The Best Whole Life Insurance Companies: Who Should You Choose?

What Is Whole Life Insurance?

Whole life insurance is insurance for your ‘whole life’ or lifetime. As long as you pay your premiums, the death benefit doesn’t expire.

In addition, whole life insurance accrues a cash balance. Your premium payments are higher since they cover not only the death benefit premium but the portion of your payment that gets invested too.

Key Features & Benefits

Protection for life

Whether you die a year from now or 40 years from now, you don’t have to worry about your whole life insurance expiring.

As long as you pay the premiums, your beneficiaries will receive the full death benefit.

Guaranteed death benefit

Your death benefit doesn’t change from the day you sign up for the policy. Your beneficiaries have a guaranteed amount coming to them should you pass away.

Choose the death benefit amount wisely based on your family’s financial need not only now, but in the future as well.

Fixed premiums

Your premiums never change. This makes it easy to budget/predict your insurance costs throughout the life of the policy.

The policy premiums won’t change even if your health status, lifestyle, employment status, or anything else does.

As long as your policy doesn’t expire due to non-payment, your premiums remain the same for your entire life.

Cash value

A portion of your premiums accrues a cash balance, which your insurance company invests for you.

As the balance increases, you may be able to borrow against it, withdraw the funds, or use the funds to cover your premium payments.

Legacy benefits

If it’s your desire to leave a legacy behind for those you love, especially a child with special needs or an important charity in your life, whole life insurance ensures the benefit will always be there no matter how long you live.

The policy never expires and your death benefits never change, giving you peace of mind that your loved ones will be taken care of even upon your passing.

Whole Vs Term Life Insurance

Choosing between whole and term life insurance is a big decision, one that’s based on affordability, personal preference and financial goals.

Term life insurance

Term life insurance provides only death benefits. If you die within the specified term (typically 10, 20, or 30 years), your named beneficiaries receive the specified death benefit.

For example, if you took out a 20-year term life policy for $100,000 and you died after 15 years, your beneficiaries would receive $100,000 upon your passing.

Term life insurance expires at the end of the chosen term. If you still want coverage, you have to either renew the policy (if the company allows it) or choose a new policy.

Either way, you must undergo another medical exam and you’ll likely pay higher premiums because you’ll be older and possibly have ‘other’ health issues.

Whole life insurance

Whole life insurance provides death benefits PLUS a cash benefit. The death benefit works the same as a term policy; however, the benefits never expire.

The policy is good for your ‘whole’ life. You don’t have to worry about expiring terms or reapplying for a new policy.

The cash portion of the policy builds value over time. You get a guaranteed rate of return and the earnings compound but at a slow rate.

The average person takes 12 to 15 years to build a value worth any talking about.

Choosing between a term and whole life insurance policy is a personal decision, but you should always consider the following:

• Your age and overall health.
• Your retirement goals.
• Your desire to leave legacy benefits.
• Your current and future financial status and goals.
• Your ability to save/invest for the future in other tax-advantaged accounts, such as an IRA, 401K or employer pension.

Premiums & Costs

Whole life insurance can cost as much as four to five times the cost of term life insurance.

Insurance companies take a serious risk when they provide whole life insurance.

Unlike term insurance, which expires after a specific period, whole life insurance lasts your ‘whole life.’

In other words, there’s a 100% chance the insurance company will have to pay out benefits someday.

No medical exams required

Not only is there the risk of payout, but most whole life insurance policies don’t require a medical exam, again, since you have coverage for your lifetime.

Without a medical exam, insurance companies don’t know how soon they may have to pay out on your policy.

The other component of whole life insurance is the cash value it builds. Since your premium covers both the death benefit and the cash component of the policy, it makes sense that it costs more.

Without the higher premiums, it would take a lot longer than it already does to build decent cash value.

Sample Rates

The premiums you pay for whole life insurance depend on the amount of coverage chosen as well as the type of policy.

For example, there are policies that are payable until you are 65 years old, 99 years old, and 121 years old.

The shorter the ‘payment period’ that you choose, the higher your premiums will be since you need to cover the premiums for a lifetime.

For example, the average healthy non-smoking male would pay $122 per month for a policy payable until age 65, $99 per month for a policy payable until age 99, and $82 per month on a policy payable until age 121.

Best Whole Life Insurance Companies

MassMutual

What We Like

MassMutual pays out cash dividends on an annual basis to policyholders which you can either withdraw or reinvest. Anytime MassMutual has a good year, policyholders do too.

They have a large selection of insurance policies, including policies that don’t require a medical exam and have guaranteed coverage.

What We Don’t Like

MassMutual’s insurance rates tend to be quite high for seniors and smokers.

You also have to make a lot of choices when choosing your plan, as they offer many plans and that can complicate the process.

Policies Available

• Legacy 100 – Your premiums remain level until you hit age 100. If you’re lucky enough to still be alive, your premiums may increase at this age.
• Legacy 65 – Your premiums remain level until you hit age 65. After 65, your premiums may increase, which may make them harder to afford.
• Legacy 20 – You pay off your entire life policy in 20 years.
• Legacy 10 – You pay off your entire life policy in 10 years (this policy has the highest premiums).
• Legacy High Early Cash Value – You pay the largest portion of your premiums in the first year, so your cash value accumulates a lot faster than it would with any other policy.
• Simplified Issue Whole Life Insurance – This policy covers your final expenses, but doesn’t have a specific term – it lasts for your lifetime.

