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Find the Best Term Life Insurance

Term life insurance is a relatively inexpensive way to provide money for your family if you die.
Dec. 15, 2020
Insurance, Life Insurance
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Imagine a world without yourself in it. Would your family need help paying the bills?

Term life insurance can help you bridge that gap for decades at a relatively low cost. If you die while the policy is in force, you’ll leave behind a lump sum of cash for whomever you choose.

Since term life insurance doesn’t last forever and has no investment component, it’s typically much cheaper than whole life insurance. Term life is a good policy to buy if you:

  • Want low premiums coupled with a large payout when you die.
  • Want to cover expenses that eventually end, like paying off your house or sending your kids to college.

 

» COMPARE: Life insurance quotes

The best term life insurance

The best term life insurance policies give you plenty of transparency up front about details like price, coverage limitations and fees. They offer flexible options and come from companies that are known for good customer service. Since you likely won’t be around to fight for your rights when your policy pays out, you need to be able to trust that your life insurance company is going to treat your beneficiaries right.

The following term life policies hold up under scrutiny. They give you flexibility in terms and coverage, offer up information before you make a purchase and come from companies with solid financial strength ratings.

CompanyTerm life policy
Haven Life

5.0 NerdWallet rating
Haven Term Life
Banner

4.0 NerdWallet rating
Banner OPTerm
MassMutual

5.0 NerdWallet rating
MassMutual Direct Term
Lincoln Financial

4.0 NerdWallet rating
Lincoln LifeElements; Lincoln TermAccel
USAA

5.0 NerdWallet rating
USAA Term Policy
Guardian

5.0 NerdWallet rating
Guardian Level Term
Pacific Life

4.5 NerdWallet rating
Pacific Life Elite Term
Country Financial

4.5 NerdWallet rating
Country Financial Term Policy

Haven Term Life

Haven term life insurance is issued by MassMutual, which gets far fewer complaints to state insurance regulators than expected for a company of its size, according to the National Association of Insurance Commissioners.

Haven uses accelerated underwriting to get consumers through its application process, which means you may not need a medical exam. In accelerated underwriting, a company looks at lots of data about you to try to get you coverage without making you see a nurse or doctor. You’ll still get the same rate as you would if you went through a traditional medical exam. With Haven, this option is available up to age 59 and for coverage of $1 million or less.

» MORE: Haven life insurance review

Banner OPTerm

Banner OPTerm is offered by Banner outside of New York and by William Penn within New York, and both brands are owned by Legal & General America. The company has received fewer complaints to state regulators than expected for a company its size, according to the NAIC.

OPTerm can be issued using accelerated underwriting, depending on your age and coverage needs. Coverage begins at $100,000 and extends beyond $1 million, and you can get a term policy anytime from age 20 to 75, with coverage expiring at 95 years old.

» MORE: Banner life insurance review

MassMutual Direct Term

In addition to underwriting the Haven policy described above, MassMutual offers its own Direct Term policy. This policy also offers accelerated underwriting for a subset of healthy applicants.

Direct Term comes with the option to convert it into a permanent life insurance policy within the first two to 10 years, depending on the options you choose.

» MORE: MassMutual life insurance review

Lincoln LifeElements

Lincoln Financial Group has two entries on our list of best term insurance policies. The first is Lincoln LifeElements, which is a term policy using accelerated underwriting. Lincoln Financial receives fewer than the expected number of complaints to state insurance agencies for a company of its size, according to the NAIC.

LifeElements is the larger of Lincoln Financial’s two term options, with minimum coverage starting at $250,000 and no defined maximum limit. Some level of coverage is available from ages 18 to 80, and policies can be converted to permanent coverage before the end of your term or age 70, whichever comes first.

» MORE: Lincoln Financial life insurance review

Lincoln TermAccel

Lincoln TermAccel is the company’s smaller term life offering, with coverage starting at $100,000 and maxing out at $1 million. As its name suggests, this policy uses accelerated underwriting, which can save qualified applicants from having to undergo an exam.

TermAccel isn’t available as late in life as LifeElements, and you’ll need to be younger than 60 to get a policy. Like LifeElements, your TermAccel policy is convertible to permanent coverage before the end of its term or your 70th birthday, whichever comes first.

USAA Term Policy

You don’t need a military connection to get USAA life insurance. While many USAA products are for military families only, life insurance is available to nonmilitary customers as well.

