Choosing the right life insurance is a big decision—one that impacts your financial future and the security of your family. You want to feel confident that you've made the "right" choice and found a policy you can rely on for years to come. To make that choice, you should evaluate three core factors: the policy type that meets your long-term goals, the carrier’s financial strength (like A.M. Best and NAIC ratings), and the final premium cost.
Comparing all those details across multiple carriers can feel overwhelming. In this article, we’ll walk you through what to look for when comparing life insurance companies.
Initial Criteria for Comparing Life Insurance Carriers
When you start shopping, you’re likely researching the best life insurance companies. But what does “best” really mean? Since every person's financial situation is unique, the best carrier for one person might not be the best fit for you.
That’s why our experienced team always advises you to look beyond marketing and focus on objective factors. Shopping around before committing to a carrier helps ensure you find the one that offers the ideal combination of financial stability, customer service, and policy cost tailored to your specific needs.
Carrier Financial Strength and Stability
The primary consideration for any life insurance purchase is stability. You need confidence that the company will be financially sound enough to pay a claim decades in the future—whenever your family needs it most.
Independent agencies exist solely to rate carriers based on their ability to meet ongoing insurance obligations. While several ratings exist, the A.M. Best Financial Strength Rating (FSR) is the most widely used measure in the industry. Why? It provides a comprehensive, third-party evaluation of a company's financial stability and operational health.
Interpreting A.M. Best Ratings
A.M. Best ratings range from A++ (Superior) to D (Poor) and assess a carrier's overall financial health and stability. Here's a quick guide to understanding the most common tiers:
Superior (A++, A+): According to A.M. Best, carriers earning these ratings have a superior ability to meet their ongoing insurance obligations.
Excellent (A, A-): These companies demonstrate an excellent ability to meet their ongoing obligations.
Good (B++, B+): These companies have a good ability to meet their ongoing obligations.
When you're shopping, we recommend looking for carriers with an A- rating or higher. This shows they have a strong track record and the financial resources necessary to secure your family's future.
How to Check a Carrier's Rating
Want to verify a rating quickly? You can visit the A.M. Best website and use their free search tool to look up a carrier's current FSR.
Alternatively, working with a partner like SelectQuote makes this step easier. Our licensed agents only compare policies from a panel of highly rated life insurance carriers, so you can trust that any option we present has already met stringent standards for financial stability.
Customer Service Reputation
When you purchase life insurance, you're not just buying a piece of paper; you're entering into a long-term relationship. A carrier's reputation and customer service capabilities are key to ensuring a positive experience—not only for you as the policyholder, but also for your beneficiaries when they eventually need to file a claim.
The claims process is often stressful and complex. Knowing that your carrier has a history of clear communication, fair dealings, and quick dispute resolution can provide significant peace of mind today, knowing that your loved ones will be treated with empathy and efficiency tomorrow.
We advise looking at independent data sources that track customer complaints and resolution practices:
NAIC Complaint Index Score
The National Association of Insurance Commissioners (NAIC) is an organization of insurance regulators from all 50 states. The NAIC Complaint Index is one of the most reliable and objective tools for comparing consumer experiences.
What it Measures: It compares the number of confirmed complaints filed against a company to its market share (how much business it writes). This normalizes the data, so a small company isn't unfairly compared to a national giant.
Interpreting the Score:
A score of 1.0 means the company receives an average number of complaints for its size.
A score below 1.0 means the company receives fewer complaints than the industry average (a great sign).
A score above 1.0 means the company receives more complaints than the industry average.
When comparing carriers, the lower the NAIC Complaint Index score, the better the company generally performs in handling consumer issues. You can look up a carrier's score directly on the NAIC Consumer Information Search website.
Better Business Bureau (BBB)
The Better Business Bureau (BBB) evaluates businesses based on customer interaction, complaint history, and honesty in business practices. The BBB assigns ratings ranging from A+ (the highest) to F (the lowest). These ratings are based on how an insurance company is likely to interact with its customers, including complaint volume, response time, resolution, and transparency.
While the NAIC focuses exclusively on confirmed regulatory complaints, the BBB encompasses general consumer complaints and the company's commitment to resolving them, providing a broader view of its overall customer service culture.
Specific Life Insurance Needs and Carrier Focus
As helpful as it is to compare carrier financial strength and customer service scores, those objective ratings only tell part of the story. The next step is to match your unique profile and coverage requirements with a carrier that fits your situation. This is where the term "best" becomes truly personal—it depends on finding a carrier that excels in three key areas relevant to your needs: the specific type of policy you require, how your health is evaluated, and the final cost.
Our experienced agents understand that every carrier has nuances in how they approach risk and policy features. Because they work with a large panel of leading carriers (not just one brand), they are equipped to pair you with the ideal company for your specific needs.
Determine the Type of Life Insurance Coverage You Need
Finding the right life insurance policy is like choosing the right tool for a job—if you pick the wrong one, you won't get the results you need. Life insurance policies generally fall into four main categories, and understanding how each one works is key to making a confident decision. We'll walk you through the details of term, whole, simplified issue, and guaranteed issue so you know exactly which product best supports your long-term plan.
Term Life Insurance
Term life insurance is one of the most affordable forms of life insurance, as you only buy it for as long as you need it. These policies are designed to provide coverage for a specific length of time, typically a 10-, 15-, 20-, 25-, or 30-year term.
Whole Life Insurance
Whole life insurance is a type of permanent life insurance that covers you for your entire lifetime. In addition to the death benefit, these policies have a cash value component, which can be a useful tool for those looking to invest, pay down debt, or supplement retirement funds.
Simplified Issue Life Insurance
Simplified issue life insurance is a form of final expense insurance. With this type of coverage, you’ll forgo the medical exam and instead take a questionnaire about your health and lifestyle. This can be a good option for someone who needs immediate coverage or who is concerned that a medical exam would work against their favor for coverage.
Guaranteed Issue Life Insurance
Guaranteed issue life insurance is a form of final expense insurance that guarantees approval if you’re between the ages of 45 and 85. Like simplified issue life insurance, this option works well for individuals seeking immediate coverage or those concerned about how a medical exam might affect their policy approval or premiums.
How Health Conditions Can Impact Premiums
Your final premium cost is primarily determined by three key factors: your age, the type of policy you choose, and your health status. The insurance company reviews your medical history and lifestyle through a process called underwriting, ultimately assigning you a risk class that sets your rate.
Your health profile can be viewed differently from one carrier to the next. One company might penalize certain factors more significantly, while another might offer a much better rate.
This wide variance in pricing is why shopping around is so essential. Our licensed agents use their experience and access to quotes from dozens of highly rated carriers. While researching all of this extensively can take hours, our proprietary technology removes the tedious work, allowing agents to find your perfect match in minutes. They know which companies have the most favorable underwriting criteria for your unique health history, ensuring you're matched with a carrier who offers you the best rate possible.
Using a Life Insurance Calculator to Estimate Cost
Once you understand your policy options and how your health profile aligns with different carriers, the next natural step is to estimate the cost. Our experienced team highly recommends using a life insurance calculator as a starting point for your research. It's a quick, helpful way to get a preliminary, non-binding estimate of what your premiums might look like.
This tool simplifies the first step by eliminating the guesswork in determining the ideal coverage amount for your family's specific needs—such as calculating mortgage repayment, future education costs, and income replacement. You can try our calculator to begin your estimate right now. It’s important to remember that the calculator provides an estimate, and the carrier's comprehensive underwriting review will determine your final, personalized rate.
Comparing Quotes from Different Life Insurance Companies
After evaluating a carrier's financial stability, customer service reputation, and how they view your unique health profile, the final step is comparing the quotes themselves. The key to a successful decision isn't just finding the lowest price; it's finding the best value—a financially strong carrier that offers the right policy features at the lowest possible premium for your specific situation.
Because some quotes can differ significantly from one carrier to another, having an experienced partner to help you compare will help do the heavy lifting. Because our agents are commission-agnostic, they act as your advocate, focusing solely on matching your unique needs and budget to the carrier that offers the best fit for you.
What to Look for in Term Life Insurance Carriers
When comparing quotes for term life insurance, one of the most important features to examine is the conversion option. This valuable provision allows you to convert your term policy into a permanent (whole or universal) life policy later on without needing a new medical exam or going through a new underwriting process. This is a crucial safety net because if your health declines after you buy the term policy, a conversion option ensures you can secure lifelong coverage regardless of your new health status.
You should also look closely at renewal clauses. While term policies expire after a set period, a renewal clause allows you to extend the coverage year-to-year without a medical exam after the initial term ends. Though the premiums will increase significantly due to your older age, this provides a necessary, short-term coverage bridge if you missed the conversion window or just need a few more years of protection.
Finally, check the carrier's rider availability. Riders are optional provisions you can add to your basic policy to customize or enhance the coverage, usually for a small additional cost. The availability and price of these riders vary significantly by carrier.
Getting Life Insurance Quotes Online
Shopping for life insurance used to mean calling half a dozen different agents, repeating your information, and waiting days for quotes to arrive. Thankfully, that process is much simpler when using an experienced, independent broker like SelectQuote, which allows you to quickly and accurately get quotes from multiple leading carriers all in one place.
You only need to provide your information once; we then utilize our proprietary technology to match your needs with the specific underwriting criteria of our large carrier panel. This streamlined approach saves you the time and hassle of repetitive applications and, even more importantly, ensures accuracy.
Benefit from SelectQuote’s Access to Highly Rated Insurance Providers
At SelectQuote, we work with some of the most trusted life insurance companies in the nation to help you find ways to save time and money. The life insurance companies we partner with can provide favorable life insurance rates for all types of situations, giving you the power of choice when securing the best life insurance for you.