The Verdict

MassMutual has an A++ rating with A.M. Best and consistently pays dividends to its policyholders each year.

It’s a solid company to get life insurance from, especially if you can afford the premiums to pay for a Legacy 20 or Legacy 10 plan.

Northwestern Mutual

What We Like

Northwestern Mutual offers incredible customer service and pays dividends to its whole life insurance policyholders.

The premiums remain level for your lifetime and they offer a waiver of premium rider that helps cover your premiums should you become disabled. Northwestern also offers competitive rates, even for seniors.

What We Don’t Like

It’s often hard to qualify for Northwestern Mutual’s ‘best rates’ especially since they don’t specify what qualifies as ‘best health.’

They also don’t offer online quotes, so you’ll have to speak to someone to get a rate, which means dealing with a salesperson.

Policies Available

Northwestern Mutual doesn’t advertise their whole life policies. You have to speak to an insurance agent to determine which policies would suit your needs the most.

The Verdict

Northwestern Mutual has an A++ rating from A.M. Best and is one of the largest insurance companies in the United States.

They are worth looking into when comparing rates for your whole life insurance needs.

Guardian Life Insurance

What We Like

Guardian offers a large selection of whole life insurance policies along with a great number of riders including long-term care rider, accelerated benefit, waiver of premium, plus paid-up additions which allows you to increase your death benefit and/or the cash value of your policy.

What We Don’t Like

Even though Guardian Life often pays out dividends, they have a direct recognition plan, which means if you have any outstanding loans on your whole life policy, you don’t receive the full dividend.

The amount you receive depends on your outstanding loan amount.

Policies Available

As we said above, Guardian offers a large number of policies including:

• Level premium whole life – You pay premiums to a specific age, namely 95, 99, or 120.
• Limited pay whole life – You pay premiums for ‘part of your life,’ name 10 or 20 years (but the premiums are much higher)

The Verdict

Guardian Life Insurance has an A++ Rating from A.M. Best. They have also consistently paid out dividends in their 150 years of business.

They offer a variety of options that can be great for those on a limited budget or those that want to pay their life’s premiums in a short period.

Mutual of Omaha

What We Like

Mutual of Omaha offers dividend payments to its policyholders, but of course, they aren’t guaranteed.

They also offer whole life policies for children. Mutual of Omaha ranks high in customer service and offers affordable rates that don’t increase.

What We Don’t Like

Mutual of Omaha’s policy limits are low. They offer death benefits of $2,000 – $25,000 for online applications and up to $40,000 in benefits if you apply with an agent.

They also have graded death benefits – if you die within the first two years of buying the policy, your beneficiaries receive 110% of the premiums paid up to that point.

Policies Available

Mutual of Omaha offers one whole life insurance policy for people ages 45 – 85 in amounts ranging from $2,000 – $25,000 ($40,000 if you apply with an agent).

They don’t require a medical exam but they do require a medical questionnaire completed by you.

The Verdict

Mutual of Omaha has an A.M. Best rating of A+, offers dividend payments, and provides affordable coverage for simple whole life insurance needs.

State Farm Whole Life Insurance

What We Like

State Farm offers a variety of payment options including single premium (pay at once), premiums spread out until age 100, or premiums payable for a certain number of years.

They also offer dividend payments to whole life insurance customers; however, the payments aren’t guaranteed.

State Farm also allows loans against your whole life insurance balance.

What We Don’t Like

State Farm does tend to have higher premium rates than many other life insurance companies.

Their standard policy has a minimum coverage amount of $100,000, which may be more than some people need.

Policies Available

• Limited pay life – You pay premiums for a ‘limited time.’ Choose from 10, 15, or 20 years, but receive benefits for life.
• Single premium life – You pay the entire premium in one lump sum but have coverage for life.
• Final expense – A smaller policy that covers final expenses, such as burial, funeral, or final medical expenses.

The Verdict

State Farm’s specialties are homeowners and auto insurance, but they are a financially stable company with a variety of options. Because they charge higher premiums, it’s important that you shop around to ensure you get the best rate.

MetLife Whole Insurance

What We Like

MetLife pays dividends to policyholders (when able) and they offer exceptional customer service.

Their whole life insurance policies are also one of the top programs that offer riders that provide more coverage to the basics of whole life.

The riders include Accidental Death, Enrichment Rider (add more coverage down the road), and Enhanced Care.

What We Don’t Like

MetLife whole life insurance policies are only available as a group policy through your employer.

They also don’t offer a whole host of payment options since it’s a policy through your employer. This means you can’t pay with a debit or credit card.

