include living benefits that let you access funds while you’re alive if a qualifying illness develops. This brings added value and financial protection beyond the death benefit.
Pros:
- Living benefits are provided at no additional cost.
- Few customer complaints.
- There is no cap on maximum term coverage limits.
Cons:
- Only sells term insurance up to age 70.
*Average Term Cost is based on quotes collected from Term4Sale, Quotacy, and individual company websites for a 30-year $250,000 term policy for non-smokers born in 1984 with excellent health. They are the average monthly costs across two ZIP codes, one in Houston and the other in Los Angeles, and for men and women.
How Does Term Life Insurance Work?
Term life insurance provides coverage for a predetermined duration, typically between 10 and 30 years. If a policyholder passes during the term, their beneficiaries receive a tax-free death benefit. If the policyholder outlives the term or lets the policy lapse, beneficiaries don’t receive the death benefit and the insurance company keeps the paid premiums.
Who Is Term Life Insurance Good For?
It is a solid option for those seeking more economical premiums and coverage for set periods. It may be beneficial for those with financial obligations that are not lifelong, such as covering the duration of a mortgage.
What Is the Difference Between Term and Permanent Life Insurance?
Term life insurance offers protection for a set term. Permanent life insurance, on the other hand, provides coverage for the entire lifetime of the policy holder. Since permanent policies entail more risk for insurance companies, they are typically more expensive than term life insurance. Permanent life insurance also often includes a cash value component, which allows policyholders to accumulate money over time.
Pros and Cons of Term Life Insurance
Pros:
- Affordable premiums
- May be convertible to permanent life insurance.
- Useful if you have dependents.
Cons:
- No cash value.
- Coverage expires after a set period.
Methodology
Investopedia sourced its information from public sources and by surveying recent life insurance buyers. The rankings also consider financial strength, customer satisfaction, policy options, and digital tools.
