Life insurance companies in Texas: how to choose one

There is no single best life insurance company in Texas. There are companies that are sound, licensed and fair with claims, and among those, the one that treats your particular age and health history best.

Lists of the best life insurance companies are written for an average applicant who does not exist. What you can do, before you look at a single price, is make sure the company you are considering is licensed, financially strong and not generating an unusual number of complaints. All three can be checked for free in a few minutes.

Check that the company is licensed in Texas

The Texas Department of Insurance licenses the companies allowed to sell insurance in the state. Its company lookup page links to a license search and to a report of every authorized company, sorted by the kind of insurance it writes. If a company does not appear there, do not buy from it. The TDI Help Line, 800-252-3439, answers questions on weekdays.

Look at the complaint record

TDI publishes complaint data for the companies it regulates. The National Association of Insurance Commissioners runs a Consumer Insurance Search that shows complaints against a company compared with its size, which is fairer than a raw count, because a very large company will always have more complaints than a small one.

Check financial strength

A life insurance policy is a promise that may not be called on for decades, so the company needs to be around to keep it. Independent rating agencies, chiefly AM Best, S&P, Moody’s and Fitch, grade insurers on their ability to pay claims. Each agency uses its own letter scale, so compare grades from the same agency rather than across them. Any agent should be willing to tell you the rating of the company that would issue your policy.

If a company fails

It is rare, and there is a backstop. If a life insurer licensed in Texas became insolvent, the Texas Life and Health Insurance Guaranty Association would cover up to $300,000 in death benefits and $100,000 in net cash surrender value per life. Those limits are set state by state, and they are one more reason to know exactly which company is issuing your policy.

The part no list can tell you

Once you have a handful of sound companies, the differences that decide your price are in how each one underwrites. Companies set their own rules for health classes, so the same blood pressure reading or prescription can land in a better class at one company than another. They set their own thresholds for medical exams. Some accept applicants with an ITIN instead of a Social Security number and many do not, which is covered in life insurance without a Social Security number.

That is why the best company for your neighbor may be a poor choice for you, and why comparing several before you apply is worth more than any ranking.

An agent for one company, or an agent for several

A captive agent represents a single insurance company and can only show you that company’s answer. An independent agent is appointed with several companies and can put their answers side by side. In both cases the insurance company sets the premium and pays the agency a commission; you do not pay the agent a fee.

Whoever you talk to, you can check that they are licensed with TDI’s license search. Our own license numbers are in the footer of every page on this site.

Who you would be talking to

Elavere Life & Retirement is an independent agency. Victor M Robles Soto is a licensed insurance producer who works with eleven insurance companies rather than one. The same conversation is available in Spanish. There is no cost to ask and no obligation to buy.

Common questions

What is the best life insurance company in Texas?

It depends on your age, health history, tobacco use and the kind of policy you want. Start with companies that are licensed in Texas, financially strong and low on complaints, then compare what each would actually offer you.

How do I check whether an insurance company is licensed in Texas?

Use the license search and the authorized companies report linked from the Texas Department of Insurance company lookup page, or call the TDI Help Line at 800-252-3439.

What happens to my policy if the insurance company goes out of business?

Another insurer usually takes over the policies. If benefits are at risk, the Texas Life and Health Insurance Guaranty Association covers up to $300,000 in death benefits and $100,000 in net cash surrender value per life.

Does an independent agent cost more?

No. The insurance company sets the premium and pays the agency a commission. Working with an independent agent means you see more than one company’s price before you decide.