Life insurance can be a crucial part of financial planning, providing security for your loved ones when you're no longer around. However, with monthly premiums ranging from as little as $18 to as much as $365, choosing the right policy can be overwhelming. Factors such as age, health status, and coverage amount all influence the cost of life insurance. But regardless of your financial situation, finding affordable life insurance is possible.
To help you make the best decision, we've compiled a list of some of the cheapest life insurance companies in the United States. Our guide offers valuable insights for individuals with limited or fixed incomes, and also highlights the importance of life insurance for everyone, no matter your age or health status.
Cheapest Life Insurance Policies: What To Look For
Several factors can make a life insurance policy cheaper and more affordable. First and foremost, the type of policy you choose can have a significant impact on the cost. term life insurance policies, which provide coverage for a specific period of time, are typically more affordable than permanent life insurance policies, such as whole life insurance, universal life insurance, and variable life insurance. This is because the insurer's risk of paying out a death benefit is lower with term life insurance, as the policy only covers the insured for a specific period of time.
Other factors that can impact the cost of a life insurance policy include the insured's age, gender, health status, and lifestyle habits such as smoking. Historically, women have been charged lower life insurance premiums compared to men. This is because women have a longer life expectancy on average, meaning that insurance companies face a lower risk of having to pay out a death benefit. However, the difference in life insurance rates between men and women has been decreasing in recent years due to legislation prohibiting gender discrimination. Younger individuals and those in good health are generally considered to be a lower risk to insure, and thus may be able to secure lower premiums. Additionally, individuals who engage in high-risk activities or have pre-existing medical conditions may face higher premiums.
The amount of coverage you choose can also affect the cost of your policy. Generally, the more coverage you need, the higher your premiums will be. However, it's important to ensure that you have enough coverage to adequately protect your loved ones in the event of your death.
Cheapest & Most Affordable Overall: Transamerica
Multiple policy types
Offers a comparison and quote tool online
Up to $10 million in coverage with Term Life Insurance
Customer experience score is below average
Mobile app only caters to those who will retire
Transamerica provides a stellar selection of life insurance policies across all 50 states except New York. Its product offerings include term, index universal and whole life insurance. The insurer also offers final expense life insurance and policies for foreign nationals. Transamerica covers those under the age of 18 with its universal life policy. It offers life insurance to smokers and even a possible rate decrease after two years if they kick the habit. Transamerica doesn’t require a medical exam for its permanent or term coverage policies.
With Term Life Insurance, you can opt for a 10-, 15-, 20-, 25-, or 30-year term with a face value from $25,000 to $10 million. Almost anyone between 18 and 80 can apply for this policy type.
Index Universal Life Insurance coverage ranges between $25,000–500,000, depending on the policyholder’s assigned category or band. Whole Life Insurance has a face value of $100,000 or more, and Final Expense Life Insurance provides a face amount of $1,000–50,000 plus a death benefit.
Transamerica Monthly Policy Cost
Cheapest for Seniors: Progressive
Flexible policy payment terms
Quote tool available online
Offers several policy types
Not accredited by the Better Business Bureau
Low customer reviews on the BBB website
Progressive has a wide range of life insurance products that cater to different consumers. You can choose term, whole, universal, final expense or short-term life insurance with Progressive. Applicants don’t need to undergo a medical exam if they select a short-term or final expense life insurance policy.
The insurer offers term life insurance for 10, 15, 20 or 30 years with coverage up to $2 million. Final expense coverage ranges from $5,000–35,000, while short-term life insurance coverage, or a one-year policy, can reach up to $200,000. Consider whole life or universal insurance if you prefer a permanent policy, which means you’re covered until you pass away.
Progressive Monthly Policy Cost
Cheapest for Smokers: MassMutual
Provides numerous policy types
You can compare multiple policies online
Above-average customer service rating from J.D. Power
You can’t file a claim online
No online quote tool
MassMutual is one of the largest life insurance companies in the U.S., offering term, whole, universal and variable universal life insurance — even to those who smoke. The carrier also provides LifeBridge, a unique life insurance program for eligible parents and legal guardians. In case of an unexpected death, policyholders are covered by a $50,000, 10-year term that funds the educational costs of beneficiaries.
A term life insurance policy with MassMutual can cover policyholders between the ages of 18 to 75 for 10, 20 or 30 years plus a lump-sum death benefit. Its coverage ranges from $100,000 up to $5 million. Whole life insurance caters to policyholders up to 90 years old and offers a $25,000 death benefit while universal life insurance has a $50,000 minimum coverage. Variable life insurance best suits those who prefer a permanent policy, death benefits, flexible premiums and the opportunity to invest net premiums.
MassMutual Monthly Policy Cost
Cheapest With No Medical Exam: Nationwide
Offers several life insurance types
Above-average customer service based on J.D. Power study
Offers the option to file a claim online
Quote tool only available for term life policies
Nationwide is a reliable insurance company and offers whole, term, universal and variable universal life insurance. Smokers can also apply for a Nationwide policy but may qualify at a higher-than-average rate.
Children can be covered by Nationwide until they are 22 years old or married through riders on a parent’s policy. It’s also unlikely that healthy applicants and existing Nationwide Property & Casualty policyholders need a medical exam to qualify for a life insurance policy.
With a Nationwide term life policy, you can get coverage for 10, 15, 20 or 30 years, the option to renew annually until you’re 95 years old, plus a death benefit if you pass away. You can also opt for a permanent life insurance policy until you reach 65. Nationwide provides long-term care for those who need extra support to fund home-based or facility care and meal plan services.
