The Cheapest Life Insurance Companies

The cost of life insurance may vary, and monthly premiums can be as high as $365 or as low as $18.

Life insurance will help protect your loved ones from financial disaster when you are no longer around. Depending on the type of policy you choose, you can get insurance coverage for a certain number of years or your whole life.

A life insurance policy is an agreement between an individual and an insurance company. According to the terms of the agreement, the individual makes premium payments in return for a death benefit the provider will pay to the policy owner's beneficiaries.

Various factors affect life insurance rates, including age, gender, smoking status, overall health, height, weight, lifestyle habits, family medical history, amount of coverage and how long the policy will last. The cost of life insurance may increase due to risk factors or the overall coverage amount.

Insurance costs vary from person to person. It is possible to find cheap life insurance that will not break the bank, which is especially important for individuals with a limited or fixed income. Similar to other insurance or financial products, life insurance companies use differing rate calculations, with some offering cheaper premiums than others.

You can find affordable life insurance with some research. Regardless of your age or health status, life insurance is worth considering, as it allows you to protect the future of your loved ones.

When looking for low-cost life insurance, it is crucial to understand the factors affecting premium prices. Among these are age, overall health and smoking status. The company that offers you the cheapest life insurance option will depend on your circumstances. Transamerica typically provides the most affordable life insurance for smokers and across all age groups.

Term life insurance refers to policies that provide coverage for a specified period.

Unlike whole life, term life insurance is less complicated and more affordable because it is straightforward insurance that lasts for a limited number of years. Generally, term life is the cheapest form of life insurance.

The least expensive term life insurance will vary based on several factors, such as age, gender, occupation, location, lifestyle, overall health, smoking status and policy term.

The least expensive term life insurance varies depending on your age. For instance, the cheapest option, based on a coverage amount of $500,000, for a 20-year term for a 30-year-old individual is Transamerica, at $237 per month. The same company has the cheapest average rate for 40-year-olds at $360 each month. Meanwhile, State Farm offers the most affordable premium for 50-year-olds at an average rate of $1,079 monthly.

Life insurance tends to cost more based on your age when you sign up for it because insurance companies consider how long you are likely to live after the issuance of the policy or the length of time it will be in force. Typically, the cost of life insurance increases per decade of life.

For instance, the average monthly rate increase for a 40-year-old is 31.10% for a 10-year term, 52.09% for a 20-year term and 63.76% for a 30-year term. Life insurance for seniors tends to be the most expensive, with Transamerica offering the cheapest for 60-year-olds and State Farm having the least expensive term life insurance for 70- and 80-year-olds.

^{The quotes above are based on a policy with $500k coverage.}

Where you live can affect the cost of your life insurance policy. Rates vary by state, and different companies take the lead in offering the best premiums in various locations.

In most states, Mass Mutual is the cheapest life insurance company and boasts the most affordable rates in 33 states. Nationwide comes in second, offering the most affordable life insurance in nine states. Transamerica has the cheapest options in six states and Mutual of Omaha in two states.

^{The quotes above are based on a policy with a 20 year term length and an average amount of coverage needed per state, based on per capita income for a 30-year-old individual.}

More coverage provides better protection but leads to higher premiums. When calculating the coverage you need, the safest option is to multiply your annual salary by 10–12 times. MoneyGeek recommends getting $500,000 coverage, which is 10 times the annual average wage in the U.S..

The most affordable company will also vary depending on the coverage. Transamerica is the cheapest company for 30-, 40-, 50- and 60-year-olds looking for $250,000, $500,000, and $1 million in coverage. Meanwhile, Progressive has the most inexpensive term life insurance for 70-year-olds across all coverage levels.

^{The quotes above are based on a policy with a 20-year term length.}

Insurance companies view smokers as high-risk individuals because they are more prone to severe illness and can have a shorter lifespan than non-smokers. These health effects result in higher premium rates on life insurance for for people who smoke. The difference in insurance rates between a smoker and a non-smoker can range from 185.71% to 454.62%.

Transamerica offers the lowest average monthly rate for smokers at $63, followed by Mass Mutual at $75 and State Farm at $78. Based on average rates, the most expensive option is Nationwide, at $118 per month.

^{The quotes above are based on a policy with $500k coverage and a 20-year term for a 30-year-old individual who smokes.}

Your health rating is one of the most significant determining factors when it comes to the cost of your insurance. It is based on your medical history, family medical history, smoking status and medical condition. Life insurance health ratings are typically categorized into the following classifications:

• Preferred
• Standard
• Preferred Smoker
• Standard Smoker
• Preferred Plus
• Standard Plus
• Substandard Insurance policies can cost 46.25%–101.01% more for a low-health individual than for someone with excellent health. Based on average monthly rates, Mutual of Omaha is the cheapest company for individuals with low health ratings, typically charging $22 per month. Transamerica is not far behind at $31 monthly, followed by Mass Mutual, with premiums averaging $40 each month.

