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The Best Life Insurance Companies of 2016

Under the supervision of insurance expert Karla Lant, our research team spent 60 hours reviewing 30 of the top life insurance providers across 22 key features to rank the best options for consumers in 2016. The top three life insurance providers for 2016 were State Farm, MassMutual, and Northwestern Mutual.

 

Overview of Research

Along with our insurance expert, Karla Lant, our research team spent 60 hours researching the top 125 life insurance companies by size and market share. We used information from our research to narrow that list down to 30 of the top providers, and then evaluated each across 22 key features selected for their importance to individuals in the market for a life insurance policy.

karla
Karla Lant

Insurance Writer

Karla Lant is an experienced writer and editor with numerous publications on the topics of health, business, and insurance.

We determined the final ranking using a weighted methodology consisting of our 22 key features grouped into four core metrics: Financial Stability (35%), Reputation (30%), Customer Experience (20%), and Range of Product Offerings (15%).

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The Best Life Insurance Companies of 2016

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Core Metrics
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Financial Stability
Financial Stability
Market Share Percentage
Market Share Percentage
Comdex Credit Score
Comdex Credit Score
Asset-to-Liability Ratio
Asset-to-Liability Ratio
Age (years)
Age (years)
Reputation
Reputation
Individual Life Complaint Ratio (2015) (National Median = 1.0)
Individual Life Complaint Ratio (2015) (National Median = 1.0)
Group Life Complaint Ratio (2015) (National Median = 1.0)
Group Life Complaint Ratio (2015) (National Median = 1.0)
Claim Handling and Payment Complaints (2015)
Claim Handling and Payment Complaints (2015)
Three-Year Complaint Trend (2013-2015)
Three-Year Complaint Trend (2013-2015)
Customer Experience
Customer Experience
Overall Satisfaction (out of 5)
Overall Satisfaction (out of 5)
Billing and Payment (out of 5)
Billing and Payment (out of 5)
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Cost (out of 5)
Policy Offerings (out of 5)
Policy Offerings (out of 5)
Interaction (out of 5)
Interaction (out of 5)
Range of Product Offerings
Range of Product Offerings
Term Life
Term Life
Convertible Term Life
Convertible Term Life
Whole Life
Whole Life
Guaranteed Acceptance Whole Life
Guaranteed Acceptance Whole Life
Universal Life
Universal Life
Indexed Universal Life
Indexed Universal Life
Variable Universal Life
Variable Universal Life
Survivorship
Survivorship
Living and Accelerated Benefits
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Methodology

Our expert

Karla Lant, an expert on the insurance industry, guided us in our research. A graduate of Columbia Law School, Karla is a retired trial attorney and an adjunct professor in business. She has spent years writing on topics of health and business, both of which are married in her writing on the insurance industry.

How we selected our test group

There are countless subjective factors that go into deciding on a life insurance policy. Everyone’s needs, desires, financial situation, and health status are different. They impact every aspect of the insurance buying process. Therefore, it is always wise to consult a registered life insurance agent who can walk you through the buying process and help you choose the correct plan for you. When choosing an agent, it’s also a good idea to choose an independent agent who can shop policies from multiple companies rather than a “captive” agent who represents just one. This gives you a much wider range of options and helps guarantee that you’ll find the right coverage at the right price.

However, just like you wouldn’t walk into a car dealership without an idea about make, model, and price range, you should do plenty of research on your own before consulting a life insurance agent. These rankings are meant to aid in that research, and to show you the companies most likely to meet all of your insurance needs.

