8 Biggest Life Insurance Companies

8-biggest-life-insurance-companies

The life insurance market in the United States is both massive and highly competitive. Though bigger may not mean better, either for consumers or for investors, it does imply a degree of longevity and financial stability in the life insurance business.

Life insurance is a policy or contract that guarantees the customer or the insured’s beneficiaries a sum of money outlined in the insurance policy. In exchange, the customer agrees to pay periodic premiums or payments to the life insurance company. Life insurance can be helpful since it can provide a measure of security for a policyholder’s loved ones by providing financial support to pay for funeral expenses and pay off debts.

Outlined in this article are the eight largest insurance companies in the United States. However, please remember that the precise ranking order of our group is based on the total volume of premiums written and may change frequently.

Key Takeaways

  • Northwestern Mutual, New York Life, MassMutual, and Prudential are the four largest life insurance companies in the United States, all holding more than 5% of the market.
  • The next biggest life insurance companies are Lincoln National, State Farm, John Hancock, and Guardian, which hold more than 3% of the market.
  • Some insurance companies offer riders, which are benefits added to policies, allowing for customization.
  • Some of the insurers offer unique coverage options, including coverage for those who are HIV positive and who have been diagnosed with diabetes.

Northwestern Mutual

Northwestern Mutual Life Insurance Company covers more than 10% of the American market, and it was the biggest life insurance company in the U.S. as of 2020. In addition to its life insurance and other insurance products, the company offers annuities, investment products, and financial planning services. The company reported revenue of $31.1 billion in 2020, up from $29.8 billion the previous year.

As a mutual insurance company, Northwestern Mutual is managed for the benefit of policyholders rather than stockholders. Policyholder benefits amounted to $11.7 billion in 2020, up from $11.5 billion in 2019. The company is privately owned.

New York Life

New York Life Insurance Company has more than 7% of the U.S. life insurance market. Apart from its life insurance business, New York Life also sells long-term care insurance, annuities, and mutual funds and operates a growing investment management business.

New York Life is a mutual insurance company and is not publicly traded. It reported $2.3 billion in operating earnings for 2020, a record high. The company also announced a dividend payout of $1.8 billion for 2021, a 36% increase since 2012. Dividends are cash payments made by companies to their customers.

MassMutual

Massachusetts Mutual Life Insurance Company, known as MassMutual, is the third-biggest life insurer in the United States. MassMutual offers a variety of insurance products, including whole life, universal life, term life, and variable universal life insurance. The company also offers disability and long-term care insurance.

In addition to insurance, MassMutual provides a full range of financial products, such as annuities, investments, wealth management, and workplace benefits, to employees through their employers.

In 2020, the company earned nearly $10.6 billion in income from insurance premiums and $23.2 billion in revenue. As a result, the company earned $128 million in net income, which decreased from the previous year’s profit of $524 million. MassMutual’s market share is over 6%.

Prudential

Prudential Financial, Inc. (NYSE: PRU) is a publicly traded financial services conglomerate offering insurance products, annuities, mutual funds, investment management services, and other products. The company was founded in 1875 and operates in 43 countries in North and South America, Europe, and Asia. Prudential had a 5.5% market share for all life insurance companies in the United States in 2020.

Prudential offers several types of life insurance, including universal and variable universal life. Prudential’s term life insurance comes in two options called Term Essential and Term Elite. Term Essential provides customers with a premium that stays consistent or level over the course of the term. Term Elite is similar but allows additional riders—or add-on benefits—such as a living needs benefit, which will pay out some of the death benefits early if the customer is diagnosed with a terminal illness.

Despite the company posting a profit of $819 million for the fourth quarter of 2020, Prudential reported a net loss for the year of $374 million due to the challenging environment during the coronavirus pandemic. Prudential had assets under management totaling $1.721 trillion in 2020 versus $1.551 trillion for the prior year. The company plans to return to profitability and pay nearly $10 billion in capital to shareholders, including in the form of dividend payments.

Lincoln National

Lincoln National Corp. (NYSE: LNC) is a financial services company offering life insurance products, long-term care insurance products, annuities, and retirement plan services. It does not operate outside the U.S. The company and its subsidiaries are marketed to consumers under the Lincoln Financial Group brand.

Lincoln National reported $630 million in written life insurance premiums versus $798 million in the previous year. That gives the company about a 4.7% share of the total. Lincoln’s net income for 2020 amounted to $499 million, down 44% from $886 million the year before.

State Farm

State Farm is primarily known for its home and auto insurance products, but it is the 6th largest life insurer in the U.S. and has been in business since 1922. State Farm offers term and whole life insurance. State Farm’s joint universal life policies can pay two individuals, such as spouses.

The company’s whole life insurance has limited pay options, which allow the customer to adjust how and when the payments are made for the coverage. However, State Farm is not licensed and does not offer life insurance in MA, WI, and NY.

In 2020, State Farm issued over $100 billion in life insurance products. By the end of 2020, there was $994 billion in individual life insurance policies in force, meaning that premiums are actively being paid on those life insurance policies. For 2020, State Farm reported premium income of $5.5 billion, paid out $584 million in dividends to policyholders, and earned $339 million in net income for the year.

John Hancock

John Hancock Financial has operated as a wholly-owned subsidiary of the Canadian insurance giant Manulife Financial Corp. (NYSE: MFC) since 2004. In addition to life insurance policies, the company offers long-term care insurance policies, mutual funds, retirement plans, and college savings plans. It has been headquartered in Boston, Massachusetts, for 150 years. John Hancock holds about 3% of the U.S. market for life insurance.

In 2020, Manulife had nearly $1.3 trillion in assets under management, which represented a 10% increase from 2019. The company posted a profit of $5.9 billion for 2020—a $300 million increase from the prior year.

John Hancock offers term life, permanent life, universal and variable universal life insurance policies. The company also offers a program that encourages healthy behaviors called the Vitality program. The program provides access to discounts and incentives as well as fitness and nutrition information to reward healthy behavior and activities. Through the company’s Aspire program, John Hancock provides term or permanent life insurance coverage for customers that have been diagnosed with Type 1 or Type 2 diabetes.

Guardian

Guardian is the 8th largest life insurer in the United States. Guardian is also a mutual insurance company, which means customers can share in their dividend payments. Guardian has paid a dividend each year since 1868 and is expected to pay over $1 billion to policyholders in 2021. Guardian offers universal and whole life insurance policies, including survivorship insurance, which insures two people on one policy.

Guardian also offers whole life insurance to healthy people who are living with HIV. However, certain criteria must be met, including policyholders must be between the ages of 20 and 60 years old, be on a highly active antiretroviral therapy, and be under the care of a doctor specializing in HIV. The company reported $85.5 billion in assets under management, earned $11 billion in premiums, resulting in $147 million in net income for 2020.

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