^{The quotes above are based on a policy with $500k coverage and a 20-year term length for a 30-year-old individual with a low health rating.}

Individuals with high BMIs are considered high-risk individuals by life insurance companies. That is because high BMI can increase the risk of certain conditions, like diabetes and high blood pressure.

In some cases, insurance providers use body mass index, or BMI, to determine an individual's level of health. This causes some individuals who have good muscle mass percentage, like bodybuilders, to sometimes be considered obese.

Insurance can increase by 3.50%–104.04% for those who have high BMI.

On average, Nationwide offers the best rates for individuals with high BMIs. It charges an average monthly rate of $22. Mass Mutual comes in second at just over $22.52 per month, followed at just pennies more by Mutual of Omaha at a monthly rate of $22.93.

^{The quotes above are based on a policy with $500k coverage and a 20-year term for a 30-year-old individual with a BMI classified as obese.}

Insurance companies also base premiums on whether or not an individual has pre-existing conditions, which are health issues and conditions acquired before they applied for life insurance coverage.

Common pre-existing conditions include:

• Asthma
• Autism
• Cancer
• Depression and other mental health conditions
• Diabetes
• Epilepsy
• Heart disease

While most insurers are flexible regarding pre-existing conditions, eligibility for a traditional policy may vary depending on type or severity.

Individuals with pre-existing conditions tend to have more expensive premiums than those with excellent health. However, it is still possible to find cost-effective life insurance if you have a medical condition. Nationwide offers the cheapest rate at $21 per month, followed by Mutual of Omaha at $22 and AAA at $23.

Another coverage option, permanent life insurance, is designed not to expire. There are two types of permanent life insurance: whole life insurance and universal life insurance.

Unlike term life insurance, whole life insurance is guaranteed to provide coverage that will last until the policyholder's death, and it includes cash value. Despite being more expensive than term life insurance, it is the best option for people who need long-term coverage. If your highest priority is cheap life insurance, term life is the way to go.

The cheapest permanent life insurance provider for you will be based on several factors. These include your age, gender, location, smoking status and overall health.

Similar to term life insurance policies, as you age, the cost of whole life insurance premiums increase. The cheapest options may vary depending on how old you are. Transamerica typically offers the lowest rates for 30-, 40-, 50- and 60-year-olds. Meanwhile, State Farm has the cheapest permanent life insurance for 70-year-olds.

Whole life insurance is more complex than term life insurance. It has two parts: the life insurance component and the cash value component. Whole life insurance can cost up to 20 times more than term life insurance. It remains active throughout your lifetime or until a specified age, typically 100–121 years old. It also offers generally tax-deferred cash value, which can serve as a savings component.

Additionally, premiums for whole life insurance will never increase once the policy is in place, regardless of age, health and inflation. MoneyGeek evaluated companies to determine the cheapest options based on their term life insurance rates.

If you are looking for life insurance that does not require a medical exam, you have two options: guaranteed acceptance and simplified issue.

If you are looking for affordable guaranteed acceptance insurance, the best option for you is Ethos. It offers an average monthly rate of $18. Following Ethos is Mutual of Omaha, with premiums of $57 and Gerber Life with a $68 premium.

Only a few companies offer simplified issue insurance products. It is also challenging to get quote data for simplified issue products. That said, MoneyGeek experts narrowed down the cheapest, high-quality option for this type of insurance to Nationwide.

Final expense insurance is a type of whole life insurance that provides a small death benefit intended to cover funeral expenses. It is also known as funeral insurance or burial insurance. Quote data for final expense insurance is difficult to come by. However, MoneyGeek experts narrowed down the most cost-effective life insurance provider for a final expense policy to Transamerica.

Transamerica’s final expense product offering includes face value amounts ranging between $1,000–$50,000. The death benefit is income tax-free.

For this article, we investigated the cheapest options for life insurance. But just because something is cheap does not always mean it’s your best option. The purpose of this section is to outline which criteria you may want to consider when deciding whether or not you need life insurance.

So, the question we want to answer here is, “Is it practical for someone with my specific circumstances to get life insurance?”

Though most people need life insurance, not everyone does. For many, it may be an unnecessary expense. If you meet certain criteria, it is okay to forgo life insurance altogether. However, many people, especially breadwinners for their families, should buy life insurance.

Depending on your circumstances and financial situation, you may not need to purchase life insurance. For instance, if your income is enough to cover all your bills and expenses, then you may not need it. However, if you have dependents or struggle to pay debts, it is good to consider life insurance.

Finding cheap life insurance may be challenging, but it is manageable if you take a few extra steps, like shopping around and seeking professional help. Be sure to review your policy to check for unnecessary add-ons that may increase the price of your coverage.

Shopping for life insurance requires research and a proper understanding of the various options available. Your circumstances and needs will determine how much your policy will cost. You may also choose between lifetime coverage and one that is limited to a specific period.

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.

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.