Welcome you all, today we will talk about Best Term Life Insurance - Sproutt. To answer the question, what is the best term life insurance company? This article will break down the difference between the various insurance companies.
- Price
- Financial Strength and long term viability
- Riders
- Conversion options
- Flexibility of design
- Underwriting
- Application process
Here are the scores for each company, before we delve into the details:
| Company | Stars | Notes |
|---|---|---|
| Sproutt Insurance | ★★★★★★☆ | Easiest process and fastest coverage |
| American General Life (AIG) Insurance Company | ★★★☆☆☆☆ | Offers the most flexibility in design |
| American National Life Insurance Company | ★★★★★☆☆ | Most built-in riders |
| Assurity Life Insurance Company | ★★★☆☆☆☆ | Most riders available for purchase |
| Banner Life Insurance Company | ★★★★★☆☆ | Offers longer-term policies fully online |
| Guardian Life Insurance Company | ★★★★★☆☆ | Great conversion options |
| Lincoln National Life Insurance Company | ★★★★☆☆☆ | Fully online or phone capabilities |
| Mass Mutual Life Insurance Company | ★★★★★★☆ | Fully online with excellent convertibility |
| Minnesota Life Insurance Company | ★★☆☆☆☆☆ | Accelerated underwriting up to $2MM |
| Mutual of Omaha Life Insurance Company | ★★★★☆☆☆ | Offers simplified underwriting |
| Nationwide Life Insurance Company | ★★★☆☆☆☆ | Very accepting accelerated underwriting program |
| Penn Mutual Life Insurance Company | ★★★★☆☆☆ | Up to $7.5MM with no medical exam fully online |
| Principal National Life Insurance Company | ★★★★☆☆☆ | Offers $3MM without an exam completely online |
| Protective Life Insurance Company | ★★★★☆☆☆ | Has 35 and 40 year term options |
| Prudential Life Insurance Company | ★★★★☆☆☆ | Offers expanded underwriting tables |
| Sagicor Life Insurance Company | ★★★★☆☆☆ | Fully online with as fast as instant decisions |
| Savings Bank Mutual Life Insurance of MA (SBLI) | ★★☆☆☆☆☆ | No exam guaranteed |
| Transamerica Life Insurance Company | ★★★☆☆☆☆ | Provides more options at older ages |
Price
Term life insurance policies only cover the cost of insurance and do not have any cash value or savings component. As a result, the monthly premium payments are important and even a small difference between companies can add up over the course of a 30 year term policy. This can result in a significant difference in the overall cost of the policy.
It's important to note that pricing is not the only factor to consider when choosing a term life insurance policy. Other important factors include the financial strength and stability of the insurance company, the policy's coverage and benefits, and the level of customer service and support provided by the company. It's a good idea to research and compare multiple options before making a decision.
Pricing for term life insurance can vary greatly based on a number of factors such as age, coverage amount, policy length, gender, state of residence, and health status. Therefore, even if one company may have more competitive pricing for one individual, it may not be the case for another. It's important to compare quotes from multiple companies and consider all the factors that may affect the pricing to find the best fit for your specific situation.
| Life Insurance Company | Pricing for a $500,000 20 year term policy: |
|---|---|
| Protective Life Insurance Company | $19.40 |
| Banner Life Insurance Company | $19.43 |
| American General Life (AIG) Insurance Company | $19.66 |
| Penn Mutual Life Insurance Company | $19.78 |
| Transamerica Life Insurance Company | $19.78 |
| Principal National Life Insurance Company | $19.87 |
| Savings Bank Mutual Life Insurance of MA (SBLI) | $19.87 |
| Sproutt Insurance | $20 |
| Lincoln National Life Insurance Company | $20.22 |
| American National Life Insurance Company | $20.74 |
| Sagicor Life Insurance Company | $21.37 |
| Minnesota Life Insurance Company | $22.42 |
| Nationwide Life Insurance Company | $22.75 |
| Guardian Life Insurance Company | $23.17 |
| Mass Mutual Life Insurance Company | $23.50 |
| Mutual of Omaha Life Insurance Company | $23.76 |
| Assurity Life Insurance Company | $24.80 |
| Prudential Life Insurance Company | $36.75 |
(* It's worth noting that the numbers provided are based on a hypothetical scenario of a healthy 30 year old male who qualifies for the top health class in the state of Pennsylvania. Therefore, the pricing may be different for individuals with different characteristics or living in different states. It's always recommended to compare quotes from multiple companies and take into account all the factors that may affect the pricing to find the best fit for your specific situation.)
