The 8 Best Life Insurance Companies That Give You Peace of Mind as a New Parent
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$15+ per month No one wants to think about what might happen to their family in the event of a tragic loss, but having a plan in place to protect your loved ones can offer much-needed comfort. Life insurance can offer your family a financial safety net in the event that you are no longer able to support them.
Parents of young kids don't always consider life insurance, but it's something that most financial experts highly recommend. "Life insurance is crucial for parents because it provides financial protection for their family in the event of their untimely passing," says Susana Zinn, a mom and independent life insurance agent based in Miami, Florida. "It ensures that the family's financial needs, such as mortgage payments, child care expenses and education costs, are covered even when the primary breadwinner is no longer there."
There are two main types of life insurance to choose between: term life insurance and permanent life insurance.
- Term life insurance provides coverage for a distinct time period — usually 10, 20 or 30 years — and pays out the benefit if you pass away during the term, Zinn says.
- Permanent life insurance guarantees coverage for your entire life, and the cash benefit grows over time. Overall, permanent life insurance tends to come with a higher price tag than term life insurance.
There are also two subsets of permanent life insurance: whole and universal:
- Whole life insurance generally offers consistent premium prices and a flat fee your loved ones receive upon your death.
- Universal life insurance has more flexibility in terms of premium payments, but the final payment received upon your death isn't guaranteed and may depend on how much you paid in premiums.
How to choose the best life insurance for your family
If you're in the market for life insurance as a new parent, you may feel uncertain about how much life insurance you need and which plan to get.
What type of life insurance should new parents get?
For most young families, term life insurance is the best option, Shirshikov and Zinn state. "Term life insurance, offering coverage for a specified period, is typically recommended for young families due to its affordability and straightforward nature," Shirshikov explains. Term life insurance provides protection during times of financial vulnerability, including when you are raising young kids or making mortgage payments.
Permanent life insurance might be a good match if you're looking for lifelong coverage and are willing to pay higher premiums, Zinn says. But often, you can get a term life insurance plan that has the potential to switch to a permanent plan. "I recommend taking a term life insurance policy that is convertible, meaning it can be converted into a permanent life insurance policy in the future," Zinn says.
How much life insurance coverage should new parents get?
A good rule of thumb is to get a policy that is about 10 to 12 times your annual income, Shirshikov says. "But this can vary based on individual circumstances," he notes. "Parents should consider future education costs, daily living expenses, and any debts when determining the coverage amount."
While thinking about what might happen to your family in the event of your passing isn't pleasant at all, picking out a life insurance policy doesn't have to be complicated. Consider policies that meet your family's budget needs, have good customer service, and come from reputable companies. Once you're covered, you'll likely feel relieved and more confident about your family's security.
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State Farm
- You can convert term plans to permanent plans though there may be additional costs
- The fees for term life insurance are very budget-friendly
- State Farm has excellent customer service
- You must contact a State Farm agent to sign up for a plan
- Residents of Massachusetts can't access State Farm Life Insurance
State Farm is a well-known, financially stable, reputable insurance company that offers term life insurance plans of 10, 20 and 30 years as well as two types of permanent life insurance plans: whole and universal. Term life insurance starts at $15 a month; information about permanent life insurance requires a call to an agent for a quote. Most importantly, State Farm ranks exceptionally high for customer service. In 2023, it was the highest ranked individual life insurance company for customer satisfaction, according to J.D. Power.
Northwestern Mutual
- You can convert term insurance plans to permanent plans down the line
- Northwestern Mutual is known for its excellent customer service
- There isn't a way to apply online; you must talk to a financial advisor to buy a plan
Founded in 1857, Northwestern Mutual is one of the oldest life insurance companies out there and is currently the largest life insurance company in the U.S. Fees will vary, but you can sign up for term insurance periods of 10,15 and 20 years or choose from a large number of permanent plans, including whole life insurance, universal life insurance and variable universal life insurance (with different stipulations in terms of when and how the premiums increase and whether the plan changes as market values fluctuate). It is also one of the most highly ranked life insurance companies when it comes to customer service, with fewer customer service complaints than most of its competitors.
Guardian Life
- Most policies allow you to convert from term to permanent life insurance
- Guardian Life is one of a few major life insurance companies that offers coverage to HIV-positive individuals
- You can get quick online quotes for term policies but you need to speak to a specialist to buy a policy
- The website doesn't offer many details about coverage information
Guardian Life Insurance is a solid, financially stable life insurance company. You can get a quote for term policy online in just a few minutes. Guardian Life Insurance also ranks highly when it comes to customer service. In 2023, J.D. Power recognized the company for "outstanding" customer service. Term life insurance plans start at $42 per month for a 10-year plan and go up to $110 for a 30-year plan; you need to contact the company directly for term life insurance quotes, as rates for these vary from one person to another.
MassMutual
- Most term life insurance plans can convert to permanent plans without additional medical questions or doctor appointments
- Term policy premiums are very budget friendly and may work well for families on tight budgets
- MassMutual doesn't offer online quotes
- The website can be challenging to navigate
MassMutual offers some of the least expensive term life insurance rates out there — term plans start as low as $9 to $10 per month, depending on your age and sex, and you can pick between 10-, 20- and 30-year options. Information about permanent plans (including whole, universal and variable choices) requires a quote from the company. MassMutual also ranks highly among its customers, with J.D. Power ranking the company third in 2023 in terms of customer satisfaction.
