Right Life Insurance Coverage: Top 5 Life Insurance Companies

What Is Life Insurance, How Does It Work? | Best Life Insurance

People buy insurance to protect or safeguard their dependent from financial difficulties if the policyholder or insured person dies. Many life insurance products offer policyholders the opportunity to accumulate savings they can use during times of financial strain. If you look at the data, a significant number of American households, about 90 million, rely on life insurance products to ensure their economic security and support their families during times of financial need.

What is Life Insurance?

If you look at Life insurance meaning, it constitutes a formal agreement between a policyholder and a life insurance company. In a life insurance contract, the insurance company commits to provide a specific monetary amount to designated beneficiaries upon the insured person's death. But what do the policyholders give in return? A policyholder pays a regular premium throughout their lifetime against this guarantee.

  • In 2020, Americans purchased $3.3 trillion of New Life insurance coverage, a notable 7.9% increase compared to 2019. By the end of 2020, total Life insurance coverage was $20.4 trillion, marking a rise of 3% from 2019.

  • Life insurance offers multiple purposes, including long-term needs, and immediate financial needs. You can use your life insurance to handle your monthly expenses, settle debts, fund a college education, and support child or dependent care. 

  • Regarding long-term needs, Life insurance is a valuable tool for covering end-of-life expenses, planning real estate, establishing legacy funds, and supporting long-term care.

  • Suicide may not be covered within the initial two or three years of policy issuance.

  • If an insurance company suspects fraud, it may retain the right to contest a claim.

How does Life Insurance Work?

Life insurance begins with preliminary research to identify the most suitable policy according to your needs and situation. You must complete the application process after identifying and selecting the best life insurance policy. However, this step may differ as approval time can vary from insurance to insurance. Some life insurance policies need a medical examination, while others may not. 

Once the policy is activated, you need to make your payment consistently and promptly to maintain an active policy. Regularly check and ensure that the coverage fits your needs. If you die while the policy is in force, your designated beneficiary receives a lump sum amount that they can use for their specific requirements.

Types of Life Insurance

Three main types of life insurance policies exist: Individual Insurance, Group Insurance, and Credit Insurance.

1- Individual Insurance

Individual Life insurance is the most widely used form of life insurance protection. It constitutes 63% of total Life insurance in the United States. Apart from individuals, many businesses also purchase life insurance to protect against the economic loss from the death of the owner or any key employee.

2- Term Insurance

Term insurance policy provides Life insurance coverage for a specified duration, usually over one year. The biggest drawback of these policies is they do not yield any additional benefits after the term expires, and cash doesn't accumulate any value during the period. If the policy is not renewed at the end of the term, the policy lapses, and no payment is made to the beneficiary in the event of death.

3- Permanent Life Insurance

Unlike term insurance, permanent or whole life insurance protects as long as the insured is alive. It also has a saving benefit that helps build value to the cash that can help families meet their financial emergencies.

4- Group Life Insurance

Group life insurance is a contract between an insurance company and a collective group. Some common examples of group Life insurance are employer-provided life insurance and insurance offered through unions and professional associations. The group individuals are issued a certificate that denotes their participation in the group coverage.

5- Credit Life Insurance

Credit Life insurance is specifically designed to settle the outstanding balance. If the borrower passes before completing the repayment term, the insurance company balances on a loan of 10 years or less. This type of insurance protects the borrower's family and the lender. It ensures that any outstanding debt at the time of the borrower's death is covered—life insurance companies issue credit insurance through lenders like banks, finance companies, credit unions, and retailers.

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How is a Life Insurance Premium Calculated? 

Explore the factors used by various insurance companies to determine life insurance rates.

Coverage Types

Life insurance comes in a pair of forms: long-term and short-term plans. Term insurance is cheaper but only there while the policy is active. Those who desire insurance coverage for a set amount of time would benefit most from this package. Then, the parent can purchase a term life insurance, which will provide payment until the child becomes financially independent.