USAA’s policies offer some nice flexibility, especially for folks on deployment. For instance, USAA life insurance covers you during war and helps pay bills if you’re severely injured in the line of duty. It also lets you replace your lost group coverage if you retire or leave the military. Many life insurance policies from other companies contain an act of war exclusion, which stops a policy from paying out if you die in a combat zone.

Over three years, USAA has gotten far fewer complaints to state insurance regulators than expected for a company its size.

» MORE: USAA life insurance review

Guardian Level Term

Guardian Level Term comes in 10-, 15-, 20- and 30-year terms. Guardian Life Insurance receives far fewer complaints to state insurance regulators than expected for a company its size, according to the NAIC.

Level Term policies are issued to applicants 18 to 75 years old, and coverage starts at $250,000, going up to $5 million.

» MORE: Guardian life insurance review

Pacific Life Elite Term

Pacific Life has received far fewer complaints to state insurance regulators than expected for a company its size, according to the NAIC.

Elite Term coverage is available for purchase from ages 18 through 75, in amounts ranging from $750,000 to over $3 million. Policies are convertible to permanent coverage for the first 10 years of ownership.

» MORE: Pacific life insurance review

Country Financial Term Policy

Country Financial gets far fewer complaints to state insurance regulators than expected for a company its size, according to the NAIC.

Country Financial’s term policies are available for 10 to 30 years, with coverage starting at $50,000. You can add up to $50,000 of coverage for a child younger than 18 through an optional child term insurance rider.

» MORE: Country Financial insurance review

What is term life insurance?

Term life insurance is a contract between you and an insurance company that lasts for a specific period of time, such as 10 years, 20 years or until you reach age 65. In exchange for your premium payments, the insurer pays a death benefit to your beneficiaries if you die during the term of the contract.

This is a key difference between permanent life insurance and term. Whole life and other types of permanent life insurance last your entire life, as long as you keep paying the premiums. Term life insurance expires when the term ends. If you still need life insurance, you may be able to renew your policy, convert it to whole life insurance at a higher premium or buy another policy.

Another difference: Term life doesn’t have an investment option or build up cash value that you could someday borrow against. This is one reason term life is cheaper than whole life. With term life, you generally just pay for the potential death benefit; with whole life, higher premiums are needed to grow cash value.

» MORE: The differences between whole life insurance and term

Who should get term life insurance?

If no one depends on you financially and your death would not be a financial burden on your family, you may not need life insurance. But if someone you care about will need money if you die, term life insurance may be right for you.

Term life policies often last for 10, 20 or 30 years, but many insurers have terms available in 1- and 5-year increments. If you’re a breadwinner in your family, you can choose a term that matches the years your family will rely on your income, such as the remaining years you’ll have mortgage payments. If you’re a stay-at-home parent, you may want term life insurance to cover services you provide now without payment, such as child care. If you were gone, your family might need to pay someone to handle these tasks.

Your needs might change over time. If you expect that to happen, you can have more than one life insurance policy, giving you extra coverage at the stages of life when you need it most.

Ideally, by the time your coverage ends, you’ll no longer need life insurance. Your children will be grown, your mortgage will be paid off and you’ll have enough savings to be financially secure.

If you buy term life and then decide you need lifelong coverage after all, many policies will allow you to convert your term life policy to permanent insurance. Your premiums will go up, but you can stay insured without having to prove you’re still in good health. Some policies allow conversion at any time, while others permit it only in the first few years of coverage.

How much term life insurance do you need?

Figuring out exactly how much life insurance you need can be tricky. It depends on your expenses, your assets, your goals and a host of other factors.

The calculator below will get you started. For more help, check out the calculators, tips and rules of thumb in our guide to how much life insurance you need.

How much does term life insurance cost?

The cost of a term life insurance policy depends on a number of factors, including:

  • Age. Younger people qualify for lower premiums because they are less likely to die in the near term.
  • Health. Many insurers require you to take a medical exam and answer health questions. Poor health can mean higher premiums.
  • Gender. Men typically die at younger ages than women, so men often pay more for life insurance.

Most term life insurance policies have level benefits and premiums, so the premiums stay the same throughout the term.

Here’s a look at how much you might expect to pay for a 20- or 30-year term life policy, compared with the cost for a whole life policy with the same death benefit.

Average annual life insurance rates for women

Age at purchasePolicy amount20-year term life30-year term lifeWhole life
30$250,000

$500,000

$1 million
$133

$195

$299
$191

$307

$525
$1,904

$3,753

$7,417
40$250,000

$500,000

$1 million
$180

$293

$501
$280

$485

$893
$2,766

$5,478

$10,867
50$250,000

$500,000

$1 million
$364

$653

$1,162
$616

$1,139

$2,132
$4,262

$8,470

$16,851
60$250,000

$500,000

$1 million
$908

$1,659

$3,185
Not available.$7,015

$13,977

$27,863
Source for all rates: Quotacy. Lowest three rates for each age and policy type averaged.

