The Top 15 Companies to Shop for Life Insurance

Shopping for life insurance is no different than shopping for anything else. Here is the standard sequence of events:

Determine your criteria: that is, what are you shopping for?
Develop a list of companies to compare.
Perform the comparison.
Find a place to buy your selected product.

Assuming you have worked out your criteria, i.e. how much and what type of insurance you need, the rest sounds simple. In concept it is simple, but complications arise almost immediately when you find out that you can't just go to your local Yellow Pages and get a list of life insurance companies. That's because, the companies all sell their products through agents.

You can find plenty of agents in your local Yellow Pages, but that won't get you where you need to go. That's because most of those agents only sell products for a select few companies. Don't make the mistake of choosing an agent first. Develop your shopping list first and then find an agent who can work with your list.

That's the purpose of this page: to help you develop your shopping list. Once you have that list, you can compare them and, finally, choose an agent to help you buy the product you need.

Find the Yellow Pages: Since you can't find a list of insurance companies in your local Yellow Pages, we need another source. It just so happens there is such a source, namely the industry database published and supported for over 20 years by Compulife® Software, Inc. This database contains the rates and financial ratings of over 120 life insurance companies. (You can see the complete list here.) Competitive life insurance companies are motivated to include their information in this database because it is widely used by independent agents, who produce most of the term life insurance business.

Narrow Your Search: 120 companies are too many to work with manually. You would normally narrow this list down to, say, only companies with financial ratings of A+ or better. We used a computer to process the list, so we were able to evaluate all of them. It is interesting to note that all of the companies that made our Top 15 (based on lowest rates) have A.M. Best financial ratings of A+ or A++ (A++ is the highest rating).

Develop Your Shopping List: To develop our shopping list, we chose a face amount of $500,000 and extracted rates from the database for 32 different combinations of age, sex, health class, and length of term. The company with the lowest rate in each such category scored 15 points. The 15th lowest scored 1 point. And so on. The computer added up all of the scores and presto, we have our shopping list:

Perform the Comparison: Now that you have your shoppng list, you should choose a life insurance agent to help you perform the comparison. That's because you will have specific underwriting characteristics that will determine your health class. And your health class determines the final rate you will pay.

An agent can help you determine your most likely health class, but the insurance company underwriters make the final determination. Having said that, you can run some test cases for yourself and get a first cut comparison:

Perform the Comparison

A Final Note: Our shopping list came out with all companies rated A+ or better by A.M. Best. This is the second of 16 ratings used by this service, which has been rating life insurance companies for over 100 years. If you want the extra security afforded by the top financial rating (A++), we have performed that analysis as well. You can see the results here:

The Top 10 Premium Companies

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