The 10 Best Life Insurance Companies

For the second straight year, State Farm is the life insurance company America loves most, according to the latest annual J.D. Power U.S. Individual Life Insurance Study, which measures overall customer satisfaction with life insurance providers.

State Farm scored 839 out of 1,000 in a survey of 5,583 U.S. policyholders, with satisfaction being based on five factors:

• Communication
• Interaction
• Price
• Product offerings
• Statements

The average life insurance company in the survey scored 774. Companies that earned marks above that average were:

• State Farm: 839
• Globe Life: 812
• Mutual of Omaha: 801
• Northwestern Mutual: 794
• Pacific Life: 793
• Nationwide: 791
• Guardian Life: 787
• MetLife: 786
• MassMutual: 780
• New York Life: 775

J.D. Power notes that, as a whole, people who buy a life insurance policy quickly experience a decline in satisfaction with their purchase. This disappointment causes them to hesitate to buy other insurance and financial services products and leaves them with a lack of understanding of the products they already own.

The situation can be viewed as a “customer engagement problem,” J.D. Power says, and the dissatisfaction grows the longer a customer has a policy.

For example, among those who have owned a policy for five years or less, the overall satisfaction score is 821. After 20 years, the score has fallen to 756.

In a summary of this year’s findings, Robert M. Lajdziak, director, global insurance intelligence at J.D. Power, says:

“After a brief surge during the height of the pandemic, overall customer satisfaction with individual life insurance and annuity plans have now reverted to their previous long-term trends in which customer satisfaction declines as tenure with the product increases. It’s clear from our data that insurers are struggling to maintain regular contact with customers and to reinforce a unique value proposition during the length of the relationship.”

However, J.D. Power notes that State Farm is bucking the trend, with a year-over-year increase in customer satisfaction that ranks among the best.

Do you need life insurance?

Although life insurance can be a great product, it’s not for everybody.

As we note in “7 Questions You Should Ask Before Buying Life Insurance“:

“… if you have no spouse or dependents, a life insurance policy might not be necessary. Also, if you have enough financial resources to provide for your dependents if you died unexpectedly, buying life insurance may be a waste of money.”

Going through the list of questions in that story will help you determine whether you need a policy — and, if so, which type of coverage you should buy and how much coverage you would need.

Another Money Talks News story, “New Ways to Save Money on Insurance of Every Kind,” can help you drill down further on the type of coverage you need. As the story explains, life insurance comes in two main varieties: term life and whole life.

Term life is the better choice for many people. As we write:

“Term life insurance covers you for a fixed period of time and pays a death benefit if you die during that period. That money is tax-free, and your beneficiary can do whatever he or she wants with it.”

By contrast, a whole life policy will likely cost you more money, although it does offer advantages that might appeal to some people.