Policies Available

• MetLife Promise PWL – You pay premiums for 100 years
• MetLife Promise PWL 120 – You pay premiums for 120 years
• MetLife Promise PWL 10 – You pay premiums for 10 years
• MetLife Promise PWL 20 – You pay premiums for 20 years
• MetLife Promise PWL 65 – You pay premiums until you are 65 years old

The Verdict

MetLife has an A+ rating with A.M. Best and is a good option if your employer offers it.

As long as you don’t rely on automated payments via debit/credit card, they offer affordable premiums and great customer service.

Transamerica

What We Like

Transamerica offers whole life insurance policies up to $2,000,000, making it easy for people of all income levels to get the coverage they need/desire.

You can secure Transamerica whole life insurance products up to age 85.

What We Don’t Like

Most policy changes or administrative tasks must be completed by mail with Transamerica rather than online like other companies.

They also take an exceptionally long time to approve/decline an application for life insurance.

Policies Available

Transamerica offers policies from $25,000 to $2,000,000. They also offer a variety of riders including child protection, accelerated death, and accidental death benefit riders to help further your benefits.

The Verdict

Transamerica has an A rating from A.M. Best and has been in business since 1904 making it a decent contender in the whole life insurance industry.

If you have time to wait for an answer on your application, they do offer some of the highest coverage amounts.

New York Life

What We Like

New York Life consistently pays out dividends to its policyholders. They also offer a variety of riders to help improve your benefits, such as Disability Waiver of Premium, Option to Purchase Paid-up Additions, and Accidental Death benefits.

What We Don’t Like

You have to speak to a professional to get quotes and learn more about the insurance, although their website does offer limited information for you to gather on your own.

The level of customer service can vary depending on which agent you work with, in your area.

Policies Available

Value Whole Life 

You get guaranteed death benefits for life, but your premiums remain affordable. This is a great policy for those close to retirement that may not have enough coverage set up yet.

Whole Life

This is traditional whole life insurance that has guaranteed life insurance (death benefits) plus cash accumulation which may help supplement your retirement income down the road.

Custom Whole Life

You choose your premium payable period and how fast your cash value grows. You choose the policy based on your future needs/desires as well as what you can afford.

You can choose short premium payable periods, such as 5 years or stretch it out to make premiums more affordable.

The Verdict

New York Life is the third-largest life insurance company in the United States and has an A++ A.M. Best rating.

They offer a nice selection of whole life insurance products at varying premium levels making it easy for many to find the right policy.

Penn Mutual Whole Life

What We Like

Penn Mutual has a long history, as they’ve been in business for 173 years and have consistently paid out dividends to their policyholders.

They offer guaranteed death benefits, guaranteed level premiums, and guaranteed cash accumulation.

Penn Mutual also offers a large selection of riders including chronic illness, waiver of premium, and accelerated permanent paid-up additions.

What We Don’t Like

If you have an outstanding loan on your cash accumulation, you’ll receive reduced dividends until you pay the loan off in full.

Policies Available

Penn Mutual offers a few whole life insurance policies with varying payment options including:

• Ordinary whole life insurance with premiums payable until 100 years old.
• 20-pay whole life insurance with premiums paid off in 20 years.
• Paid-up at age 65 with premiums payable until you are 65-years old.

The Verdict

Penn Mutual has a long history and an A+ A.M. Best rating.

They are a viable solution for most people but always shop around to see if they offer the best rates given your current life situation, health, and future insurance needs.

Gerber Whole Life Insurance

What We Like

You can secure a Gerber whole life insurance plan without a medical exam if you are younger than 51-years old and need less than $100,000 less in coverage.

It’s a great option for those in less than perfect health that need decent coverage. They offer level premiums, which means your premium never changes.

What We Don’t Like

You may only apply for Gerber whole life insurance before you turn 70 and if you are over age 51 or need more than $100,000 in coverage, a medical exam is required.

If you have any health issues, you may be declined or pay higher premiums.

Policies Available

Gerber offers whole life policies from $50,000 to $300,000. If you borrow against your cash value, they charge an 8% interest rate. 

The Verdict

Gerber whole life is good for those that may have health issues that wouldn’t pass a standard health exam, as long as you are under age 51.

Current customers rank their customer service high and their premiums are in line with many other insurance providers.

Finding The Best Quote

Finding the best whole life insurance quote means looking at a variety of factors.

You can’t compare two policies with different benefits and make a decision that way. Instead, consider the following:

Choose the right amount of coverage

The coverage amount directly affects your premiums.

Make sure you choose a policy that provides an adequate death benefit that covers your needs, whether you need to supplement a spouse’s income, support children, pay for college, or leave a legacy.

Try comparing policies with the same coverage amount so that you compare ‘apples to apples.’

Look at the return on cash value

Each insurance company provides a different ‘guaranteed rate of return’ on the cash value. This determines how fast (or slow) your cash value accumulates.

Getting the best rate

Like any insurance, the fewer risk factors you show, the more likely you are to get the best rates.

Typically, the younger you are, the better health you are in, and the safer your lifestyle, the better rates you get.

Compare prices

Make sure you compare prices from multiple policies but look closely at what each policy offers.

For example, if you compare a $50,000 policy with a $100,000 policy, the $50,000 may look cheaper, but it doesn’t offer as much coverage.