When premiums are paid, a permanent strategy continues until death and frequently contains a savings account. Because permanent insurance is often far more expensive than term policies because there is a greater chance of an eventual payment. Life insurance providers provide a variety of permanent policy options, including:

  • Your entire life
  • Universal life
  • Indexed life on Earth
  • Variable universal life
  • Life insurance with guaranteed issue


Generally, life insurance costs are lower for younger individuals than for older people. Why? Since my life insurance provider determines my premiums based on my expected lifespan, they tend to allocate less value to the insurance contract if the likelihood of me passing away early diminishes.


On average, women live almost half a decade longer than men in the U.S. While calculating the premiums; life insurance firms can also consider certain health issues that affect specific gender groups differently. This way, policyholders are fairly assessed based on their individual risks. Because of this, depending on their age and prior medical issues, women may pay less for life insurance than males.


A medical exam is typically required for life insurance coverage. This is how your insurance provider checks that your application is accurate and that you don't have any prior ailments that might shorten your lifespan. 

Asthma, hypertension, and type 1 diabetes might raise insurance prices. Life insurance will certainly cost less if you stay healthy. If you live healthier, your life insurance premiums may drop. Quitting smoking or exercising frequently may lower your insurance premiums.

Way of life

Insurance firms say lifestyle influences risk. Life insurance companies charge more for risky hobbies and jobs. If you work in a hazardous field, such as cleaning windows in tall buildings, life insurance could be costly and challenging to get cheaper.

You might want to give up if you favour physically demanding pastimes like skydiving, motorcycle riding, bungee jumping, or smoking. Your life insurance premium may decrease if you give up risky activities.


Riders or endorsements offer unique benefits to strengthen a life insurance policy for your requirements. Riders raise your monthly premium but enable you to personalize your life insurance policy to match your requirements and cover particular scenarios. Typical riders on life insurance policies consist of:

  • Rider for long-term care
  • Rider conversion term
  • Premium rider waiver
  • cyclist with a terminal disease
  • income rider with a disability
  • Rider with child benefits

What does Life Insurance Cover?

Life insurance is designed to provide a death benefit to the family. In life insurance policies, beneficiaries receive a sum of the amount after the policyholder's death. The life insurance policy covers the following:

Monthly Bills and Expenses:

The primary purpose of life insurance is to fulfil the financial needs after the policyholder's death, mainly for those who rely on him. After the policyholder's death, the beneficiary can use the money to cover essential bills like groceries, utilities, and child care. There is no general restriction on what kind of expenses the beneficiary can use the money.

Paying Off Debts:

Paying off debts like mortgages and car loans can significantly burden the debtor's death. The responsibility of repaying all these can be challenging. Beneficiaries can use the money they received after the policyholder's death to pay the outstanding debts.

Paying for College Tuition and Education:

Life insurance beneficiaries can utilize the amount to pay college expenses or tuition fees. The death benefit amount can provide significant financial support for the family.

Medical Expenses and Long-Term Care

Life insurance provides monetary support to loved ones after the policyholder's death. It also gives living benefits. Many companies offer accelerated death benefits, which means if a policyholder is diagnosed with any terminal illness, it can provide medical expenses during his lifetime. Such features even reduce the financial strain on loved ones.

How Do You Compare Life Insurance to the Best One?

Comparing Life insurance with the best one can be easy. Many insurers offer free online quotes, so you are just a click away. You can compare according to your needs and buy the policy on the same day; remember some points before buying one.

  1. Shop Around: Compare quotes from three to four insurance companies to get the best possible price that fits your needs. Understand which Life insurance coverage is helpful to you and build a robust Life insurance plan.

  2. Compare Coverages: Select the policies that give you the same coverage. There is ample life insurance coverage available to you from many companies.

  3. Consider extra: Check every feature of each policy. Look for free life insurance riders, as some Life insurance coverages offer this feature while others may not. You can even customize your policy according to your needs.

