Cheapest Life Insurance Companies — There’s no bad time to buy life insurance, so if you’re ready to shop, you may be wondering how to get cheap life insurance. Term life insurance is usually the most affordable life insurance policy option, but which company has the cheapest rates?
We analyzed the term life insurance rates of 21 top companies to determine the cheapest life insurance companies.
Cheapest Life Insurance Companies 2023
- American General – Great for Choices of Term Lengths
- Haven Life – Great for Life Insurance Buyers Under the age of 45
- Midland National – Great for Living Benefits
- Pacific Life – Best Cost for $1 Million Term Life
- Penn Mutual – Great for Older Buyers of 30-Year Term Life
- Principal – Great for High Issue Age
- Symetra – Best Overall for Term Life Insurance Rates
AIG/American General : Cheapest Life Insurance Companies
Buyers looking for cheap life insurance can generally find very competitive rates with American General’s Select-a-Term policy.
Pros and Cons
- Very low term life insurance rates.
- High maximum issue age of 80 for life insurance buyers.
- You can customize any term length between 10 and 35 years, such as 18 years.
- The accelerated death benefit rider can be used if the insured person has a life expectancy of 24 months or less—many competitors require 12 months or less.
Cons
- American General’s Select-a-Term policy is not renewable at the end of the level term period.
- You can convert the policy to permanent life insurance only until age 70.
Haven Life: Cheapest Life Insurance Companies
Haven Life offers especially low term life rates to younger term life insurance buyers, but you won’t get the ability to renew or convert a Haven Life policy.
Pros and Cons
- Superior financial strength thanks to its backing by MassMutual.
- The online application process is convenient.
- Policies include the Haven Life Plus rider. This gives policyholders access to free or discounted resources for creating trust and wills, end-of-life planning, and more.
Cons
- There’s no ability to renew a Haven Life policy after the level term period or convert it into a permanent policy. These features can be valuable if your health and/or needs change after you buy a term life policy.
- A maximum face amount of $3 million may not be enough to cover your needs.
- Rates are very high for life insurance buyers in their 50s and 60s.
Midland National : Cheapest Life Insurance Companies
Midland National’s Premier Term policy has competitive rates and good living benefits. An accelerated death benefit is available when customers are diagnosed with a terminal illness, chronic illness, or critical illness.
Pros and Cons
- You can take money from your death benefit in cases of terminal illness, chronic illness, or critical illness.
- The Premier Term policy has competitive term life rates that include these living benefits.
- Buyers up to age 55 (50 for tobacco users) can get a 30-year term life policy.
Cons
There’s a limited choice of other additional riders, but this is likely offset by the living benefits included.
Pacific Life : Cheapest Life Insurance Companies
Pacific Life’s PL Promise Term is a top pick in our analysis because of its low rates and top-notch coverage features.
Pros and Cons
- Low average term life insurance rates. Pacific Life offers especially low rates for $1 million in term life insurance.
- PL Promise Term policyholders can renew the policy until age 95 after their initial level term period expires.
- You can convert this policy into a Pacific Life universal life insurance policy until age 70.
Cons
If you choose to convert the term life policy, you’re limited to a universal life policy.
Penn Mutual
Penn Mutual’s term life policy has great rates across a variety of coverage amounts and term lengths.
Pros and Cons
- There are generally excellent rates for Penn Mutual’s basic term life policy but it can’t be converted to permanent life insurance in the future.
- If you have a Penn Mutual convertible term policy, you can convert any time up to age 70.
- If you convert, you can choose from any Penn Mutual permanent life insurance policy available. Some other insurers limit your options or only have one choice of policy for conversion.
- Online application is available.
- Some life insurance buyers may not be required to do a life insurance medical exam.
Cons
- You’ll have to pay more for the convertible term policy if you want that feature. Penn Mutual’s convertible term policy is not as price-competitive.
- There’s no accelerated death benefit available.
Principal
Principal’s term life policies offer competitive rates and valuable coverage features. Notably, there was not a single complaint last year to state regulators about its life insurance.
Pros and Cons
- Competitive term life insurance rates.
- Term life insurance buyers may be able to get up to $3 million in coverage without a medical exam, depending on age and health.
- You can buy a 10-year term life policy up to age 80, which is older than many competitors.
- You can renew the policy to age 95 after your level term period ends (at higher rates each year).
Cons
- You’ll have to buy the Conversion Extension Rider if you want the option to convert the policy during the level term period (or until age 70). Without this rider, the conversion period will be limited and depend on your term length.