Nationwide Monthly Policy Cost
How Much Life Insurance Should You Buy
Making the decision to purchase life insurance is a crucial step in protecting your loved ones' financial future in the event of your untimely passing. However, determining how much life insurance you should buy can be a challenging task. It depends on various factors, including your age, income, debt, and family obligations. The right amount of coverage can provide peace of mind and security, while inadequate coverage could leave your loved ones with financial stress and instability.
Suppose you are an independent adult without any financial dependents. As an example, let's say you are 30 years old and earn a yearly salary of $50,000. You have a total debt of $30,000, consisting of $20,000 in student loans and $10,000 in car loans. You have savings of $10,000. We recommend that you purchase a life insurance policy with a 10-year term and coverage of around $500,000. However, if you get married or have children, it is essential to review and update your policy as your financial and family circumstances change.
Young College Student
Let's say you are a 20-year-old college student with no dependents, currently working part-time to cover your living expenses while you attend school. You have a student loan debt of $15,000, and no significant savings or investments. In this scenario, it's essential to consider the potential financial burden on your family in the event of your unexpected passing. While you may not need a large life insurance policy, it's still important to have some coverage to help your family cover your final expenses. We recommend purchasing a small term life insurance policy with a coverage of $10,000 to $25,000, which can be relatively affordable for a young person. This amount can help cover your funeral expenses and any remaining debts, so your family does not have to bear that financial burden. As you progress in your career and start a family, you can review and adjust your coverage accordingly.
Married Without Children
Let's say you are a married couple, both 40 years old, and have a combined annual income of $150,000. You have a mortgage of $250,000, and no other significant debts. You have a total of $100,000 in savings and investments. In this situation, financial experts recommend that you purchase a life insurance policy with a term of 15 years and coverage of at least $500,000. This amount would help your spouse cover your income, pay off any remaining debts, and maintain their lifestyle if one of you were to pass away. As your financial and family situation changes, it's essential to review and adjust your policy accordingly. For example, if you plan to have children in the future, you may need to increase your coverage to ensure their financial security.
Married With Children
Let's say you are a married couple, both 35 years old, and have a combined annual income of $120,000. You have a mortgage of $300,000 and a car loan of $20,000. You also have $50,000 in student loan debt. You have two children, aged five and three. Your older child has a 529 college savings plan with $10,000, and you have $30,000 in combined savings. In this situation, financial experts recommend that you purchase a life insurance policy with a term of 20 years and coverage of at least $1 million. This amount would help your spouse and children cover your income, pay off debts, and continue to support your children's education and future expenses if one of you were to pass away.
Let's say you are a 70-year-old retiree with failing health. You have no significant debt and have already paid off your mortgage, but you still want to leave a financial legacy for your children and grandchildren. You have a small pension and social security benefits that help cover your daily living expenses. In this scenario, it's essential to consider the high cost of end-of-life care and the potential financial burden on your family. While you may not be able to purchase a traditional term or permanent life insurance policy due to your health condition, you may still be able to get a final expense or burial insurance policy. These types of policies are designed to cover funeral expenses and other end-of-life costs, typically ranging from $5,000 to $25,000 in coverage. It's important to note that the premiums for these policies may be higher than traditional life insurance policies, as they are intended for individuals with higher health risks. However, they may still be a viable option to help provide peace of mind for you and your family in the event of your passing.
How to Get More Affordable Life Insurance
The rates from the companies mentioned above are some of the most affordable life insurance premiums available. However, there are ways to potentially lower life insurance costs even more.
Take some time to decide
Don’t rush your decision. Rushing into a life insurance purchase could mean you end up with more coverage than you need. Take the time to assess your financial situation and determine how much coverage you require.
Get professional help
Working with a financial advisor can help you identify the best options for your budget and needs. A professional can guide you through the process and help you understand the features of different policies.
Companies often charge differently for similar policies. They may also offer different features and inclusions. Compare prices and coverage options to find the best inexpensive life insurance for your needs.
Don’t get unnecessary coverage
Read the fine print. Check the riders offered or included in your policy. Consider which coverage you can do without.
Get life insurance while you are young
The cost of life insurance increases as you age. So, it is better to purchase a policy while you are young and healthier.
Consider laddering your coverage
Buying the right amount of coverage is essential. However, your needs may change as you age. You can opt to get a series of term life insurance enough to cover specific periods and a small whole life policy to pay for final expenses.
Frequently Asked Questions About Cheap Life Insurance
Understanding life insurance can be challenging, especially if you are a first-time buyer. MoneyGeek answers some frequently asked questions to give you more insight into the topic.
Learn More About Life Insurance
Expert Advice: Finding Affordable Life Insurance
- What factors affect the cost of life insurance? What does it mean to have cheap life insurance?
- What is the best strategy to find cheaper rates on a life insurance policy?
- What types of life insurance policies are the cheapest? Why?
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To obtain cost data for term life insurance policies, MoneyGeek collected quotes from 13 companies across all 50 states for ages 30–70. We utilized the same term life insurance cost data to determine which companies had the cheapest whole life insurance policies.
About Mark Fitzpatrick
- Better Business Bureau. "Progressive Corporation." Accessed January 9, 2022.
- MassMutual. "MassMutual’s LifeBridge Program." Accessed January 9, 2023.
- Nationwide. "What Is No-Exam Life Insurance and How Does It Work?." Accessed May 17, 2023.