Best cheap life insurance companies of 2024

Buying a life insurance policy that best suits your needs and budget doesn’t have to be out of reach. You can find the best cheap life insurance if you shop around and compare term life insurance policies.

What is the cheapest type of life insurance?

Term life insurance is generally the cheapest type of life insurance. Unlike permanent life insurance, term life insurance does not include cash value and only locks in rates and coverage for a set period of time, or term.  

Term life insurance

• Typically has policy terms between 10 to 30 years, though some insurers offer longer terms. 
• If you die during the term, your beneficiaries will receive a death benefit. 
• Before the term ends, you typically have the option to renew, though likely at a higher rate each year. Always check your policy to determine what happens at the end of the term. 
• To maintain life insurance coverage, you may also have the choice to convert your term life policy to a permanent policy. Or you might choose to purchase a new policy. 

The average cost of life insurance

Term life insurance policies are generally cheaper than permanent life insurance policies like whole life insurance or universal life insurance policies. Your rate will depend on the insurer you choose and the factors outlined above.

For example, the average annual cost of term life insurance is $153, for a $250,000, 20-year term life insurance policy for a healthy, 30-year-old female. A male of the same age and health will pay an average of $176 for the same policy.

A 20-year $1 million term life policy for the same female would cost an average of $325 annually. A male would pay about $408 on average.

Factors that affect the cost of life insurance

Your life insurance rate will depend on factors such:

• Age.
• Gender.
• Desired life insurance coverage amount and term. 
• Nicotine or marijuana use status.
• Health and medical history.
• Prescription drug health.
• Family medical history. 
• Driving record.
• Criminal record.
• Risky hobbies or professions, if applicable.

How to get the cheapest life insurance

If you’re shopping for coverage, there are several things you can do to make sure you find the most affordable life insurance policy for your needs. 

Shop around for a policy

Getting life insurance quotes from multiple insurers gives you a higher chance of finding the cheapest rate based on your age and medical history. Since rates can vary from company to company, looking at several quotes allows you to get a baseline price unique to your profile. 

Purchase term life insurance

If you want coverage but are on a tight budget, consider term life. When comparing term to permanent life insurance, Salka points out that “people can purchase larger coverage amounts for less.” She also says term life is a good option if you want to ensure your loved ones are covered for a specific period of time, such as while you have dependents living at home or the years you have left on your mortgage.  

However, if you think a policy that covers you for life would be better in the long run, don’t discount a whole life insurance policy. If you go with term life insurance in your 30s or 40s and your term runs out in 20 years, converting to or purchasing a permanent policy will be more expensive. 

Avoid unnecessary riders

Riders are add-ons that enhance your coverage. Common riders include terminal or chronic illness riders, which give you access to your benefits if you’re diagnosed with a qualifying condition, and child riders, which allow you to add a term life policy for a minor dependent. 

Some riders are offered for free as part of your policy, but others will increase your premium payment. Evaluate the benefits and drawbacks of any rider before you add it, making sure that the potential premium increase is worth the additional coverage benefit. 

Buy life insurance sooner 

The younger you are the lower your life insurance rates. That’s because age and health are primary factors used by insurers to determine rates. This is true of both whole and term life insurance. 

If you’re purchasing term insurance at a young age, make sure you carefully consider the term length. For instance, if you’re 30 years old and you only purchase a 10-year term policy, you’ll need to shop for coverage again in your 40s, and that will likely mean higher rates. 

Work toward a healthy lifestyle

Life insurance rates hinge heavily on your health. Using nicotine products or being overweight will lead to higher rates. Avoiding or quitting smoking, eating well and exercising can help you stay healthy and give you a better chance to lock in lower rates.

How much life insurance do you need?

You should have enough life insurance to cover the needs of your dependents. This usually means taking into account one or more of the following:

• Your annual salary and the number of years you would want it replaced if you were to die during your working years.
• Existing debts that a dependent would need to take on after your death, such as a mortgage. 
• Educational expenses, such as tuition, for children.
• Whether or not you want to cover your final expenses, such as a funeral. 
• Any inheritance you may want to leave your life insurance beneficiaries.

It can be difficult to anticipate expenses, especially as you factor in career changes, inflation, retirement or other investment assets and milestones, such as having a child or buying a home. For some shoppers, the best option to determine your life insurance needs is to call a professional. 

According to Alison Salka, Ph.D., the senior vice president and head of LIMRA Research, “Life insurance is a piece of a broader whole: your financial security.” As such, she suggests consumers speak to a financial advisor who can take a holistic look at their financial needs and determine the amount and type of coverage that suits them.