Best whole life insurance companies of November 2023
“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.
“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.
BLUEPRINT
Updated 1:02 p.m. UTC Nov. 1, 2023
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State Farm is the best whole life insurance company, according to our analysis.
We evaluated top insurers to determine the best whole life insurance based on cost competitiveness, access to cash value, reliability of policy illustrations, financial strength and historical performance.
The best whole life insurance companies of 2023
- State Farm: Best for cash value cost competitiveness
- Northwestern Mutual: Best for reliable policy illustrations
- Ohio National: Best for historical performance
Why trust our life insurance experts
Our team of experts evaluates hundreds of insurance products and analyzes thousands of data points to help you find the best product for your situation. We use a data-driven methodology to determine each rating. Advertisers do not influence our editorial content. You can read more about our methodology below.
- 28 insurers evaluated
- 42 policy features analyzed
- 5 levels of fact checking
Top-rated whole life insurance companies
State Farm
Northwestern Mutual
Ohio National
Penn Mutual
Methodology
- Cost competitiveness of cash value policies: 60 points. We looked at internal policy costs, such as administrative fees and policy charges, to determine the competitiveness of permanent life policies offered by insurance companies in our review.
- Historical performance: 5 points. Our analysis took into account the historical performance of the life insurance company’s investments to determine how an insurance company’s performance and therefore cash growth potential compared to others.
- Reliability of policy illustrations: 10 points. We evaluated the accuracy of each life insurance company’s policy illustration, a document that shows projected cash value growth, to determine which companies provided the most reliable outlooks.
- Financial strength: 10 points. There are four major rating agencies — AM Best, Fitch, Moody’s and Standard and Poor’s — that evaluate an insurer’s financial strength, a factor that indicates an insurer’s ability to pay out a claim years from now. We took this into consideration to account for the likelihood an insurance company is able to meet claim obligations.
- Access to cash value: 15 points. Cash value policies grow at different rates, and we factored the liquidity of a cash value policy into our analysis. Some policies have a cash value that grows faster in the early years. Others have slower cash value growth in the early years, and policyholders must wait a significant period of time before having access to a sizable cash value. Whole life insurance policies with cash value that grows faster in the early years received more points.To evaluate life insurance companies, we used data provided by Veralytic, an independent publisher of life insurance research and analytics, and AccuQuote, a national online insurance agency.
Why some companies didn’t make the cut
Of the insurance companies we evaluated, four were determined to be the best whole life insurance companies, according to the factors we weighed. Companies with high policy rates, growth-prohibitive internal costs or a poor historic performance were less likely to make the cut. The same is true for companies that did not provide reliable policy illustrations for permanent life insurance policies or had a high level of consumer complaints.Best whole life insurance companies
According to our analysis, the best whole life insurance company is State Farm.
What is whole life insurance?
Whole life insurance is a permanent life insurance policy with the following features:
- Coverage that lasts your lifetime, as long as you pay your premiums.
- A guaranteed premium, meaning your payments won’t go up over time.
- Guaranteed death benefit.
- Cash value you can access while alive.
- Guaranteed rate of return on the cash value account.
How does whole life insurance work?
When you purchase a whole life insurance policy, you make premium payments in exchange for coverage that will last your lifetime. In most cases, a whole life insurance policy also includes a cash value component.
If you die and your policy is in good standings — meaning your premium payments are current — your beneficiary will receive a guaranteed death benefit. You can choose more than one beneficiary to receive the death benefit and dictate how the benefit is divided. For instance, you could leave your spouse 50% of the death benefit and two children 25% each.
The cash value of your whole life insurance policy will accumulate over time according to the policy’s guaranteed rate of return. When enough accumulates, you may be able to use it to cover your premium payments or borrow against, depending on your policy terms.
Who needs whole life insurance?
Whole life insurance is best if you want a policy that doesn’t expire — as long as you pay your premiums — and offers an additional savings vehicle.
Mark Friedlander, the director of corporate communications at the Insurance Information Institute, echoes this sentiment.
“Permanent life insurance is ideal for a consumer who wants life insurance for as long as they live,” he says. “They’re also best for those who want lifetime protection since you never have to worry about renewing or outliving your coverage.”
Whole life insurance can also be a good fit if you want to:
- Cover end-of-life expenses, such as funeral costs, regardless of when you die.
- Cover estate taxes, especially if your estate exceeds the federal estate tax or you live in a state with lower state tax limits.
- Build a trust or inheritance to provide for your children after you die or leave them with a lump sum of cash as an inheritance, though you may want to speak to a financial advisor who can determine if this is the best option for your intentions.
- Create a business continuity plan for a business partner that uses the death benefits as part of a buy-sell agreement, allowing the surviving partner to purchase the other’s share.
