What makes a company the best?
Okay, I admit saying something or someone is the best is often arbitrary. But, with my 30 plus years of experience in the life insurance industry, I feel qualified to speak on this subject.
Like most things that people purchase, they want the lowest cost, the best service, the safest company, the most options, etc. Life insurance is no different.
Often times people purchase life insurance from a company just based on the lowest rate they see online. Of course, low rates are one of the most important factors when buying term life insurance. But, there are other things to consider when trying to determine the best term life insurance company. Let’s discuss some of those other factors:
- Underwriting– underwriting is the process in which an insurance company evaluates risk. It is important to remember that all life insurance companies underwrite health and lifestyle differences. So, what one company may evaluate as a preferred risk another company may evaluate totally different. Health conditions such as diabetes, heart disease, cancer, anxiety, etc. can often time preclude you from qualifying from a certain company. It’s important to know that what one company might decline for coverage another might offer standard rates.
- Product Choice– often times carriers only offer one or two particular term policies, whereas another company may offer multiple choice in product selection. As an example, many companies offer 10, 15, 20 or 30 year level term policies. But, let’s say you want term coverage for 25 years. Do you just take the lower cost 20-year policy or the higher cost 30 year policy? In this case, the 20 year term wouldn’t cover you for as long as you want and the 30 year term would cost you more in premium. Make sure you have a choice.
- Conversion Option– Often an overlooked option with term life policies. This option can be invaluable if you decide you wish to continue your coverage longer than originally planned. Its real value comes into play if your health has changed during the period you have held the policy. The option allows you to convert all or any portion of the death benefit to a level premium plan option with no medical exam or health questions. Here’s an example. Let’s say you purchased a 10 year guaranteed level premium term policy 10 years ago. You have come to the end of the term and your rates are about to explode higher if you keep the term policy. You want to keep the coverage for another 10 years. But, the probability is 5 years ago you had to heart by-pass surgery and know that qualifying for new coverage could be quite difficult. If you have the conversion option on your current policy you don’t have to worry about qualifying for new coverage.
- Financial Strength– It goes without saying that most people want a company that has been around for many years and offers financial strength. Do you really want a company that offers low rates, but may not be in business when you need them?
- Agent communication– So, this is a little bit off the subject, but the agent that represents the company you choose should be someone you can easily get a hold of and discuss your protection. As we know almost anything can be done online. But, when purchasing life insurance you want to use a company that offers agent access when you need them. After all who wants to try and call a 1-800 number or negotiate the home office voice mail runaround when the time comes to report a death claim or change an option with your policy.
Top 10 carriers
Of course, as times change then often times the best carriers change and move around. But, as of the date of this column here are my suggestions for the top term life carriers based on the criteria mentioned above. All term life insurance carriers have plus and minuses, but any of the companies below in no particular order meet most of the criteria:
- Banner Life
- American General Life
- Protective Life
- Principal National Life
- Cincinnati Life
- Lincoln National Life
- Ohio National Life
- John Hancock
- United Of Omaha
Remember rates are important with term life insurance protection, but other factors should also come into play. A good independent life insurance agent who represents multiple carriers can help you find the best coverage for your situation.
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