- The minimum coverage amount of $200,000 is higher than many competitors.
Symetra
Symetra had the cheapest life insurance rates based on average costs across a range of coverage amounts and term lengths, making it a top option for term life shoppers.
Pros and Cons
Pros
- Lowest term life rates, based on the companies in our analysis.
- Symetra’s SwiftTerm policy can be purchased online and with instant approval if you qualify based on age and health.
- When your level term period ends, the policy can be renewed until age 95 (at a higher cost each year).
Cons
- The maximum issue age of 60 for a 10-year term life is lower than many competitors.
- SwiftTerm’s maximum face amount of $3 million is also lower than many competitors.
- The accelerated death benefit money available if you become terminally ill is only up to $500,000, or 75% of your death benefit—whichever is less.
What Is the Cheapest Type of Life Insurance?
Term life insurance is typically the cheapest type of life insurance, which is why we focused on term life in our analysis. It gives you a fixed premium for a specific period, such as 20 years.
At the end of this level term period, you will usually have the option to renew the policy at a higher premium each year. However, these renewal rates can quickly become too expensive. It’s best to buy the right policy length to start with so you won’t end up with high renewal rates or shopping for another policy.
What Factors Determine How Much Life Insurance Costs?
How much you pay for life insurance is determined by several factors, including the type of life insurance, the length of the policy, and the death benefit amount you choose. Your personal information will also affect how much your life insurance costs.
Here are some factors that affect life insurance rates:
- Age. The older you get, the more a new life insurance policy will cost. Term life insurance at age 50 can cost up to 212% more than a similar policy at age 30.
- Gender. Men generally pay more for life insurance because their lifespans are shorter, on average. A $500,000, 20-year term life insurance policy will cost 30-year-old males about 19% more than females of the same age.
- Term length. A shorter term will cost less, but locks in your rate for fewer years. A 30-year term costs about 90% more than a 10-year term but covers you for triple the number of years.
- Death benefit amount. The greater the life insurance payout, the more you will pay for coverage. A $500,000, 20-year term life policy will cost about 50% more than a $250,000 policy. But the policy payout is double.
- Health history. Life insurance companies usually take a look at your medical history, and standard life insurance often requires a life insurance medical exam.
- Lifestyle. Nicotine use (including smoking, patches, and gum), dangerous jobs and hobbies, your driving history (such as a DUI conviction), and your criminal record can increase your life insurance quotes or even disqualify you from a new policy.
Cheapest Life Insurance for Seniors
Our analysis found that the average cost for a 10-year term life policy for a 70-year-old female buyer is $2,650 a year for a $500,000 policy and $4,856 a year for a $1 million policy.
For male buyers at age 70, a 10-year term life policy averages $3,974 a year for a $500,000 policy and $7,581 a year for a $1 million policy.
As you get older, the cheapest life insurance life companies can change. Here are the companies with the cheapest life insurance for seniors, among the companies we analyzed.
Cheapest Life Insurance for Children
Life insurance for children is typically a whole life insurance policy that lasts for the lifetime of the child, as long as the premiums are paid. Premiums for these policies tend to be guaranteed, which means they won’t increase, and a portion of premiums goes toward building cash value. You can access the cash value while the child is alive, and use it for any purpose.
The cost of whole-life insurance for children increases as the child ages.
Child Rider for Term Life Insurance
You can’t buy a term life insurance policy for a child, but you could buy one for yourself and add a child life insurance rider. The rider will be for a certain coverage amount, such as $10,000, and will remain in place until the child reaches a certain age. At that point, you can usually convert the policy to a permanent life insurance policy for an additional cost.
A child rider for a term life insurance policy generally adds $5 to $7 per $1,000 of coverage to your annual policy premium.
How Much Life Insurance Do I Need?
When calculating how much life insurance you need, add up the financial obligations you want covered after your death and subtract existing assets that can be used by your family. Examples of financial obligations may include income replacement, a mortgage, future college tuition bills, and credit card debts. Assets may include savings and existing life insurance you have.
Our life insurance calculator can help you figure out how much coverage you need.
How to Get Cheaper Life Insurance
You can find cheap life insurance quotes by taking the right steps when shopping and applying for a policy.
Buy a Term Life Insurance Policy
You have two main options when buying life insurance: term life insurance and permanent life insurance. A term life policy provides fixed rates for a certain period, such as 10, 20, or 30 years. Two companies—Banner Life and Protective Life—offer 40-year term life policies. A permanent policy, on the other hand, can provide lifelong coverage.