As demonstrated by the 18 companies quoted above, the pricing for term life insurance is relatively similar among the majority of them, with only one company being an exception. The difference in pricing is primarily determined by the length of the term. However, it's worth noting that these numbers are based on a specific scenario and may vary widely if any of the specifications such as age, coverage amount, state of residence, or health status were to change. Therefore, it's important to compare quotes from multiple companies and take into account all the factors that may affect the pricing to find the best fit for your specific situation.
Long Term Viability and Financial Strength
When choosing a term life insurance policy, it's essential to consider not only the pricing but also the financial strength and long-term viability of the insurance company, in order to find a policy that fits your budget and provides you with the peace of mind that comes with knowing your loved ones will be protected in case of your untimely death.
Similar to stocks and bonds, life insurance companies are rated for their financial soundness and long-term viability, and when purchasing a life insurance contract, it's important to ensure that the company will be financially stable and able to fulfil its obligations when it comes time to claim the death benefit.
here are four companies that offer ratings for life insurance companies across the industry: A.M. Best, Fitch, Moody's, and S&P. Each company uses its own scoring mechanism, so the top tier with A.M. Best would be A++, with Fitch it would be AAA, with Moody's it is Aaa, and with S&P it is AA+. To simplify the ratings across all four rating agencies, the COMDEX score was created. It is a composite of all four rating companies put together in a numeric score of 1-100, which makes it easier to compare the overall financial strength of different insurance companies.
| Company | COMDEX scores |
|---|---|
| Guardian Life Insurance Company | 98 |
| Mass Mutual Life Insurance Company | 98 |
| Minnesota Life Insurance Company | 96 |
| Banner Life Insurance Company | 95 |
| Prudential Life Insurance Company | 95 |
| Penn Mutual Life Insurance Company | 93 |
| Protective Life Insurance Company | 92 |
| Principal National Life Insurance Company | 91 |
| Lincoln National Life Insurance Company | 91 |
| Nationwide Life Insurance Company | 90 |
| Mutual of Omaha Life Insurance Company | 90 |
| Transamerica Life Insurance Company | 85 |
| American General Life (AIG) Insurance Company | 83 |
| American National Life Insurance Company | 79 |
| Savings Bank Mutual Life Insurance of MA (SBLI) | 76 |
| Assurity Life Insurance Company | Unrated by comdex, A- with A.M. Best |
| Sagicor Life Insurance Company | Unrated by comdex, A- with A.M. Best |
Correct, the COMDEX scores provide an overall rating for the company, but it is important to also consider other factors such as their specific term life insurance products, customer reviews, and financial stability before determining the best insurance company for term life insurance.
Riders
Riders are add-ons to a term life insurance policy that provide additional benefits beyond the death benefit. There are several types of riders available and they vary widely between insurance companies. Some of the most common riders include the Accidental Death Benefit (ADB) rider, which pays an additional death benefit if the policyholder dies as a result of an accident. Another common rider is the Waiver of Premium rider, which waives the policyholder's premium payments if they become disabled. Some insurance companies also offer Child Term rider, which provides coverage for the policyholder's children. The Return of Premium (ROP) rider is also a popular option, which returns all premiums paid if the policyholder outlived the term of the policy. Lastly, the Accelerated Death Benefit (ABD) rider allows the policyholder to access a portion of the death benefit early in the event of a terminal illness.
- Accelerated Death Benefit (ACD) - The "Accelerated Death Benefit" rider allows the policyholder to access a portion of their death benefit while they are still alive, in the event that they are diagnosed with a terminal illness. This can be used to pay for medical expenses or other end-of-life costs. The amount of the benefit and the conditions under which it can be accessed will vary depending on the insurance company and the specific policy. Some companies may offer this rider at no extra charge, while others may charge an additional premium.
- Accidental Death Benefit (ADD) - An "Accidental Death Benefit" rider is an add-on feature to a life insurance policy that provides extra coverage in the event of an unexpected or accidental death. The purpose of this rider is to provide additional financial support for the policyholder's loved ones during a difficult and unexpected time. This extra coverage can help cover any additional expenses that may arise, such as funeral costs, legal fees, or outstanding debts. With this rider, you can ensure that your loved ones will have the financial means to cover any extra costs that may arise, in case of an accidental death.
- Children’s Insurance Rider (CI) – A "Child Term Rider" is an option that can be added to a life insurance policy to provide coverage for the policyholder's children. This rider typically offers a small amount of term life insurance coverage, with the option to convert to a permanent policy when the child reaches adulthood. The coverage amount can vary widely from carrier to carrier, with the range being from $1,000 to $100,000. It is often guaranteed issue, meaning that there is no medical examination required for the children. However, it does come at an additional cost to the policyholder, but the price is usually the same regardless of how many children are being insured. This rider is a great way to ensure that your children are protected financially in case of an unexpected event.
