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When people think of life insurance, the first options that come to mind are term life and whole life insurance, with an ongoing debate on which is better. Then there's the elusive universal life insurance policy.
Best Universal Life Insurance
- Prudential Life Insurance
- Mutual of Omaha Life Insurance
- State Farm Life Insurance
- Nationwide Life Insurance
- Penn Mutual
- MassMutual Life Insurance
- USAA Life Insurance
Those with complex financial goals may be drawn to this insurance plan as it offers financial protection and is an excellent way to grow and diversify your assets. But, most importantly, buyers who are worried about the limits of a whole life insurance policy will continue to see growth as long as they make payments toward a universal policy.
So, if you're interested in upping your wealth-building game with a universal life insurance policy, here are a few companies to consider.
Compare Universal Life Insurance Policies
Methodology: How We Chose the Best Universal Life Insurance
We know that picking the right insurance policy is just as important as the decision to have one. Our job is to deliver the most comprehensive and reliable information so you can make the best choice.
Our round-ups and reviews generally consist of trustworthy companies. Financial strength and customer satisfaction are hallmarks of a credible life insurance provider.
Financial strength demonstrates the ability of a company to withstand any economic situation, like a recession. If a company is in good financial health, it indicates longevity and the ability to meet financial obligations, including paying your claims. We source our data from AM's Best, a popular financial rating agency that rates providers from A++ to F. We recommend buyers tread carefully with any company with a score lower than a B.
We also consider how a company ranks in JD Power's life insurance customer satisfaction survey, a data analytics and consumer survey platform. The survey rates companies that provide the most customer satisfaction to the least and assign each provider points on a scale of 1,000. In addition, the study indicates industry averages, indicating which companies fall above and below industry averages.
Accessibility is also a primary element we examine when reviewing life insurance companies. Accessibility refers to a policy's affordability and inclusion of those in different risk classes (health classifications, age, lifestyles, etc.). No company wants to turn away sales, in theory. Unfortunately, life insurance has historically been highly segregated, with many companies refusing coverage or reducing coverage options for specific populations. Many companies have realized it's not as simple as advertising the product to everyone.
Finally, we use a company's website to evaluate the expansiveness of its product line. For example, some companies present an exhaustive list of long-term and short-term policies, while others only provide term life insurance. A no-medical exam option is also increasingly sought after among prospective applicants. So we take note of companies that offer the opportunity.
Universal Life Insurance FAQs
Universal life insurance is a permanent life insurance policy that offers a death benefit and a cash value component. In contrast to a whole life insurance policy, universal life insurance offers flexible premium payments and tends to be cheaper than a whole life policy.
There are several downsides to a universal life policy. First, a flexible payment structure may entice some, but you still have to monitor your policy and pay enough premiums to keep your policy active.
Getting caught up in the fact that you don't have to repay it if you take loans against your policy is easy. Unfortunately, the interest still builds over time. Your policy will lapse if the balance goes low enough and you no longer have coverage.
The problem with universal coverage for some is also its appeal to others. It gives buyers options that may or may not be worth taking advantage of in the long run.
Universal life insurance is attractive for its cash value component, flexible payment structure, tax benefits, and potential for higher returns.
Whole life is better if you like the simplicity of having lifelong coverage at a fixed rate with guaranteed cash value growth. Universal life insurance may attract those seeking permanent coverage with flexibility and higher returns. A bit more risk could significantly increase your returns, particularly with variable plans. Modern whole and universal life policies offer early withdrawals and other exciting features. So if you're looking for a long-term financial vehicle, either could be a good option.
Unviersal Life Insurance Companies
Prudential Universal Life Insurance
Prudential is our top pick for variable universal life insurance. You assume more risk with a variable universal life insurance policy. Interest and returns can rise and fall with the market. However, the risk is counteracted by significantly higher returns in the right market.
Prudential has three variable universal life insurance plans for buyers ready to take on moderate to high-risk investments. Prudential VUL Protector is a no-lapse guaranteed policy. The no-lapse feature ensures your insurance remains active even if your cash value reaches zero as long as you pay your premium. Of course, this would only apply to buyers making low contributions with large withdrawals. But it would be a risk with other companies for buyers who take regular withdrawals.