Average annual life insurance rates for men

Age at purchasePolicy amount20-year term life30-year term lifeWhole life
30$250,000

$500,000

$1 million
$150

$229

$373
$223

$368

$647
$2,145

$4,235

$8,380
40$250,000

$500,000

$1 million
$210

$344

$593
$340

$603

$1,115
$3,191

$6,328

$12,563
50$250,000

$500,000

$1 million
$465

$842

$1,604
$811

$1,509

$2,913
$4,990

$9,927

$19,763
60$250,000

$500,000

$1 million
$1,254

$2,372

$4,590
Not available.$8,186

$16,318

$32,547
Source for all rates: Quotacy. Lowest three rates for each age and policy type averaged.

» MORE: Average life insurance rates 

Largest sellers of life insurance

These are the nation’s biggest sellers of life insurance, ranked in order of market share for individual life insurance, according to data from S&P Global Market Intelligence.

All of these companies offer term life insurance, and most offer other types of coverage as well. Market share is based on the total amount of premiums written for U.S. policyholders in 2019. Click on the links to learn more about each company.

CompanyMarket share in 2019
Northwestern Mutual10.3%
New York Life Insurance Co.7.0%
MassMutual 6.4%
Lincoln Financial Group5.6%
Prudential 5.3%
John Hancock 3.4%
State Farm 3.4%
Transamerica3.2%
Guardian3.1%
Source: S&P Global Market Intelligence; market share based on 2019 direct ordinary individual life insurance premiums

» MORE: Life insurance reviews

How to find the best term life insurance company

When you buy life insurance, you’re counting on a company to be there for your family many years in the future. For that reason, it’s important to choose a company you can trust. Here are some ways to compare companies and find the one that’s right for you.

Look up the insurer’s financial strength

You want a company that will be around decades from now, with enough money to pay claims. An insurer’s financial strength is one way to gauge whether it’s likely to meet that mark. You can check the financial strength rating of each term life insurance company you’re considering through a rating firm such as A.M. Best.

NerdWallet typically recommends considering insurers with ratings of A- or higher. Any company with an A.M. Best rating of B+ or higher has a “good” ability to meet its obligations, in A.M. Best’s opinion. Companies with ratings below that may not be quite as safe a bet and often have higher rates of complaints relative to their size.

All of the largest life insurance companies, for example, have solid financial strength ratings.

Research the insurer’s reputation for customer service

You want a company that provides solid customer service, from the day you start shopping until it’s time for a claim. To get an idea of whether other customers have been satisfied, you can look up an insurer’s complaint index on the NAIC website. The score is based on the number of complaints filed against the insurance company with state regulators, adjusted for the company’s market share (based on premiums written). The average is 1, so a score higher than 1 means the company received more complaints than expected for its size.

An insurer you’re looking up may have several subsidiaries, so after you search, look at the subsidiaries with your state listed nearby. Then, when you click to look at reports, make sure to choose the complaint code report and select “results by complaint index” to find this number. Choose last year, instead of this year, to see a full year’s report, and make sure you’re looking at “individual life.”

» MORE: Best life insurance companies

How to find the best term life insurance policy

Term life insurance isn’t as complicated as whole life, but choosing a policy isn’t always simple. You’ll have several decisions to make, and the best options for you may not be the same as the best choices for someone else. The ideal policy is one that fits your family’s unique needs.

Know the types of term life policies

  • Level-premium term life is one of the most common types of term life insurance and the best choice for many people. Your premiums are the same every year, and your beneficiaries will receive the guaranteed death benefit if you die during the term. According to the Insurance Information Institute, 20-year policies are the most popular. However, a different term may be best for you.
  • Renewable term life is just like the name implies: You can choose to renew after every term, but your premium could increase when you do. Your policy will spell out the possible cost increases. This type of policy is typically best for people who have a very short life insurance need. However, you’ll likely save money by locking in a rate with a level-premium policy.
  • Decreasing term life policies have a death benefit that goes down over time, typically with level premiums, although sometimes premiums are lower over time also. People may choose this type of policy if they want to cover a specific debt, like a mortgage, that they plan to pay off during the term.