Bestow
- You can quotes and apply for plans online
- Bestow doesn't require medical evaluation
- There's an online chat option for customer service
- You can't buy permanent life insurance from Bestow
- It's a less established company
If you are looking for a modern, user-friendly experience, Bestow is for you. This is the only company on the list that allows users to apply for term insurance online and qualify in just a few minutes. The website is easy to use and has an online chat function. Plus, the monthly premiums for life insurance are pretty affordable — Ten-year plans (available to people aged 18 to 60) start at $21 and 30-year plans start at $26.
Though the company is newer than the others reviewed, it's quickly gaining a positive reputation. Bestow ranked first for Forbes' best insurance companies of 2023.
Everyday Life Insurance
- Everyday Life Insurance is available in all 50 states
- Very few of their plans (less than 10%) require a medical exam
- You can buy some plans fully online (without speaking to a representative) depending on your age and location
- Your specific carrier (not Everyday Life) handles customer service and claims
Launched in 2018, Everyday Life Insurance offers term and whole life insurance from partners like Assurity, Fidelity Life, Legal & General, TruStage and more. You can take an anonymous online quiz to get a specific plan tailored to your needs — usually a term life insurance of 10 to 40 years. The average premium at Everyday Life insurance is $15 per month, and over time, the company’s "predictive protection" technology can automatically adjust your plan to your life to ensure you’re not paying for more than what you need.
Dayforward
- Most customers (95%
- according to its website) don't require a medical exam
- One of the largest reinsurance companies in the world (MunichRe) backs the policies
- Stay-at-home spouses can qualify for policies worth up to half of their family's income to cover child care and other expenses if they pass away
- The potential payout decreases with time
- Dayforward does not offer permanent life insurance or plans for applicants older than 50
- Dayforward is not currently available in several states
Dayforward is designed to protect parents' income for their kids. Unlike other insurance companies, which issue a lump sum upon a policyholder's death, Dayforward offers term life insurance that pays out a steady, monthly paycheck to their customers' kids until the youngest of those kids is old enough to take care of themself (when they're either 18, 21 or 26 years old, depending on the policy you pick). The company covers incomes up to $500,000 a year, and you can purchase plans entirely online.
Know, however, that these plans decrease in value over time. For example, the company will pay less overall if a policyholder dies three years before their child's 18th birthday than it would if that same policyholder passed away when their child was 5.
As of right now, Dayforward isn't available in: California, Connecticut, Hawaii, Illinois, New York, North Carolina, North Dakota, South Dakota, Maine, Minnesota, Virginia or West Virginia
Ladder
- There's a five-minute online application for coverage plans under $3 million
- You can adjust your coverage plan at any time
- It's available in all 50 states.
- You can't buy permanent or whole life insurance
- You can't apply if you're older than 60.
Ladder offers term life insurance plans (spanning 10 to 30 years) in all 50 states. Fill out a short application online and choose from Ladder's own insurance plans and third-party policies from partners like Amica Life Insurance Company and Allianz Life Insurance Company of New York. The difference with Ladder is its flexibility: Customers can raise or lower their coverage at any time, and their premiums will adjust to match. However, the company is no-frills in its approach, and it does not offer add-ons or permanent life insurance.
How we chose the best life insurance companies
I consulted with two financial experts to help select the best life insurance for parents:
- Dennis Shirshikov is an expert in finance and retirement planning; he's also a professor of finance, economics and accounting at the City University of New York.
- Susana Zinn is a mom of two children, a grandmother of four and an independent life insurance agent based in Miami, Florida.
Both experts recommended that parents pick life insurance plans from reliable companies with strong reputations and financial ratings. They also emphasized that the companies should have stellar customer service and affordable rates. These are some of the qualities that guided my search.
FAQ
Should I get life insurance after having a baby?
It's a good idea for anyone to get life insurance, but when you're caring for a growing family, there is even more reason to consider it. Life insurance guarantees that your family will have financial protection in the event of your untimely death.
Can you put a newborn on life insurance?
Yes, children, including newborns, can be listed as beneficiaries on your life insurance plan, but experts suggest that you appoint a trust or a legal guardian to manage these funds until your child reaches adulthood.
How much life insurance should you have as a parent?
It's generally recommended that you get a life insurance plan that will replace about ten years of your income.
- Dennis Shirshikov, Professor of Finance, Economics, and Accounting, City University of New York, New York, NY.
- Susana Zinn, Independent Life Insurance Agent, Miami, FL.
- Minnesota Department of Commerce, Term vs. Permanent Life Insurance.
- National Association of Insurance Commissioners (NAIC), 2022 Top 25 Groups and Companies by Countrywide Premium, March 2023.
- Forbes, Meet The World's Best Insurance Companies 2023, June 2023.
- J.D. Power, Satisfaction with Life Insurance and Annuity Products Climbs as Customers Embrace Digital, J.D. Power Finds, October 2023.
July 16, 2024
Editors: Caroline Picard and Jesse King
- Major update to include new product recommendations and formatting.
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