This variable life insurance program offers 60 investment options and a fixed-rate option for those with a lower appetite for risk. Don't let this portfolio of options intimidate you. Prudential agents can help you make informed decisions and distribute your investments without excessive stress.
Prudential's VUL Protector Survivorship policy gives you all the benefits of the VUL Protector plan for two people. It would then pay out after the second insured dies, which can help with estate taxes. In addition, early withdrawal and loan options are available until the policy pays out.
For those willing to take on high risk for high returns, The PruLife Custom Premier II invests your cash value in over 50 investment subaccounts and a fixed rate option for consistent returns. It also offers automatic rebalancing and dollar cost averaging.
Want a buffer against economic downturns? Then, you can supplement your PruLife Custom Premier II policy with an S&P500 rider to offset the bear market risk. This rider promises a 1% minimum guaranteed interest rate, regardless of how the market performs.
Finally, Prudential offers a hybrid universal life policy. The Prudential Flex Guard is an indexed and variable universal life insurance policy to optimize your cash value-building strategy.
Mutual of Omaha Universal Life Insurance
You can choose between two indexed universal life insurance plans at Mutual of Omaha. Indexed universal life insurance invests your cash value in indexed stocks and options instead of individual stocks. This option may be preferable to those who'd like moderate returns with a lower risk profile.
Its first option is the Life Protection Advantage plan. This plan offers no lapse protection and accumulates cash value at an interest rate that mimics the performance of the S&P 500. Mutual of Omaha invests your account in three interest-crediting strategies and a fixed account with a guaranteed interest rate of 2%.
Similar to the Life Protection Advantage, the Income Advantaged Indexed Universal Life policy mirrors the performance of the S&P 500. This upgrade includes a built-in Guaranteed Refund Option rider, which allows you to surrender your policy value for 50% to 100% return of premium, depending on how long you've held the policy.
Of course, the longer you have a universal life insurance policy, the more growth you see. With many options for loans, living benefits, and other early withdrawals, it's easier than ever before to keep Mutual of Omaha permanent life insurance plans open and growing.
State Farm Universal Life Insurance
State Farm received stellar marks, earning the top spot on JD Power's life insurance customer satisfaction survey for multiple years. State Farm earned 839 out of 1,000 points. State Farm agents sell everything from homeowners to auto, life, and other popular insurance products. So it's easy for agents to bundle services for discounts and easy plan management. Many customers enjoy having one trusted agent handle all their insurance needs.
State farm offers universal, survivorship, and joint universal life insurance policies. Based on your chosen policy, coverage limits range from $25,000 to $50,000. All life insurance policies are quoted through an agent. So whether you call them or meet in person, a State Farm agent can help you decide what you want and complete your application.
Unlike Prudential, New York Life, Mutual of Omaha, and other similar companies, State Farm has a broad base of insurance products. The companies mentioned above offer aggressive and diverse financial products. State Farm life insurance is generally conservative, offering stable options for the average American family. However, if you're looking for the wealth-building opportunities of universal life, State Farm lacks competitive options.
Nationwide Universal Life Insurance
Nationwide sells all types of universal life insurance: universal, variable universal, indexed universal, and universal survivorship policies. The company also offers a no-lapse guarantee option to protect your policy from ending if your cash value reaches zero.
With Nationwide, you get three accelerated benefits (chronic, critical, and terminal illness) at no cost. Additionally, Nationwide offers a hybrid long-term care and universal insurance program called CareMatters. CareMatters gives you a fixed monthly benefit, and you can use the funds as you see fit.
As you might've noticed, Nationwide's riders offer options for withdrawals later in life, primarily focused on health. Like State Farm, Nationwide is a large insurance provider that covers multiple areas of insurance. But it doesn't have a strong presence in other financial products (like universal plans that open the door for wealth-building).
Still, Nationwide life insurance plans are highly accessible to American families. The application process can also be more manageable. It helps interested parties get their foot in the door with a reliable life insurance plan without the much more complicated conversations about investments, financial indices, etc.