If price is what matters to you most, a term life policy is the cheapest life insurance option.
A term life policy can provide cheap coverage for a period when you need it most, such as the length of your mortgage or until your kids graduate from college.
Buy Life Insurance Sooner Rather Than Later
Your age and health are two key factors that insurers consider when determining the rate you’ll pay for life insurance. The younger and healthier you are, the less you’ll pay for coverage.
If you want cheap life insurance, buy it sooner rather than later. You will lock in the cheap life insurance rate for the term length of your policy. Once you have life insurance, your rates can’t go up based on changes to your health or other factors.
Too often people think they have time to make more room in their budget or get in better health before buying a policy. The life insurance quotes you get will only go up each year you wait to apply.
Plus, you risk developing health issues as you age, which will further increase your life insurance quotes.
Create a Ladder of Life Insurance Policies to Get More Coverage for Less
One of the factors that influence how much you pay for life insurance is the amount of coverage you buy. You don’t want to skimp on coverage to save money. You need enough life insurance to protect those who depend on you for financial support.
Once you know how much life insurance you need, you can potentially keep down the cost of coverage by using a strategy called laddering.
To build a life insurance ladder, you buy a few smaller policies that expire at different times, rather than one large policy to cover you for a few decades.
It can allow you to have more coverage initially—perhaps when your children are young or you owe more on a mortgage—then taper off with time as your life insurance needs decrease.
For example, rather than buying a 30-year term policy with a $600,000 benefit, you could buy 10-year, 20-year, and 30-year term policies with $200,000 worth of coverage each. During the first 10 years, you’d have combined coverage worth $600,000. The amount of coverage you have will decline as your term policies expire, but the amount you pay will also drop over time.
Avoid Unnecessary Riders
When you buy a life insurance policy, you typically have the option to get additional features called riders. You can add life insurance riders that allow you to waive premium payments if you become disabled, add coverage for your minor children, and the list goes on.
Although the extra coverage might be appealing, you can get cheaper life insurance by avoiding riders you don’t necessarily need.
Avoid Guaranteed Issue Life Insurance If Possible
A guaranteed issue life insurance policy looks convenient because there is no medical exam and you can’t be turned down. For these reasons, it’s also a very expensive way to buy life insurance. Because the life insurance company has no information about you, it has to charge a high rate.
If you’re relatively healthy, you can generally get a much better rate by going through a traditional application process that involves health questions and possibly a life insurance medical exam.
There are now many no-exam life insurance options that are competitively priced, thanks to technology that quickly assesses your personal information from third-party data sources. Companies such as Brighthouse, Pacific Life, and Transamerica offer no-exam life insurance policies with good rates.
Shop Around for Life Insurance
It’s easy to get life insurance quotes, and quotes are free. Compare rates from at least a few companies, and know that the life insurance quotes you’ll get online are an initial estimate. Many people discover that their final quote is higher after the application process because the life insurer has been able to fully assess information about them.
Even better, work with an independent insurance broker who works with several companies and will know which ones are likely to give you the cheapest life insurance quotes based on your health and age.
Lower Your Death Benefit
Having some life insurance is better than having none, so if you can’t afford a policy with your desired death benefit amount, consider lowering the amount of coverage you buy.
For instance, people who use nicotine products usually pay more for life insurance than those who don’t. Let’s say you’re a smoker, and you can’t afford the cost of a life insurance policy that pays out $500,000. Even if that’s how much life insurance you need, consider buying a policy with a $250,000 death benefit. You might find you’re comfortable paying the cost of a policy with a lower life insurance death benefit, which at least provides some financial security to your beneficiaries if you pass away.
Improve Your Health
Life insurance companies set rates based on a wide variety of factors, including the details of your health. By improving your health—for example, by quitting smoking, losing weight, or maintaining good blood pressure and cholesterol levels—you decrease the likelihood of certain issues that can lead to an earlier death. Better health translates into lower life insurance quotes.
Methodology
Price (100% of score): Because price is the primary concern for those shopping for cheap life insurance, we gave full weight to this category. Our ratings are based on the term life insurance costs from each company for life insurance buyers ages 30 and 40. We analyzed rates for coverage amounts of $250,000, $500,000, $1 million, and $2 million and term lengths of 10, 20, and 30 years. Your rates will be different depending on your age, health, and other factors.