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Top 5 Highest-Rated Life Insurance Companies in the USA

Life insurance is a significant part of managing finances. It is not just a saving but a security for a family that helps them during hard times. Here are the highest-rated life insurance companies in the USA that help people find a policy according to their needs and alleviate concerns about their families even after their demise.

New York Life Insurance Company

New York Life Insurance Company is the most extensive in the USA. In addition to its Life insurance, it offers long-term care insurance, annuity, and mutual funds. Moreover, the company also operates an investment management business.

NorthWestern Mutual Fund

NorthWestern Mutual Fund is the second largest insurance company in the USA. It holds a significant share of the American insurance market. Apart from Life insurance and various other insurance products, it also offers annuity, investment products, and financial planning. The company has eventually committed to providing value to its policyholders.

Metlife Insurance Company

MetLife, also known as Metropolitan Life Insurance Company, is a publicly traded company on the New York Stock Exchange. It is a prominent insurance and financial product company. It is the third-largest life insurance company in the American insurance market. It also offers Life insurance products and term life groups, universal life groups, variable universal life insurance, and accidental death plans.

Prudential Financial

It was founded in 1875 and operates in over 40 countries all across North and South America, Europe, and Asia. It is a publicly traded financial company that manages diverse portfolios like insurance products, annuities, mutual funds, investment Management services, and other financial offerings.

Lincoln National Corp

It is a financial services company mainly operating in the USA. It provides various financial products like life insurance products, long-term care insurance products, and retirement plan services.

What Affects Your Life Insurance Premiums?

Life insurance companies consider several factors before selling a policy. Here are some of the few factors that significantly impact the policy premiums.


It is a significant factor in determining the premiums of life insurance. Young policyholders enjoy lower premiums as they have more years to contribute to their policy, which makes it less risky for the insurance company. Also, as you age, you are likely to fall more ill or have health issues, which ultimately increases the insurance premium.


Health is an essential factor that primarily influences the insurance premium for you. Many insurers require the applicants to undergo a medical examination. The primary focus is to assess the health status as insurance companies want to reduce the associated risk. If an applicant has a history of medical conditions like heart disease, High blood pressure, diabetes, or cancer in that case, it can lead to a higher premium than one with a clean health history.


The insurance company also considers risky activities like skydiving, mountain climbing, race car driving, etc, as these activities increase the risk of death. Therefore, an individual engaged in such activities pays a higher premium. Also, insurance companies consider factors like smoking, heavy drinking, and lack of self-care to decide the premium rates.


Individuals involved in high-risk professions like fire fighting, professional stunt, active military service, pilot, police work, construction work, etc, end up paying a high premium on their life insurance policy. Specific jobs lead to physical harm, and insurers consider these occupations while selling a life insurance policy.

How long is the grace period for insurance premiums? 

Insurance grace periods differ based on the provider, the contract, and state laws. They may endure for a day or thirty days. Health insurance companies offer a generous grace period of about ninety days, while vehicle insurance companies provide a shorter window of only ten or twenty days. 

The grace period is like a little extra time gift from the insurance company. It's the time you have beyond the deadline to pay your premiums without losing your coverage. Insurance usually allows a 15 to 30-day grace period. Pay up on time or face the consequences. If you don't send in your money on time, there will be consequences. For example, Nationwide charges a late fee; the specific amount varies by state.

What happens if I pay the premium after the due date?

There are often no late fines if your premium is paid after the deadline but within the grace period. Sometimes, even if you pay within the grace period, health insurance providers may still penalize you for late payment. Miss a payment, lose coverage, and wait a year to get it back. If you miss a payment, you lose coverage for half a year. All previously paid premiums will be forfeited if the coverage fails. 

Final Words

Initially, acquiring a life insurance policy may be hectic for you. Still, you may be relieved knowing it will financially safeguard your family if you meet an unexpected event. Life insurance is a contract between an insurance company and a policyholder. The insurance company guarantees the policyholder that they will pay a set amount after their demise.

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30 Dec, 2023


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