- Critical Illness Rider (CIR) - is a feature that can be added to a life insurance policy that provides a lump sum payment to the policyholder in the event of a critical or terminal illness. This rider is typically offered at no extra charge by insurance companies like American National and National Life. However, it may also be available with an additional cost from companies like Assurity or TransAmerica, which may offer it as part of their Living Benefits term policy, which costs more than a regular term policy from the same company.
- Disability Waiver of Premium (WP) is a rider that allows the policyholder to continue their life insurance coverage without the need for additional payments in the event of a disability. This rider typically comes at an additional cost.
- Extended Conversion Rider (ECR) is a feature that extends the time period during which a term life insurance policy can be converted to a permanent policy, such as a Universal Life or Whole Life policy. This rider is typically available at an additional cost.
- Return of Premium (ROP) - The Return of Premium (ROP) is a feature that allows the policyholder to receive a refund of all premiums paid if the death benefit has not been paid out upon completion of the level term period. This rider typically has a large additional cost and is only offered by a select few companies such as AAA, Assurity, Cincinnati Life, Mutual of Omaha and State Farm.
| Company | ACD | ADD | CI | CIR | WP | ECR | ROP |
|---|---|---|---|---|---|---|---|
| Sproutt Insurance | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ |
| American General Life (AIG) Insurance Company | ✔ | ✔ | ✔ | ✔ | |||
| American National Life Insurance Company | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | |
| Assurity Life Insurance Company | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | |
| Banner Life Insurance Company | ✔ | ✔ | ✔ | ||||
| Guardian Life Insurance Company | ✔ | ✔ | ✔ | ✔ | |||
| Lincoln National Life Insurance Company | ✔ | ✔ | ✔ | ✔ | |||
| Mass Mutual Life Insurance Company | ✔ | ✔ | ✔ | ✔ | |||
| Minnesota Life Insurance Company | ✔ | ✔ | ✔ | ✔ | ✔ | ||
| Mutual of Omaha Life Insurance Company | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | |
| Nationwide Life Insurance Company | ✔ | ✔ | ✔ | ||||
| Penn Mutual Life Insurance Company | ✔ | ✔ | ✔ | ✔ | |||
| Principal National Life Insurance Company | ✔ | ✔ | ✔ | ✔ | ✔ | ||
| Protective Life Insurance Company | ✔ | ✔ | ✔ | ✔ | |||
| Prudential Life Insurance Company | ✔ | ✔ | ✔ | ✔ | |||
| Sagicor Life Insurance Company | ✔ | ✔ | ✔ | ✔ | |||
| Savings Bank Mutual Life Insurance of MA (SBLI) | ✔ | ✔ | ✔ | ✔ | |||
| Transamerica Life Insurance Company | ✔ | ✔ | ✔ | ✔ | ✔ |
Options to Convert
The option to convert a term life insurance policy into a permanent policy, such as Universal Life Insurance or Whole life Insurance, gives policyholders the flexibility to upgrade their coverage without facing further underwriting or medical evaluations. This is due to the fact that the policyholder is guaranteed to maintain the same health rating that they originally qualified for on their term policy.
This means that even if the policyholder's health deteriorates, the insurance company will still provide coverage for life as long as the policy is converted during the available conversion period. The premium required at the point of conversion will be based on the policyholder's attained age but they will be considered in the original health class.
To provide an example, if an individual purchases a 10-year term policy from a company such as Northwestern Mutual at age 27 and qualifies for the highest health rating, they can convert the policy into a permanent policy at any point during the next 10 years without the need for requalifying for the new policy. This applies even if their health status deteriorates and they no longer qualify for the highest health rating.
Some companies like New York Life also provide a "conversion credit" where they will apply a portion of the money paid into the term policy as a credit towards the permanent policy premium. Most insurance companies have some sort of conversion program in place. The key is to understand the different permanent policy options that can be converted to and the duration of the convertibility period offered by the company.
Flexibility of design
Term life insurance policies come in various term lengths, hence the name term life insurance. The range of options available varies from one year to 40 years with most companies offering policies in 5 year increments. However, there are very few companies that sell 5 year term life insurance policies.
The most common options that companies offer are 10, 15, 20 and 30 year policies. Some companies, such as Sagicor and New York Life, cap out at 20 years while others like AIG and New York Life offer 25 year term options. Some companies also offer odd number terms such as 17 years.
Currently, the longest available term on the market is a 40 year term, which is sold by both Banner and Protective. For those who need a term policy that will last longer than 40 years, they can customize a Universal Life policy to last for a longer term, such as 50 or 60 years, but this will come at a higher cost.
