Best whole life insurance companies

What is whole life insurance?

Whole life insurance is a type of life insurance policy designed to provide coverage for the entirety of your life as long as you pay the premiums. This is different from term life insurance, which usually only lasts for a set period of time, usually between 10 and 30 years. Permanent policies pay out a death benefit to your beneficiaries after your death. Death benefits on whole life insurance policies vary greatly, from as little as $10,000 to over $1 million, depending on your needs and the amount you qualify for and choose.

Whole life insurance living benefits

In addition to a policy's death benefit, it is often possible, depending on your insurer, to add living benefits to your policy as riders. A living benefit rider is an optional added provision that gives your policy more functionality while you are still alive. Here are some of the most common living benefit riders available to policyholders:

• Accelerated death benefit: Sometimes called a terminal illness rider, this policy add-on makes it so you can use some of your policy death benefits while you still live if you have been diagnosed with a qualifying, generally terminal, medical condition. This can help policyholders to pay medical bills and handle their financial arrangements before passing away. However, any money used like this will be subtracted from the death benefit after the policyholder has died. 
• Chronic illness rider: This rider allows you to access your policy’s death benefits if you are diagnosed with a chronic illness, such as Alzheimer’s disease, that reduces your ability to function in daily life. You will need a doctor to certify that you are unable to complete at least a few of the activities of daily living (ADLs).
• Critical illness rider: Similar to a chronic illness rider, you may be able to access some or all of your death benefit if you have a critical illness. Common illnesses that insurers will consider include heart attacks, strokes and cancer. Your doctor will need to certify your medical condition.
• Long-term care rider: If you need home care or move to an assisted living facility, this rider allows you to use your policy's death benefit to pay for your care. It comes in two varieties: a reimbursement rider, which helps pay the cost of your long-term care expenses each month, or an indemnity rider, which offers a predetermined amount of money that is paid to you monthly, regardless of your long-term health care costs.
• Disability income rider: This rider may be useful if you become disabled and lose your ability to earn a living. The income from the rider may last for years or even longer, depending on the provisions of your policy.
• Waiver of premium rider: There are two types of waiver riders: a disability premium waiver and an unemployment premium waiver. With the disability rider, the insurer waives your need to pay your life insurance policy’s monthly premiums if you are disabled or lose your income due to illness or injury. With the unemployment rider, your premiums are waived if you involuntarily lose your job and have qualified for government unemployment benefits.

Whole life insurance cash value

Cash value is a feature found in permanent life insurance policies. Your insurer splits your premium payments: some go toward the policy's death benefit, but another portion is reserved in a cash value component that earns interest over time. With whole life insurance, this interest rate is fixed when you purchase the policy.

Once your policy has built up its cash value, you may be able to borrow against it with an interest-bearing loan. You are not required to pay back this loan while you’re alive, but if you don’t, the owed amount is ultimately first taken from the policy’s death benefit before the insurer makes a payment to your beneficiaries. This cash value makes whole life and other permanent forms of life insurance appealing to those who wish for financial benefits from their policy while they are still alive.

The cash value will continue to build for as long as you pay your premiums, but this amount is not added to the death benefit that is available to your beneficiaries after your death.

Whole life insurance dividends

For individuals who are looking at whole life insurance as part of a strategic financial plan, policies that pay dividends may be appealing. These are offered by many life insurance companies but are not guaranteed. To put it simply, if the insurance company has a good year financially, they will share some of their surplus earnings with their policyholders.

Whole life insurance policies can be divided into two types: participating and non-participating. It is the participating policies that are eligible for dividends. These are often offered through mutual life insurance companies, such as MassMutual, which has consistently paid out dividends since the 1800s.

If you earn dividends, this money is not restricted, and its size is determined by how much the policy has contributed to the company's surplus. The dividend can be used to reduce your premium, add to the cash value, reduce a policy loan or purchase additional life insurance. It can also be received as a check to be used however the policyholder would like.

Best whole life insurance companies

Life insurance is a personalized product, so the best whole life insurance company for you might not be the best for another person. You might find that you’re looking for specific values or qualities from an insurance provider. For instance, you might want a provider with experience covering military families, one that offers budget rates or a provider who is lenient with a specific pre-existing condition.

Depending on your specific situation, you may need to research additional companies to meet your life insurance objectives. However, based on Bankrate’s research, we have determined the following five companies are among the best in the industry for whole life insurance coverage.

These five major insurers were chosen through an objective analysis of the 2024 J.D. Power Life Insurance Study scores, AM Best and Standard & Poor’s (S&P) financial strength ratings, policy offerings, digital tools and customer service. J.D. Power scores reflect whether or not policyholders are generally satisfied, AM Best and S&P financial strength ratings show a company’s strong capital position and historical ability to pay out claims, and a wide range of policy options makes it easier to find the right policy for you with these providers.

How to find the best whole life insurance company for you

There are several important factors that you may want to consider as you shop for the best whole life insurance for adults. One of them is financial strength. The financial ratings provided by third-party agencies such as AM Best, Fitch, Moody’s and S&P show a company’s historical financial stability and its ability to pay claims, especially after a catastrophic event that may impact hundreds of its policyholders simultaneously.

To learn more about other policyholders’ experiences with a company, you can visit the Department of Insurance website in the state where you live to find out how many complaints the company has received during the past year or two. Similar information is also available through the NAIC. J.D. Power’s annual customer satisfaction surveys may also give you a good measure of each life insurance company’s overall customer experience.

You may also want to consider a company’s quoted premiums, as there are several types of whole life products that offer different features. Beyond the price, it’s helpful to consider how well a policy’s unique features benefit you compared to other types. The Insurance Information Institute (Triple-I) explains that it is beneficial to obtain quotes from several life insurance companies to compare coverage options and choose the best insurer for your own needs.

If you have a health condition, you should work with a licensed agent who can help you compare multiple insurance companies. Each insurance company has its own underwriting criteria and will vary in the premiums it charges for specific health conditions or other issues.

Whole life insurance vs. term life insurance

Since whole life insurance covers you for a longer period of time than term life insurance, the cost of a policy is generally more expensive. Term life insurance is also sometimes called pure life insurance because it only offers a death benefit, though some carriers offer riders for term life that allow you to customize your policy. You might prefer the benefits of whole life insurance if you are looking for a policy with long-term coverage and builds cash value.

Term insurance's limited policy period may make it a good choice for young families since it can be purchased to last until children are grown and no longer need financial support from their parents. Some individuals may wish to take advantage of both types of insurance, laddering their policies to provide comprehensive coverage during the policyholder’s life that is customized to their family's needs.

Frequently asked questions