Consider policy options

While many term life policies are simple and unadorned, some companies offer extra features that might be worth considering. An insurer may include some of these options automatically, or you might need to pay extra to add them as “riders” to your policy. A rider, also known as an endorsement, is a policy amendment that typically lets you add options at additional cost. If these extra features are important to you, make sure to ask about them when you’re shopping for a policy.

Return of premium

This option may be appealing if you don’t like the idea of outliving your policy and getting nothing in return for paying years’ worth of premiums. With a return-of-premium rider, if you keep your policy until the end of its term, the insurer will refund the premiums you paid.

However, your premiums are likely to be considerably higher if you choose this option. The price can be 30% or more above the cost of a standard term life policy, according to Life Happens, a nonprofit that provides life insurance education.

Accelerated death benefit

If you become seriously ill, this option allows you to get part of the money from the death benefit while you’re still alive. According to the American Council of Life Insurers, you might qualify for an early payout of 25% to 95% of the death benefit if you:

  • Are terminally ill and expected to die within 24 months.
  • Have a serious illness that may reduce your life span, such as acute heart disease, AIDS or the need for an organ transplant.
  • Are permanently confined to a nursing home or need long-term care because you can’t handle tasks like bathing, dressing or eating on your own.

The details can vary by policy, so before you buy, ask how you could qualify for accelerated death benefits and how much money you’d be eligible to receive.

Also keep in mind that if you use this option, the amount you withdraw will no longer be paid to your family when you’re gone. If you think you might use an accelerated death benefit, make sure to buy enough coverage that your family’s financial needs will still be met when you die.

Disability waiver of premium

With this option, you can skip paying premiums if you become disabled for a long time, generally six months or more. Your policy remains in force, even though you’re no longer required to make premium payments.

Accidental death benefit

This option typically doubles or triples the payout if you die due to an accident. But be aware that “accident” might not mean what you think.

Insurance companies may strictly define what types of accidental deaths qualify for the extra payout. In addition, there may be time limits. For example, if you are injured in an accident and die of your injuries seven months later, your beneficiaries won’t get an extra payout if the rider covers only deaths within six months of an accident.

» MORE: How to decide if that life insurance rider is worth it

Understand the approval process

Before you buy coverage, an insurer will want to know how healthy you are. You’ll typically need to answer some health questions, and it’s important to be truthful. Companies can reject a life insurance claim if the application was inaccurate or incomplete.

A fully underwritten life insurance policy requires a life insurance medical exam. A paramedical professional typically takes blood and urine samples and checks factors like your weight, height and blood pressure.

You can also choose simplified-issue life insurance, which doesn’t require a medical exam. You’ll still answer health questions, and the insurer may pull data about you from other sources, such as your prescription drug history and driving record.

Even if you have some health issues, you can generally find the best price by applying for a fully underwritten policy.

For some people, accelerated underwriting is another way to get life insurance without a medical exam. You answer health questions online or by phone, and the insurer uses outside data and sophisticated algorithms to evaluate your application. You might get rapid approval, with rates similar to those for a fully underwritten policy. However, if you’re in less-than-perfect health, the company may require a medical exam before deciding whether to approve your application.

Compare prices

Life insurance premiums typically stretch for years into the future, so it’s worth spending time now to lock in the best rate you can.

It’s easy to get life insurance quotes online for term policies. Before you buy a policy, compare prices from several companies. Be sure to choose the same coverage amounts and options for each policy you compare.

You may discover that term life insurance rates vary widely. A few dollars a month might not seem like a big difference, but small savings will add up over time. Finding a good price on a top-notch policy can put you and your family financially ahead for decades.

Methodology: Life insurance ratings

NerdWallet’s life insurance ratings are based on weighted averages of financial strength ratings, which indicate a company’s ability to pay future claims, and complaint index scores from the National Association of Insurance Commissioners for individual life insurance. To calculate each insurer’s rating, we adjusted the scores to a curved 5-point scale.

These ratings are a guide, but we encourage you to shop around and compare several insurance quotes to find the best rate for you. NerdWallet does not receive compensation for any reviews.

Insurer complaints methodology

NerdWallet examined complaints received by state insurance regulators and reported to the National Association of Insurance Commissioners in 2016-2018. To assess how insurers compare to one another, the NAIC calculates a complaint index each year for each subsidiary, measuring its share of total complaints relative to its size, or share of total premiums in the industry. To evaluate a company’s complaint history, NerdWallet calculated a similar index for each insurer, weighted by market shares of each subsidiary, over the three-year period. Ratios are determined separately for auto, home (including renters and condo) and life insurance.

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