What are the top 5 term life insurance companies?

Dave Ramsey advises people to avoid cash-value life insurance and any coverage that blends insurance with an investment or savings program.

Life Insurance Policies to Avoid

• Whole Life Insurance: Combines coverage with a savings account, which Ramsey considers expensive and a poor investment.
• Universal and Variable Life: Other forms of permanent life insurance featuring cash-value accumulation.
• Return-of-Premium Policies: Costs extra money for a refund of payments if you do not die during the term; Ramsey says you should just invest the difference instead.
• Life Insurance Riders: Rejects add-ons like accidental death or return-of-premium riders as costly marketing gimmicks.

Other Specific Coverages to Avoid

• Short-Term Disability Insurance: Ramsey recommends long-term coverage instead, advising you to use your emergency fund to cover short-term gaps.
• Low-Deductible Health Plans: Advises against low-deductible or copay-heavy health plans in favor of high-deductible options paired with a Health Savings Account (HSA).
• Credit-Monitoring-Only ID Theft Plans: Recommends full-restoration identity theft protection rather than basic monitoring services.
• Extended Warranties and Minor Add-ons: Avoids rental car reimbursement or roadside assistance add-ons on auto policies if you already have an emergency fund or alternative coverage like AAA.

You can review his complete breakdown of required policies on the Ramsey Solutions Insurance Guide.

You should usually stop or let term life insurance end around age 60 to 65, or when you reach retirement age.

When to Stop Coverage

• Kids are grown: Your children are independent and no longer need your financial support.
• Debts are paid: Your big bills, like the mortgage, are gone.
• Retirement is secure: Your savings, investments, and pension can support your spouse or family on their own.
• The term expires: Most policies end on their own between ages 70 and 80 if you do not renew them.

When to Keep Coverage Longer

• Late children: You still have young kids or dependents at home.
• Working longer: You still work and need to replace that income.
• Unpaid debt: You still have a large mortgage or major loans.
• Special needs: You care for a family member who will need lifelong support.

You can read more about evaluating your policies on Fidelity Life or check guidelines on Trustage.

For a healthy, non-smoking 60-year-old man, a $500,000 term life insurance policy typically costs between $80 and $272 per month, depending heavily on the term length you choose.

Because insurance companies price policies based on mortality risk, premiums escalate sharply for applicants in their 60s compared to younger brackets.

Average Monthly Cost Breakdown

The exact premium is fixed for the duration of the policy's term, but longer terms carry higher monthly costs. Below is the average pricing for a healthy non-smoker:

Hidden Costs & Premium Escalators

When seeking coverage at age 60, several specific mechanics can drastically impact your out-of-pocket costs:

• The Tobacco Penalty: If you use cigarettes, nicotine replacements, or vapes, your monthly premium will likely double or triple, pushing a 20-year term past $500+ per month.
• Underwriting Type: Selecting a "no medical exam" policy (simplified issue) offers faster approval but usually results in a significantly higher monthly premium than a fully underwritten policy that requires a health check.
• The Age Ceiling: Many major insurance providers restrict maximum term lengths for seniors. While a 10-year or 15-year term is universally accessible at 60, finding a 20-year or 30-year term becomes increasingly difficult and exponentially expensive.

To secure the most affordable rate, look for a policy with a Term Conversion Rider, which allows you to convert the term coverage into a permanent policy later without needing a new medical exam if your health declines.

Life insurance generally covers most causes of death, including natural illnesses, accidents, and old age, but policies exclude specific high-risk situations.

📌 Common Life Insurance Exclusions

• 🛑 Suicide (Initial Period)
  • Exclusion window: First 1 to 2 years of the policy.
  • Result: Claims are denied, but premiums are usually refunded.
  • Coverage after window: Fully covered after the initial period passes.
• 🚨 Illegal Activities
  • Trigger event: Death occurs during the commission of a felony or crime.
  • Example: Fatal overdose from illegal drugs or dying during an armed robbery.
  • Result: Payout is denied for criminal involvement.
• ⚠️ Dangerous Hobbies
  • Trigger activities: Undisclosed high-risk sports like skydiving, base jumping, or auto racing.
  • Result: Denied if the activity was hidden on the application.
  • Note: Disclosed hobbies are often covered with higher premium rates.
• ⚔️ Acts of War
  • Trigger scenario: Death while on active military duty during a war.
  • Result: Standard policies frequently exclude combat-related deaths.
  • Note: Civilian deaths from foreign wars or terrorism are sometimes covered depending on the carrier.
• 🔪 Beneficiary Homicide
  • Trigger event: The primary beneficiary intentionally kills the policyholder.
  • Result: Payout is blocked for that individual and shifts to alternative beneficiaries or the estate.
• 📝 Fraud or Misrepresentation
  • Trigger event: Lying about health conditions or smoking on the application during the 2-year contestability period.
  • Result: The insurer voids the policy and denies the claim.

Oscar Health denied 25.3% of in-network claims in 2024, representing the highest denial rate among major national ACA marketplace health insurers.

Health Insurance Denial Rates

• Oscar Health: Denied 25.3% of marketplace claims.
• Molina Healthcare: Denied 22% of claims.
• Ambetter (Celtic): Denied 21% of claims.
• UnitedHealthcare: Denied 20% of claims (down from 33% the previous year).
• Kaiser Permanente: Recorded the lowest national rate at approximately 6%.

Homeowners and Auto Insurance Denial Rates

• Allstate and USAA: Frequently flagged by public reports and consumer data for closing roughly 40% to 50% of property and homeowners claims without payment in high-risk regions.
• State Farm: Reported home insurance denial rates exceeding 41% to 59% in catastrophe-heavy markets like Florida.