Still, whole life insurance isn’t for everyone.
Whole life insurance also may not be the right choice if you’re only looking for life insurance coverage for a specific period of time, such as until you pay off your mortgage, your spouse’s retirement benefits kick in or your child finishes school. In that case, a term life insurance policy may be a better, more affordable option.
How much does whole life insurance cost?
Whole life insurance rates are higher than term life insurance rates because of the duration of coverage and the cash value component.
How much you pay for a policy will depend on a number of factors, including your age and gender. The younger you are, the lower your rate will be, and men typically pay more for a whole life insurance policy than women.
For instance, a 30-year-old woman can expect to pay an average of $180 a month for a $250,000 policy, based on our analysis. If that same woman waited until she was 40 to purchase the policy, her rate would increase to $262, per month on average.
A 30-year-old man in good health purchasing a $250,000 policy can expect an average monthly premium of $201 a month. At 40, he’d pay about $293 for whole life insurance.
Whole life insurance rates
Here are the average monthly premiums for whole life insurance policies of different coverage amounts, by age and gender.
| Whole life insurance buyer | $250,000 in coverage | $500,000 in coverage | $1,000,000 in coverage | LEARN MORE | ||
|---|---|---|---|---|---|---|
| Female, 30 | $180 | $352 | $697 | Compare Rates | Compare quotes offered by participating partners | |
| Female, 40 | $262 | $506 | $1,005 | Compare Rates | Compare quotes offered by participating partners | |
| Female, 50 | $387 | $752 | $1,496 | Compare Rates | Compare quotes offered by participating partners | |
| Male, 30 | $201 | $394 | $781 | Compare Rates | Compare quotes offered by participating partners | |
| Male, 40 | $293 | $564 | $1,121 | Compare Rates | Compare quotes offered by participating partners | |
| Male, 50 | $445 | $847 | $1,686 | Compare Rates | Compare quotes offered by participating partners |
It’s important to note that policy premiums only tell a part of the “cost” story. When considering a whole life insurance policy, you should also look at:
- Internal policy fees and charges.
- The portion of your premium that goes toward your cash value account.
Ask the insurer for a detailed expense page that allows you to compare not only your premium, but internal fees as well.
Factors that impact the price of whole life insurance
How much you’ll pay for whole life insurance will depend on several factors, including your:
- Age and gender.
- Height and weight.
- Medical history.
- Medical history of your parents and siblings.
- Prescription history.
- Nicotine and marijuana use status.
- Substance abuse.
- Credit history.
- Desired amount of whole life insurance.
- Add-ons or riders selected.
- Hobbies or profession, if considered high-risk.
- Driving record, especially high-risk risk offenses like DUIs or speeding tickets.
According to the 2023 Insurance Barometer Study by Life Happens and LIMRA, only a quarter (24%) of people correctly estimated the true cost of a policy for a healthy 30-year-old, which is around $200 a year. More than half of Gen Z adults (55%) and 38% of Millennials thought it would be $1,000 or more.
How much whole life insurance do I need?
Your whole life insurance coverage needs are unique to your financial situation and your reasons for wanting coverage. There are several considerations that can help you determine how much coverage you need, including:
- How much of your salary you’d want to replace and for how long.
- Any debts you want to be covered, such as a mortgage, child care expenses or tuition.
- End-of-life expenses you want to be covered, such as the cost of a funeral.
- Any intention to use life insurance as an inheritance or trust.
- Existing assets, such as savings or retirement accounts that may reduce your whole life insurance needs.
How to choose the best whole life insurance company
If you’re thinking of purchasing a whole life insurance policy, there are a few key steps you can take to ensure you find the best policy and plan.
1. Decide how much whole life insurance coverage you need. Alison Salka, Ph.D., senior vice president and director of research at LIMRA, suggests the best place to start is by understanding what your financial goals are. Ask yourself what you want this product to accomplish for you.
You can start with a needs assessment on your own, but Salka recommends working with a financial professional who can take a holistic look at your entire financial picture to see how life insurance fits. That’s particularly true for permanent life insurance products, she says, since they can be more complex than term life insurance.
As mentioned above, there are several factors that dictate how much whole life insurance you need, including your income replacement goals, existing debts, existing assets and any other intentions you may have for the death benefit, such as covering a child’s tuition or your funeral expenses.
2. Evaluate insurance companies. Doing online research is a great way to start your search. You can also reach out to friends and family or a financial expert for feedback and recommendations.
Once you have a list of potential insurers, turn to websites like AM Best to check each whole life insurance company’s financial strength rating, which will tell you the likelihood of a company being able to pay out on a life insurance claim.
3. Get and compare life insurance quotes. Get quotes from each whole life insurance company on your shortlist, making sure to request quotes for the same type and amount of coverage.