During the level term period, the premium is guaranteed to remain level. Once the level term is over, policyholders can choose to keep their policy in force until age 80-95, depending on the life insurance carrier. However, the premium at that point will likely become much higher and may become unaffordable.
Regarding one year term there are two options: renewable and nonrenewable. A Renewable one-year term, often referred to as an Annual Renewable Term (ART) is a policy that starts off lower than a level premium term policy, but rises in cost from year to year. The increases in premium start off slow but the jumps can get quite large as the policy ages.
A non-renewable 1-year term, which is a seldomly purchased option, offers only one year of term life insurance protection and does not continue past the single year it was issued in.
| Company | 1 year | ART | 10 year | 15 year | 20 year | 25 year | 30 year | 35 year | 40 year | Odd Years |
|---|---|---|---|---|---|---|---|---|---|---|
| Sproutt Insurance | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ |
| American General Life (AIG) Insurance Company | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | |||
| American National Life Insurance Company | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ||||
| Assurity Life Insurance Company | ✔ | ✔ | ✔ | ✔ | ||||||
| Banner Life Insurance Company | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | |||
| Guardian Life Insurance Company | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ||||
| Lincoln National Life Insurance Company | ✔ | ✔ | ✔ | ✔ | ||||||
| Mass Mutual Life Insurance Company | ✔ | ✔ | ✔ | ✔ | ✔ | |||||
| Minnesota Life Insurance Company | ✔ | ✔ | ✔ | ✔ | ||||||
| Mutual of Omaha Life Insurance Company | ✔ | ✔ | ✔ | ✔ | ✔ | |||||
| Nationwide Life Insurance Company | ✔ | ✔ | ✔ | ✔ | ||||||
| Penn Mutual Life Insurance Company | ✔ | ✔ | ✔ | ✔ | ||||||
| Principal National Life Insurance Company | ✔ | ✔ | ✔ | ✔ | ✔ | |||||
| Protective Life Insurance Company | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | |||
| Prudential Life Insurance Company | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ||||
| Sagicor Life Insurance Company | ✔ | ✔ | ✔ | |||||||
| Savings Bank Mutual Life Insurance of MA (SBLI) | ✔ | ✔ | ✔ | ✔ | ✔ | |||||
| Transamerica Life Insurance Company | ✔ | ✔ | ✔ | ✔ | ✔ |
Process of Application
The process of applying for life insurance policies can vary widely across different companies and the industry as a whole. Many companies have varying levels of online application options, while some use a combination of online applications, telephone interviews, or interactive questionnaires.
Different companies also offer various options for inputting the application.
Here are some of the most common electronic application methods:
- Fully online application: This method allows either the agent or the customer to fill out the entire application and electronically sign and submit it to the insurance carrier.
- Online application with an online questionnaire: The first part of the application is filled in by the agent and signed electronically by the applicant, and then they will receive an email to complete an online health and wellness questionnaire.
- Online application with a telephone interview: The first part of the application is filled in by the agent, and may or may not be electronically signed by the applicant, and then they will receive a phone call to complete a telephone interview with the insurance company.
It is important to note that the availability of the above methods may vary depending on the insurance company. Some companies may offer all the above methods while others may offer only one or two.
| Company | Fully online application | Online Questionnaire | Telephone interview |
|---|---|---|---|
| Sproutt Insurance | ✔ | ✔ | ✔ |
| American General Life (AIG) Insurance Company | ✔ | ||
| American National Life Insurance Company | ✔ | ||
| Assurity Life Insurance Company | ✔ | ✔ | |
| Banner Life Insurance Company | ✔ | ✔ | ✔ |
| Guardian Life Insurance Company | ✔ | ||
| Lincoln National Life Insurance Company | ✔ | ✔ | |
| Mass Mutual Life Insurance Company | ✔ | ✔ | |
| Minnesota Life Insurance Company | ✔ | ||
| Mutual of Omaha Life Insurance Company | ✔ | ✔ | |
| Nationwide Life Insurance Company | ✔ | ||
| Penn Mutual Life Insurance Company | ✔ | ||
| Principal National Life Insurance Company | ✔ | ✔ | |
| Protective Life Insurance Company | ✔ | ||
| Prudential Life Insurance Company | ✔ | ✔ | |
| Sagicor Life Insurance Company | ✔ | ||
| Savings Bank Mutual Life Insurance of MA (SBLI) | ✔ | ||
| Transamerica Life Insurance Company | ✔ |
Hope you find this article useful. If you have any query or suggestion, please contact us.
>>>> You may like these articles: