Whole life insurance helps your family prepare for the unexpected. The guaranteed death benefit can help replace a family's loss of income, help with mortgage costs, or educational needs — or to leave a legacy for the next generation. Over time, these policies build cash value that grows tax-free. This “living benefit”1 can be accessed during your lifetime. State Farm® Life Insurance Company (not licensed in MA, NY or WI) or State Farm Life and Accident Assurance Company (licensed in NY and WI) can help.
State Farm Whole Life insurance policies offer level premiums and life insurance protection for as long as you live, provided that premiums are paid as required to keep the policy in force.
Policies can be paid with a single premium, premiums payable to 100, or premiums payable up to a limited number of years.
While policy loans do accrue interest daily, any outstanding policy loans and interest will reduce the death benefit and cash value.
While not guaranteed, policy may earn dividends2 that can be paid in cash, used to reduce policy premium, accumulate as interest, or pay for additional insurance.
1 Permanent life insurance develops cash value that can be borrowed. Policy loans accrue interest and unpaid policy loans and interest will reduce the death benefit and cash value of the policy. The amount of cash value available will generally depend on the type of permanent policy purchased, the amount of coverage purchased, the length of time the policy has been in force and any outstanding policy loans. There may be tax consequences associated with policy loans. Neither State Farm nor its agents provide tax or legal advice. 2 Dividends are a return of premium and are based on the actual mortality, expense, and investment experience of the Company. Dividends are not guaranteed. Disclosures This is a general description of coverage. A complete statement of coverage is found only in the policy. For more details on coverage, costs, restrictions, and renewability, or to apply for coverage, contact your local State Farm agent. Insurance policies and/or associated riders and features may not be available in all states, and policy terms and conditions may vary by state. Policy Series Info Securities are not FDIC insured, are not bank guaranteed and are subject to investment risk, including possible loss of principal. Issued by: State Farm Life Insurance Company (Not licensed in MA, NY, or WI) State Farm Life and Accident Assurance Company (Licensed in NY and WI) Home Office, Bloomington, Illinois Each insurer is financially responsible for its own products. IL-10.20
[1] This assumes that the contract qualifies as life insurance under section 7702 of the Internal Revenue Code (IRC) and is not a modified endowment contract (MEC) under section 7702A. Most distributions are taxed on a first-in/first-out basis as long as the contract meets non-MEC definitions under section 7702A. Loans and partial withdrawals from a MEC generally are taxable and, if taken prior to age 59½, may be subject to a 10% tax penalty. [2] This assumes there is sufficient cash value to cover monthly policy charges. Keep in mind that variable universal life insurance has market volatility so it’s possible that you may need to pay an additional premium on your policy. Guarantees and protections are subject to Nationwide’s claims-paying ability. 1 All whole life insurance policy guarantees are subject to the timely payment of all required premiums and the claims paying ability of the issuing insurance company. Policy loans and withdrawals affect the guarantees by reducing the policy’s death benefit and cash values. 2 Policy benefits are reduced by any outstanding loan or loan interest and/or withdrawals. Dividends, if any, are affected by policy loans and loan interest. Withdrawals above the cost basis may result in taxable ordinary income. If the policy lapses, or is surrendered, any outstanding loans considered gain in the policy may be subject to ordinary income taxes. If the policy is a Modified Endowment Contract (MEC), loans are treated like withdrawals, but as gain first, subject to ordinary income taxes. If the policy owner is under 59 ½, any taxable withdrawal may also be subject to a 10% federal tax penalty. 3 Guardian, its subsidiaries, agents, and employees do not provide tax, legal, or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. 4 Dividends are not guaranteed. They are declared annually by Guardian’s Board of Directors. 5 Financial information concerning Guardian as of December 31, 2018, on a statutory basis: Admitted Assets = $58.5 Billion; Liabilities = $51.3 Billion (including $44.3 Billion of Reserves); and Surplus = $7.2 Billion) 6 Some whole life polices do not have cash values in the first two years of the policy and don’t pay a dividend until the policy’s third year. Talk to your financial professional and refer to your individual whole life policy illustration for more information. 7 As long as your policy is not a Modified Endowment Contract. 8 Whole life riders may incur either an additional premium or cost. Riders may not be available in all states. MoneyGeek analyzed policy details and real quotes to help you find the best whole life insurance policy for your needs.  Ensure you're getting the best rate for your life insurance. Compare quotes from the top insurance companies. Advertising & Editorial DisclosureLast Updated: 5/31/2022 Written By | Buying life insurance can be confusing, especially with numerous policy types on the market to choose from. Whole life insurance offers guaranteed death benefit, cash value growth and stable premiums for life. The guarantees provided by whole life insurance can be attractive to those with permanent life insurance needs. Getting the best whole life insurance policy comes down to knowing specific details about the plan, like what riders, flexibility and customizations a company offers, and what returns you can expect out of the policy. Based on data collected by MoneyGeek, which include dividend payouts, third-party rankings and customer service scores, these are the best whole life insurance companies to choose from. Hybrid term/whole life product Choice of the length of payment term Riders available to customize your whole life insurance All policies are fully underwritten MoneyGeek Score: 87.4 MoneyGeek's Take: Northwestern Mutual tops our list of best whole life insurance companies for its product flexibility and customization options, high third-party customer satisfaction scores, superior financial strength and industry longevity. Northwestern Mutual offers two whole life insurance policies for individuals up to 85 years old. Minimum coverage starts at $25,000 with no cap, as long as you can prove a financial need for higher death benefits. The company’s CompLife whole life insurance plan allows you to choose how long you’ll be paying for whole life insurance. You can opt to pay for a period of anywhere from 10 to 30 years, or until you reach age 65, 90 or until death. Keep in mind that the shorter the payment schedule, the higher your premiums. Northwestern Mutual is one of the few companies to offer a hybrid solution. Its Whole Life Plus policy combines term and whole life insurance in one policy. You can choose how much temporary and permanent coverage you need, with further customization provided through optional riders like accelerated care benefit to cover long-term care or waiver of premium, which pays your premiums if you become disabled. The company also provides living benefits, which means you can use some of the death benefits while still alive if you’re diagnosed with a terminal illness. As a mutual company, Northwestern Mutual pays some of the highest annual dividends to policyholders in the industry (most policies will receive a 5% dividend in 2022). Policy Types Offered: At least 4% cash value growth guarantee Customizable premium lengths and riders Limited online information MoneyGeek Score: 84.5 MoneyGeek's Take: Even during the pandemic, MassMutual managed to pay out a 6% dividend, something they’ve done annually for eligible policyholders since 1869. The company’s consistency in paying dividends is why it topped our list for the best whole life insurance policy for high guaranteed returns and dividends. Mass Mutual is one of the best whole life insurance providers for seniors and other age groups. Its whole life policies come with a guaranteed minimum of 4% cash value growth. Furthermore, although the company doesn’t ensure annual dividends, it has been paying them yearly since 1869. In 2021, policyholders got a 6% annual dividend, amounting to an estimated $1.7 billion in dividend payouts. MassMutual requires a minimum whole life insurance death benefit of $25,000. You can choose from various payment lengths, including 10, 12, 15 and 20-year terms, or payments until you reach the age of 65 or 100. The company also has a Legacy High Early Cash Value whole life policy — usually called keyman life insurance — geared toward businesses providing coverage for key employees. These policies are paid to age 85. You can choose from a wide range of riders to customize your whole life insurance, including waiver of premium, long-term care, renewable term and accelerated death benefit. With the guaranteed insurability rider, you can buy more whole life insurance at certain times in the future without having to answer health questions or complete a medical exam. If you want the ability to buy term life insurance when needed, the renewable term rider allows you to turn a whole life policy into a hybrid policy. It also offers you the option to convert the term coverage to permanent or drop it when it’s no longer needed. Policy Types Offered:
Highly customizable whole life policies High cash value and dividend growth potential Long list of riders, some free Can only buy from an agent MoneyGeek Score: 87.5 MoneyGeek's Take: MoneyGeek considers New York Life one of the best whole life insurance companies if customization and riders are what you’re after. It also happens to be one of the oldest and most well-respected providers in the industry. New York Life is one of the most recognized names in the life insurance industry. It offers a standard whole life insurance policy with a minimum death benefit of $25,000. This policy includes guaranteed cash value, death benefit and premiums. If you want to customize your policy, you get all that and more with custom whole life insurance. If you’re looking for the best life insurance policy for children, their whole life policies are great. The custom whole life policy begins with a $50,000 death benefit and no cap, as long as you can prove your financial need. New York Life is also a mutual company and has paid dividends annually since 1854. With New York Life, you can add the following free riders: insurance exchange to transfer your policy to another person (there is a transfer fee), living benefit to access a portion of the death benefit if diagnosed with a terminal illness and paid-up insurance purchase for your spouse. The last of these three allows the living widow or widower to use the death benefit to buy a fully paid life insurance policy for them after their spouse passes. New York Life also has the following paid riders that you can add to your life insurance premium:
Policy Types Offered:
May not require a medical exam May earn yearly dividends Hybrid long-term care solutions available Quotes and applications only available through financial professionals Limited information on company website MoneyGeek Score: 81.6 MoneyGeek's Take: We chose Guardian Life as our top pick for best product options and flexibility because of its diverse whole life insurance policy lineup. With Guardian Life, you get varied whole life insurance options and flexibility, especially if you’re interested in long-term care coverage. Guardian’s standard whole life insurance policy allows you to choose payment terms ranging from 10 to 20 years or terms that are paid up at certain ages, like 65, 95 or 99 years old. The death benefit starts at $25,000 for individuals up to 80 years old, with no maximum coverage cap. Like other mutual companies, Guardian Life has paid out dividends annually since the 1800s, though they aren’t guaranteed. Guardian's joint long-term care rider and survivorship whole life policy provide a long-term care solution with life insurance for one or both spouses in one product. You have the option of accelerating up to half of the death benefit’s face amount for long-term care. Once you’re on claim, you can use the monthly benefit payments for care, and Guardian will credit premiums as paid, so the policy stays in force. All long-term care payments will reduce the death benefit, but not deplete it. The remaining death benefit can be paid to your beneficiary when the second-to-die spouse passes. This rider can be added as early as age 18 and up to age 70, but you must be in good health to be eligible. Policy Types Offered:
Several policies to choose from Local agents provide a personalized experience May qualify for whole life insurance with no medical exam Only available through agents MoneyGeek Score: 97.4 MoneyGeek's Take: State Farm has over 18,000 agents across the country, making it easy to purchase through an agent and get a personalized experience. State Farm is another mutual life insurance company that offers dividends on its whole life insurance policies. Though product availability varies by state, State Farm has whole life insurance options. They also have local agents to help you find what you need to protect your family. State Farm offers a single premium whole life insurance policy, limited payment options for 10, 15, or 20 years, and a standard to-age-100 whole life policy. Starting at age 50, seniors can purchase final expense whole life insurance with up to $10,000 in coverage. When you speak to an agent, ask about State Farm’s rider options if you want to customize your life insurance policy. Several options are available, including the children’s and spouse term rider, waiver of premium for disability, guaranteed insurability, payor insurance benefit and level term to age 95, which offers a hybrid solution of term and whole life in one policy. The minimum death benefit for State Farm's whole life policy is $10,000. If their policy death benefit is less than $1 million, healthy individuals under 50 may qualify for coverage without a medical exam. Policy Types Offered:
No medical exam or health questions Most claims paid in 24 hours Tobacco use not considered Only available to seniors MoneyGeek Score: 90.8 MoneyGeek's Take: Mutual of Omaha is our pick for best guaranteed acceptance whole life and best whole life for seniors. With no medical exam or health questions, coverage is guaranteed, and tobacco use doesn’t increase premiums. The older you get without buying life insurance, the greater your chances of no longer being eligible for coverage. For seniors with health concerns, Mutual of Omaha offers up to $25,000 in guaranteed acceptance whole life insurance. If you are between 45-85 or 50-75 in New York, you cannot be turned down for coverage. Your premiums are only determined by your age at the time of issue, gender and coverage amount. While this is more expensive than medically underwritten whole life insurance, guaranteed issue whole life allows you to get final expense coverage without health being a factor. If you don’t have as many health concerns but still prefer not to undergo a medical exam, Mutual of Omaha also has simplified issue whole life coverage. This policy makes you answer a few simple health questions but doesn’t require a medical exam and doesn’t take tobacco use into consideration. It offers coverage of up to $20,000 ($40,000 in WA) and provides a graded death benefit. The latter only provides returned premiums plus 10% if you die from a non-accidental death within the first two years. If you want a level death benefit immediately, an accelerated death benefit rider can give you up to $40,000 in coverage for being confined to a nursing home or diagnosed with a terminal illness. Policy Types Offered:
Based on MoneyGeek's scores, the companies listed below are the best whole life insurance companies available today. These companies have superior financial strength to pay life insurance claims, high customer satisfaction scores with J.D. Power, are available to most age groups and have several policy options to choose from.
Ensure you’re getting the best rate for your life insurance. Compare quotes from top providers to find the most affordable life insurance coverage for your needs. Whole life insurance is a permanent type of life insurance. It offers guaranteed cash value, level premiums and a death benefit. The policy covers you until death as long as you continue to pay your premiums. Some whole life insurance policies have a limited payment period, which means they will continue to accrue cash value after the policy is paid in full. For instance, a 20-year whole life policy requires 20 years of payments before the policy is paid in full. These policies have a higher premium because of the shorter payment timeline. Mutual insurance companies' whole life insurance policies may also have dividends, which are profits returned directly to the policyholders instead of stockholders. Policyholders who receive a dividend can use it in several ways, including taking it as cash, paying premiums or outstanding loans against the cash value, or buying paid-up additions. When you purchase paid-up additions, the dividends are used to buy additional whole life insurance coverage, increasing the death benefit amount and cash value. Whole life insurance is different from term life insurance in a few ways. First, whole life is permanent life insurance, while term life insurance is temporary. Both have level premiums, but whole life provides lifetime coverage, and term life expires once the term is over. You can renew term life insurance, but the premiums will be higher based on your current age. Whole life insurance also builds cash value and may come with dividends, which aren’t offered with term life insurance. Because it provides lifetime protection and cash value growth, whole life insurance is more expensive than term life insurance.
When determining which type of life insurance is the best choice for you, consider what needs life insurance will cover. If you’re looking to cover a specific debt, like a mortgage, or want to make sure your kids can go to college if you pass away before that happens, you have a temporary need for life insurance coverage. This would be best suited to term life insurance. However, if you want to pay for your funeral and end-of-life expenses, have access to a cash value or have a financial dependent that will continue for life, such as a special needs child, you should consider permanent life insurance like whole life. For many, a hybrid solution is best, with temporary needs covered by term life and permanent needs covered by the best whole life insurance you qualify for. With whole life, you get:
While whole life insurance may be the best solution for some, it’s not without its pitfalls. For one, the cost of life insurance for whole life is often higher than term life insurance and is level for the policy's lifetime. Because of the higher premiums, you may not be able to afford as much coverage as you need or changes in your circumstances could make whole life insurance unaffordable for you. Though some whole life insurance companies offer limited payment options, others typically require premiums payments until age 100 or older, which means most people will pay for coverage until they die. When you get a quote for whole life insurance, the sales illustration will depict cash value growth and potential dividends based on historical data. Though the minimum cash value growth is guaranteed, dividend payments are not. If you decide you no longer want your whole life insurance policy, you can surrender it. You will receive any remaining cash value, but you may also be assessed surrender charges. These charges vary by company and are set for a specific period, known as a surrender charge period. Like a mortgage, the surrender charge period front loads the interest, meaning you will pay the highest charge in the first few years of the policy. Ensure you’re getting the best rate for your life insurance. Compare quotes from top providers to find the most affordable life insurance coverage for your needs. Find the answers to some of the most common questions about the best whole life insurance policy and companies. Whole life insurance offers lifetime protection with level premiums and a guaranteed death benefit. In exchange for your monthly or annual premiums, the life insurance company promises minimum cash value growth and a death benefit paid to your beneficiary when you die. If you buy whole life insurance from a mutual company, you may receive dividends, which you can then use to pay premiums, buy additional whole life insurance coverage or take as cash. See also: How does life insurance work? The main difference between whole and term life insurance is the length of coverage time. Whole life insurance is permanent life insurance and offers a level death benefit from the time your policy is issued until death. Term life insurance offers a death benefit for a specific number of years, usually between 10 and 30. The policy expires after the term is over unless you renew it at your current age for a higher premium. Your financial needs will help you decide whether term or whole life is a better life insurance option for you. Those with temporary coverage needs, such as paying off debt, covering your income until retirement and ensuring your children can afford college, may be better suited to term life insurance. Permanent needs, such as paying for funeral expenses, supplementing income during retirement and financially taking care of a dependent adult, means whole life insurance might be the better option. You can own more than one life insurance policy, so buying some coverage in term and the rest in whole life may be the best solution for your needs. Here at MoneyGeek, we do our best to ensure that you’re getting the most reliable information about whole life insurance. Our ranking for the best whole life insurance companies incorporates third-party analysis from AM Best and J.D. Power and Associates. It also considers our own proprietary research and analysis of each company’s policy offerings and application process. To learn more, visit our complete methodology page. About the Author Mandy Sleight is a professional freelance writer and licensed insurance agent. She has her property, casualty, life, and health licenses and has been working in the industry since 2005. Mandy has worked for well-known insurance companies like State Farm and Nationwide Insurance, and most recently as the Operations Coordinator for a start-up employee benefits company. Mandy earned her Bachelor of Science degree in Business Administration and Management from the University of Baltimore and her Master in Business Administration from Southern New Hampshire University. She uses her vast knowledge of the insurance industry and personal finance combined with her writing background to create easy-to-understand and engaging content to help readers make smarter choices with their budget and finances. |
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