Some whole life insurance companies offer online quotes, though you may need to speak directly with an agent to complete the quote process.
Don’t stop at comparing whole life insurance rates, however. Extend your comparison to include any internal fees charged by the life insurance company, as these can reduce the portion of your premium that goes toward the cash value of your policy.
4. Compare policy features and benefits. If you’re having a tough time narrowing down your options, even after comparing rates and fees, take note of any features and benefits available. One whole life insurance company may include some add-ons with a policy while another might charge an additional fee for the same riders.
Is whole life insurance worth it?
Whole life insurance may be worth it if you want coverage for life and a cash value component that grows tax-deferred and can be tapped into while you’re alive.
If a cash value component is important to you but you want more control over how it grows, consider other permanent life insurance policy types, such as variable life insurance or universal life insurance.
If you only want life insurance coverage for a short period of time, such as 20 or 30 years, consider a term life insurance policy. Term policies are cheaper than permanent life insurance options, though they don’t carry a cash value component.
Whole life insurance: Pros and cons
Alternatives to whole life insurance
Whole life insurance isn’t for everyone, and there are plenty of alternatives that may better suit your financial needs or long-term goals. Here are a few options worth considering.
- Other permanent life insurance products. Universal life, variable life and other similar products provide lifelong coverage and a cash value component.
- Term life insurance. You may want to consider choosing term life insurance if you only want to lock in your life insurance rates for a specific amount of time, you have a limited budget or you have other investment vehicles your loved ones can rely on after your death.
- Traditional or Roth IRAs. These individual retirement accounts allow you to save up to $6,500 ($7,500 if you’re 50 or older) annually, according to current IRA contribution limits. The account is designed to accommodate your financial needs during retirement, but you can name a beneficiary who could receive the funds and then use them much like they would a life insurance death benefit.
- Employer-sponsored 401(k) plans. Like IRAs, a 401(k) caters to your retirement needs but the funds can be left to a beneficiary if you die before depleting the account. The beneficiary can use these funds to cover expenses as needed.
- Fixed annuities. Fixed annuities are investment accounts that offer a specific rate of return and stream of income during your retirement years. Like other retirement accounts, the funds can be left to a beneficiary to use as a death benefit.
Whole life insurance pays a death benefit for your beneficiaries when you die, no matter your age, as long as you are current on your payments. In addition, whole life insurance also has a cash value component that you can withdraw or borrow from while you’re alive.
Term life insurance allows you to lock in your premiums for a specific period of time, or term. Your beneficiaries will only receive the death benefit if you die with that term, unless you renew your policy or convert it to a permanent life insurance policy.
Yes, in most cases you can still get life insurance if you’re one of the millions of United States residents who have contracted COVID-19. However, depending on when you were diagnosed with the virus and when you’re applying for life insurance, the underwriting process may take longer.
In some cases, your premiums may also be affected. This is particularly true if you have an underlying condition that can worsen after a COVID infection or one that was triggered by your bout with the virus.
Cash value is the savings component of a permanent life insurance policy. When you purchase cash value life insurance, a portion of your premiums will go toward the cash value account. The cash value grows over time, and you can access it while you’re alive.
Cash value growth depends on the type of life insurance policy you have. The cash value of a whole life insurance policy grows at the fixed rate of return determined by the insurer. If you have a variable life insurance policy, you make decisions about how the money is invested, and the account can grow or decrease based on how those investments perform.
It’s best to buy whole life insurance when you are younger, such as in your 20s or 30s, as you’ll be able to secure lower rates. For instance, a 30-year-old woman pays an average of $180 for a $250,000 whole life insurance policy, while a 40-year-old pays an average of $262 for the same amount of coverage.
The best way to decide between a term life insurance and a whole life insurance policy is to examine your budget and reason for purchasing coverage.
If you’re on a tight budget but want to secure some type of life insurance coverage, a term life insurance policy will be more affordable. Term life insurance also is a good option if your goal is to maintain coverage for a specific period of time, such as until a child graduates school.
A whole life insurance policy is a better option if you want coverage that will last your lifetime or if you simply don’t want to worry about renewing your policy. It’s also a better option if you want access to a cash value component that you can access while you’re alive.
For a $250,000 whole life policy, a 30-year-old woman can expect to pay $180 per month and a 30-year-old man will pay $201 per month on average.
Yes, you can usually take a tax-free loan from the cash value of your whole life insurance policy.
Loans from your policy need to be repaid, with interest. Failure to do so will reduce the death benefit.
Single premium whole life insurance is a type of life insurance policy that requires a single premium payment. Instead of making regular payments, such as on a monthly basis, you pay for the policy in full, up front.
Learn more about life insurance
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
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