Though health factors are intricately tied to the insurance industry, unlike the medical sector, life insurance is first and foremost a business. Therefore, in order to decide which life insurance providers to rank, our first step was to see which ones were succeeding most in the marketplace. Using data sourced from the National Association of Insurance Commissioners (NAIC), we selected the top 125 companies based on market share. However, we didn’t want to rank solely on those financial aspects. So rather than simply rank the top 30 companies by market share, we used several more criteria to narrow our list. Those criteria included:

  • Number of state licenses: In order to make our rankings relevant to the largest number of readers, we focused on the companies who were licensed (either themselves or through subsidiaries) to sell life insurance in the most states. The providers with the most nationwide coverage were given more consideration.
  • Individual insurance providers: The purpose of these rankings is to inform readers of their best options for purchasing a life insurance. Therefore, we focused on the companies that serviced the widest range of customers. We eliminated companies that only offered group insurance policies to employers or companies dedicated only to one demographic, such as veterans, the elderly, or specific professions.
  • Reputation and customer feedback: Using a combination of NAIC complaint data, JD Power consumer rankings, and BBB reviews, we compiled a list of the highest rated companies and compared them to our preliminary list. The companies represented the most on each made the final cut.

This left us with the following 30 life insurance providers to rank:

  1. AIG
  2. Allstate
  3. American Income Life/National Income Life
  4. American National
  5. AXA
  6. Cigna
  7. Colonial Life
  8. Genworth Financial
  9. Great-West Life Assurance Co.
  10. Guardian Life Insurance Company of America
  11. John Hancock Financial
  12. Liberty National
  13. Lincoln Financial Group
  14. MassMutual
  15. MetLife
  16. Midland National/North American Co.
  17. Minnesota Life Insurance Company
  18. Mutual of Omaha
  19. Nationwide
  20. New York Life Insurance Co.
  21. Northwestern Mutual
  22. Pacific Life
  23. Primerica
  24. Principle Financial
  25. Protective Life
  26. Prudential Financial
  27. Southern Farm Bureau
  28. State Farm Life
  29. Transamerica/Aegon
  30. Voya Financial

How we selected which data to use in our methodology

Our expert decided on 22 key features by which to grade each life insurance provider. They were selected from her professional experience, recommendations from the NAIC and Insurance Information Institute, praises or complaints from consumer reviews, and recurring themes found in our initial research.

Those key features where then categorized as sub-metrics into four weighted core metrics.

Here is the breakdown:

Metric 1: Financial Stability (35% of final score)

  • Market share percentage
  • Comdex credit score
  • Asset to liability ratio
  • Company age

Metric 2: Reputation (30% of final score)

  • Individual life complaint ratio (2015)
  • Group life complaint ratio (2015)
  • Claim handling and payment complaints (2015)
  • 3-year complaint trend (2013-2015)

Metric 3: Customer Experience (20% of final score)

  • Overall satisfaction
  • Billing and payment
  • Price
  • Policy offerings
  • Interaction

Metric 4: Range of product offerings (15% of final score)

  • Term life
  • Convertible term life
  • Whole life
  • Guaranteed acceptance whole life
  • Universal life
  • Indexed universal life
  • Variable universal life
  • Survivorship
  • Living/Accelerated benefits

Data was sourced from the NAIC, JD Power and Associates, the BBB, the VitalSigns Comdex ratings, and each provider’s own website.

How we scored our methodology

After grouping the sub-metrics into their core metrics, we assigned each a score of 1-10 for every company reviewed. The final core metric score was averaged from the sub-metric totals.

For example, our #1 overall provider, State Farm, ranked 4th in Reputation with a score of 8. That core metric is made up of four sub-metrics.

Here’s how State Farm scored for each:

  • Individual life complaint ratio: 8/10
  • Group life complaint ration – 6/10
  • Claim handling/Payment complaints: 8/10
  • 3-year complaint trend: 10/10

Once the sub-metrics were averaged, we took each insurance company’s core metric scores, applied the weights (as described in the earlier breakdown), and calculated a final ranking.

Understanding Life Insurance Features

Which features matter and why?

1. Financial Stability back to metric

Very Important

35.00% of our methodology score

The main purpose of life insurance is to provide financial security for your loved ones in the event of your unexpected death. That money can be used to pay final expenses, temporarily replace your missing income, or fund a child’s college education. Because of this, we decided that the most important thing to look for when researching life insurance providers is their ability to actually pay out the benefits that you spent your life investing in. In order for you to feel confident that your family will be provided for after you’re gone, you need to feel confident in the financial stability of your life insurance company.

