10 Best Life Insurance Companies in Alabama

Life insurance companies in Alabama can help you find a policy to protect your loved ones.

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10 Best Life Insurance Companies in Alabama

Key Terms

  • Life Insurance covers the expenses that arise when somebody passes away.
  • A good life insurance policy can cover your mortgage payments, your child’s education, and even therapy for your loved ones should you pass unexpectedly.
  • Alabama life insurance companies can help you find a policy to suit your needs and budget.

The State of Alabama, also known as the Yellowhammer state, is located in the southern United States. It’s bordered by Tennessee to the north, Georgia to the east, Florida and the Gulf of Mexico to the south, and Mississippi to the west. With a population of 5.08 million people as of 2022, it’s the 19th-most populous state. The largest city in Alabama is Huntsville which has a population of 221,986 residents. The state capital is Montgomery which has a population of 200,603.

According to the Center for Disease Control and Prevention (CDC), the average life expectancy in Alabama is approximately 73.2 years which is significantly lower than the national average life expectancy, which is currently around 79.05 years in the United States. Over the past few years, the leading causes of death in Alabama have been heart disease, cancer, and Covid-19. The homicide rate in Alabama is around 14.2 homicides per 100,000 residents, which is higher than the national average of 7.5.

According to the U.S. Bureau of Labor Statistics, in Alabama, the 90th percentile income is currently $82,760. The median income in the state is approximately $37,250. Most financial advisors recommend purchasing a policy that has life insurance coverage for your loved ones for between 10X and 20X your annual salary. In the state of Alabama, this works out to around $827,600 – $1,655,200 dollars for most people.

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How life insurance works in Alabama

In simple terms, life insurance is an annuity contract between you and an insurance company, where you pay a certain amount of money each month (the premium) to receive a death benefit. You are covered for a set amount in the event of your death, usually paid to a beneficiary of your choosing. Depending on your policy, it may also be possible to borrow money against your death benefit. However, this money needs to be paid back, or your death benefit will shrink.

There are two main kinds of life insurance: term life insurance and whole life insurance. Term life insurance is very straightforward: it lasts for a set period of time, such as 20 years. If you die during that time, your beneficiaries get the death benefit. If you live beyond the term, you don’t get any money back. Whole life insurance, on the other hand, is permanent. You pay a set amount every month until you die. Upon your passing, the death benefit’s cash value will be paid out to your designated beneficiary. The guarantee of payment or benefit from the underwriting insurance company relies on that company’s financial strength. Typically, a financially strong insurance company will have a large market share, will offer multiple life policies, and will employ a business methodology that manages risk and growth.

Life insurance is a valuable tool for anyone who has a family to support, anyone who is financially responsible for someone else’s care, or anyone who has outstanding debt that needs to be paid off after death. If you are the sole financial provider for your family, life insurance can help provide the financial support your loved ones need in the event of your death. It can pay off any existing debt you may have, such as a mortgage or student loans, or it can help with everyday expenses such as your children’s education or your spouse’s day-to-day expenses.

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10 Biggest life insurance companies in Alabama

Alabama life insurance companies ranked by premiums written in the state.

RankCompany NameAlabama
Premiums Written
Market Share
1New York Life$456,683,37915.99%
2Northwestern Mutual$160,884,1205.63%
3Globe Life Insurance$152,396,5085.34%
4Alfa Insurance$144,934,4295.07%
7State Farm$111,280,2283.90%
8Mass Mutual$86,557,9713.03%
9Dai-ichi Life$77,752,1522.72%
10Lincoln National$74,271,7552.60%

How much life insurance do you need in Alabama?

The 90th percentile salary in Alabama is approximately $82,760. As mentioned, most financial advisors recommend that you purchase a life insurance policy that will cover your beneficiary for at least 10X – 20X your average annual income. In Alabama that works out to around $827,600 – $1,655,200. This amount will ensure that your loved ones can continue to pay their bills, settle your debts, and cover the cost of your final expenses.

You may also want to purchase additional life insurance coverage for:

  • Your mortgage (if you want your spouse and kids to be able to live in the home without worrying about mortgage payments)
  • Children’s education costs (if you want your child’s education to be covered without any additional stress to your spouse)
  • Bereavement therapy and long term care costs for your spouse and children (if you want them to spend time with a therapist after your unexpected death)
  • Any other expenses that may be unique to your family or lifestyle

Alabama life insurance laws

There are a few unique features with respect to Alabama Life Insurance Laws that have an impact on policyholders in the state.

Here’s what you need to know:

  • The “Free Look” Period: This is the required time period in which a new policy owner can terminate the policy without any penalties. Alabama residents have a 10 day period from when the policy starts to utilize this feature.
  • Grace Period: This is the amount of time, after a premium payment is due, to make the payment to maintain your coverage. According to the Insurance Code of Alabama (the laws governing insurance products and insurance agencies), life insurance companies must allow at least 30 days after a payment due date to settle the payment. This guarantees that during that period, your provider cannot cancel your policy.
  • Contestable Period: The contestable period is the amount of time an insurer can challenge any potentially fraudulent or misrepresented claims on the coverage application. After this period ends, the policy is usually considered incontestible. Life insurance policies in Alabama become incontestable, except for nonpayment of premiums, after a maximum of two years.
  • Allowable Timelines for Claims Settlement: Once life insurance companies in Alabama receive satisfactory proof of death documents, they have to settle the payment within 30 days. If they fail to make the payment, they will have to pay interest on the unpaid amount.

Life insurance is an important financial tool for providing a death benefit to your loved ones in the event of your passing. A life insurance policy will pay money directly to your beneficiaries after you pass away from natural causes or another unfortunate circumstance. It is important to note that life insurance differs from disability insurance and can only be purchased from an insurance agent. It’s one of those things that nobody likes to think about, but it’s important to have a solid financial plan in place in case something unexpected happens.

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Joshua Holt is a licensed insurance agent (License #2785989) and founder of Biglaw Investor and Sidebar Insurance LLC, an insurance agency created by lawyers, for lawyers. His insurance expertise lies in the areas of life and disability insurance, particularly covering lawyers, doctors and other high-income professionals. Prior to Biglaw Investor, Josh practiced private equity mergers & acquisition law for one of the largest law firms in the country.

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