There Are Over 700 Life Insurance Companies in Business. Here’s How to Find the Right One

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Doing your research is essential when shopping for life insurance. 

When it comes to buying life insurance, you’ll often hear that it’s important to shop around for coverage rather than simply go with the first insurance company that hits your radar. Shopping around could result in lower, more affordable premiums that make your policy easier to manage financially. And given that you may be paying those premiums for several decades, that’s important.

But choosing the right life insurer can be a challenge. In fact, the American Council of Life Insurers reports that as of the end of 2021, there were a whopping 737 life insurance companies in business across the U.S. Now that’s a lot of options to sort through. You can make the process easier on yourself, however, by following these tips.

1. Ask for recommendations

Do you have friends or neighbors who have life insurance? If they’re happy with their coverage and find it affordable, then it wouldn’t hurt to ask who’s insuring them and seek out quotes yourself.

Granted, the amount of money you’ll be charged for life insurance will hinge on a host of factors. These include the state of your health, the number of years you’re buying coverage for, and the amount of coverage you’re seeking out. After all, a $1 million life insurance policy is apt to cost more than a policy with a $250,000 death benefit attached to it.

Also, your version of “affordable” might differ from that of your friends or neighbors in the context of life insurance. But it’s still a good idea to ask around for recommendations.

2. Rely on names you’ve heard of

You want to sign up with a life insurance company that’s financially stable. And major insurers may be more likely to fit that bill.

This isn’t to say that a life insurance company you’ve never heard of is a poor choice. But there’s a reason certain life insurance names may be more familiar to you than others. And that familiarity is something you can take comfort in.

3. Look at customer satisfaction ratings

Hearing what current life insurance customers have to say about their insurers might prompt you to choose one over the other. If you have a list of companies you’re considering, it pays to run those names through the National Association of Insurance Commissioners’ database and see what sort of customer feedback comes up.

4. Compare your costs

You might get quotes from a number of different life insurance companies once you’ve narrowed down your choices. Assuming you’re talking about the same level of coverage, cost should definitely be a factor in choosing one insurer over another.

If one life insurance company will write you a 30-year, $1 million term life policy for $1,000 a year and another is offering the same policy terms for $1,500 a year, why wouldn’t you go with the less expensive option (assuming you have no concerns about that insurer’s finances)?

Choosing a life insurance company isn’t easy. But the more research you do, the more likely you’ll be to wind up with cost-effective coverage.

Our picks for best life insurance companies

Life insurance is essential if you have people depending on you. We’ve combed through the options and developed a best-in-class list for life insurance coverage. This guide will help you find the best life insurance companies and the right type of policy for your needs. Read our free review today.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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