In order to measure this, we started by looking at things like market share. The larger the company and amount of direct written premiums, the greater the potential of them remaining solvent and having the assets to pay out all of their claims. However, companies can over extend themselves to the point that most of their assets are leveraged debt, which could prove problematic when it’s time to pay those liabilities. Therefore, we also analyzed details such as asset-to-liability ratios and Comdex scores, which compiles the credit ratings from the four major agencies: A.M. Best, Standard & Poor’s, Moody’s Investors Service, and Fitch.

Highest Scoring Companies in Financial Stability
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2. Reputation back to metric

Very Important

30.00% of our methodology score

Just because a company has the assets to follow through on their promises, doesn’t necessarily mean that they will. The insurance marketplace is filled with horror stories of denied claims and unethical business practices. Therefore, in addition to choosing a company that is financially stable, it is also very important to find one that has a history of being both operationally sound and ethical.

Rather than rely on subjective reviews and opinions of a company, we sought to determine reputation by using objective statistics. In order to do this, we used the databases at the National Association of Insurance Commissioners to compile a list of complaints registered against each company through every state insurance commission. We then looked at the number of complaints relative to each company’s size and market share, as well as complaint trends over the years. And since one of the main concerns is always whether or not a company will pay out benefits when claimed, we examined their payment and claims processing history.

Important caveats and notes: A complaint registered against a company doesn’t necessarily imply wrongdoing on their part. The NAIC tracks every reported complaint, regardless of the outcome. There are cases where the state commissions sided with the insurance company. However, we still feel as if this is valuable information, as does the NAIC, which is why it is included in their Consumer Information Database.

Highest Scoring Companies in Reputation
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3. Customer Experience back to metric

Important

20.00% of our methodology score

At its most basic, life insurance is a guarantee of financial security, bought and paid for in advance. Though it sometimes isn’t viewed that way, insurance is a product, purchased by a consumer. Therefore, as in any area of commerce, customer satisfaction is an important standard to judge any business by. If a buyer has a bad experience, they are less likely to return to a seller, and also less likely to refer any other business to it.

Customer experience is our most subjective metric. However, buying life insurance can be such a subjective decision, based on the personal needs of each consumer, that it is still a valuable tool to use. And in an effort to be as objective as possible with something as objective as customer opinions, rather than gather information from random internet searches or review sites, we sourced from one of the most respected ratings companies, JD Power. Using their U.S. Household Life Insurance Study, we compiled their customer ratings for the top companies in five key areas, including overall satisfaction and price.

Important caveats and notes: Not every insurance company on our list was included in the JD Power report. For those few companies, we sourced reviews in equivalent categories from the Better Business Bureau.

Highest Scoring Companies in Customer Experience
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4. Range of Product Offerings back to metric

Somewhat Important

15.00% of our methodology score

There is no such thing as a one-size-fits-all life insurance policy. There are dozens of options, and countless additional riders, all tailored to meet very different customer goals. Likewise, there isn’t always such thing as a one-stop-shop for buying life insurance. Different providers specialize in different plans and financial strategies. Buying from a life insurance company with limited options is an easy way to purchase a policy that is inadequate for your true needs.

In order to score this metric, we researched every company on our list to find their product offerings. Since there is such a wide range of policy types, we narrowed our focus to the most basic, and the most popular, among consumers. These ranged from basic term and whole life plans, to common riders like survivorship and living/accelerated benefits. The providers with the most options received the highest marks.

Highest Scoring Companies in Range of Product Offerings
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Editor's Awards

Perfect customer experience scores and above-average marks in all other metrics make State Farm the best place to shop for life insurance in 2016.

Though it wasn’t our most heavily weighted metric, State Farm’s perfect customer experience scores were enough to push it past all competition to claim our number one spot in this year’s rankings. They’re one of the younger companies on our list, but they still have nearly a hundred years of experience in the life insurance business. They have a strong financial standing, bolstered by a near-perfect credit rating, and one of the best reputations in the business. State Farm is a great choice by all measurable standards.