Once you feel more comfortable, financial giants like Mutual of Omaha and Prudential can help you transition with a potentially more extensive and aggressive plan. Nationwide fills the critical role of getting hesitant buyers in the door. Even if the worst happens and you can't get a bigger plan, having the protection of a Nationwide life insurance policy could transform a buyer's end-of-life experience.
Penn Mutual Universal Life Insurance
Insurance companies use medical exams to gauge your risk class when applying for life insurance. However, some applicants would rather pay a higher premium to skip a medical exam because they're concerned they won't qualify for coverage or don't want to do one.
If this sounds like you, Penn Mutual's got you covered. This insurer provides up to $7.5 million in no-medical exam coverage for healthy shoppers between the ages of 20 to 65 years. No medical exam life insurance policies are still subject to medical questionnaires.
Penn Mutual plans are also made primarily for young, healthy buyers. Company representatives can help you evaluate your options. If you face a high risk of being denied or the benefits of a medical exam policy are essential, agents can advise you based on soft underwriting.
Particularly when talking about no medical exam life insurance policies, its agents must be able to assess your likelihood of approval and give you the best advice. Penn Mutual agents frequently meet this burden.
MassMutual Universal Life Insurance
MassMutual offers standard universal, variable, and survivorship universal life policies. Unlike a term or whole life insurance policy, a universal life policy allows you to adjust your premium at different coverage points. Doing so would also increase or decrease your final death benefit.
MassMutual is flexible with when and how often you alter your premiums. Buyers have the option to change rates each month based on life circumstances. Of course, MassMutual offers exciting and potentially fast-growing opportunities. However, these plans tend to perform best in the long run when early deposits are higher.
A MassMutual life insurance agent or financial advisor can help buyers make plans with room for changes to meet short-term and long-term financial goals. But, most importantly, as this category suggests, MassMutual professionals can help you adjust when life changes for better or worse.
USAA Universal Life Insurance
USAA is known for offering affordable and comprehensive financial products to military members. Some buyers may be surprised that it offers its life insurance policies to the general public. Still, military members enjoy unique benefits. For instance, your USAA policy comes with a Life Event Option rider. This rider gives you up to $100,000 for qualifying life, like having a child or getting married.
USAA is also uniquely willing to offer full coverage to active duty service members. If you're looking for multi-million dollar policies, you might reorient yourself toward companies like Columbus and New York Life. USAA's term and whole life policies have modest death benefits. However, USAA's more modest policies are more accessible than other life insurance policies. Its military-specific benefits and standard riders are often more than enough to meet many buyers' needs.
With your traditional universal life insurance plan, USAA invests your cash value into the company's portfolio. You also get a 1% minimum guaranteed interest rate to minimize risk. An indexed universal life policy with USAA comes with a 0% floor on interest rates, and you assume slightly more risk with moderate returns.
Universal Insurance Companies Ranked by Customer Satisfaction
Universal life insurance offers lifelong coverage, flexibility, and tax-advantaged cash value growth opportunities. Most importantly, its benefits do not expire as a term policy would.
Company | JD Power Rankings (Max 1,000 points) |
State Farm | 822 |
Nationwide | 813 |
Northwestern Mutual | 807 |
Pacific Life | 801 |
Mutual of Omaha | 795 |
Globe Life | 788 |
MassMutual | 782 |
John Hancock | 781 |
New York Life | 777 |
Principal Financial | 776 |
Guardian Life | 775 |
Lincoln Financial Group | 773 |
Securian | 769 |
MetLife | 756 |
Prudential | 753 |
Protective Life | 752 |
Equitable | 749 |
Primerica | 747 |
Transamerica (AEGON) | 747 |
AIG | 729 |
Brighthouse Financial | 714 |
Additionally, here's how seven companies stack up with AM Best.
Company | Financial Strength |
Prudential | A+ |
Mutual of Omaha | A+ |
State Farm | A++ |
Nationwide | A+ |
Penn Mutual | A+ |
MassMutual | A++ |
USAA | A++ |
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Read our editorial standards.
Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.
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