And while not the highest ranking, they also have a very wide range of product offerings. Based on their customer reviews in the price category, it’s also a safe bet that you’ll find the exact coverage you need for a lower cost with State Farm, rather than with most of their competitors.

Some of the scores in the core metrics were very close, with the first runner up finishing only a tenth of a point behind. However, if State Farm continues its trends from this review, it has the potential to rank as the top life insurance company for years into the future.

Ranking Results:

  • Financial Stability – 7/10
  • Reputation – 8/10
  • Customer Experience – 10/10
  • Range of Product Offerings – 7.4/10



Great financial stability and reputation, coupled with the widest range of product offerings, make MassMutual one of the companies most likely to meet all of your life insurance needs.

MassMutual had the widest range of available products and options for the purposes of this ranking, of all of the companies that we reviewed. No matter your short-term coverage needs or long-term investment strategies, MassMutual is guaranteed to have a plan to meet them.

Along with their second place overall finish, MassMutual also ranked second in our reputation metric. Their complaint ratios rank well below the national average, with only 5 claims handling/payment complaints for 2015.

However, that stellar NAIC reputation isn’t necessarily reflected in their customer reviews. MassMutual had a below average rank in our customer experience metric, weighed down by low price and interaction scores. So while they are nearly guaranteed to have the plan you need, customer feedback seems to imply that you’ll pay more for it, and may have a harder time getting and managing it.

Drawbacks:

  • Low customer review scores in price and interaction

Ranking Results:

  • Financial Stability – 8/10
  • Reputation – 9/10
  • Customer Experience – 5.2/10
  • Range of Product Offerings – 9.2/10



Guardian Life Insurance Company of America

With a large market share and a near-perfect credit rating, you are all but guaranteed to never lose your investment with Guardian Life.

Guardian Life Insurance Company of America didn’t particularly stand out in most of our core metrics. However, it did have higher-than-average scores in all of them except for range of product offerings. That solid showing is propped even higher by their top finish in financial stability.

Founded in 1860, Guardian Life is one of the oldest companies in our rankings, and they have the financial standing that you’d expect to come with over 150 years of experience. They have an above-average market share, nearly-perfect credit score, and a great asset-to-liability ratio. So while their product offerings may be somewhat limited compared to their competitors, they do have all of the standard options. And should you find a plan that fits your needs with them, you can rest assured that they will remain in a financial position to fulfill their obligations to your family if the time comes.

Drawbacks:

  • Multiple claim/payment complaints and an increasing trend in overall registered complaints

Ranking Results:

  • Financial Stability – 8.5/10
  • Reputation – 6.5/10
  • Customer Experience – 7.6/10
  • Range of Product Offerings – 6.4/10



Southern Farm Bureau

Southern Farm Bureau has a nearly non-existent complaint history which, coupled with high customer experience scores, means every buying and claims process with them should be hassle-free.

Due to the nature of our scoring system, Southern Farm Bureau’s highest standing in our review was actually a tie for first place with the Great-West Life Assurance company in our reputation metric. Both had among the lowest complaint ratios of any company. However, when looking at the pre-ranking data, Southern Farm had a slightly lower complaint trend percentage and one less claim handling/payment complaint, which gave it the edge for the purposes of this writing. So while they both received an “A” grade on the curve, Southern Farm Bureau answered one more question correctly on the test.

Reputation was Southern Farm’s only significant showing in our review. They have a below-average financial stability ranking and poor range of product options. However, those who did find an agreeable product and price with Southern Farm seem very satisfied with their plan. They received an above-average customer experience ranking, and very few of those customers are registering complaints against the company.

Drawbacks:

  • Below-average Comdex score and poor asset-to-liability ratio
  • Limited product offerings

Ranking Results:

  • Financial Stability – 5.7/10
  • Reputation – 9.5/10
  • Customer Experience – 7/10
  • Range of Product Offerings – 4.6/10

Last Updated on July 5, 2016

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