Cheap life insurance

Availability
We looked for companies that we could recommend to anyone, which meant setting some initial standards for availability. We only considered providers that write term life insurance in at least 40 states with no special eligibility requirements. That meant cutting out a few popular companies, including USAA, which earns high praise for its insurance but is only available to US armed service members and their families. Our top picks are accessible to just about everyone, regardless of who you are or where you live.

Financial stability
We also checked in to make sure that all of our finalists have rock-solid financials. This is a crucial step, as strong ratings guarantee a provider’s ability to pay out on your claim if need be. We set the bar high: an “Excellent” score or better from A.M. Best (which specializes in insurance ratings) as well as top marks from a second source. We accepted A’s or higher from S&P Global or Moody’s, two of the largest independent agencies.

Conversion option
While the best cheap life insurance is always term, the option to convert your term policy to a permanent or “whole life” policy is invaluable if life throws a curveball. Say you’re diagnosed with a terminal illness; some insurers may deem you too “risky” to re-insure and refuse a policy renewal or conversion, leaving your dependents with the unexpected weight of medical expenses. We made sure that all of our top picks guarantee the option to convert to permanent insurance. By doing so, you have the ability to lock in a death benefit payout for your beneficiaries if need be.

Guaranteed renewability
All of our top picks offer a period of guaranteed renewability. During that set time (which may be as late as age 95, depending on your provider) you cannot be denied the right to purchase additional coverage. This is a great option if you’d like to extend your term by just a year or two, rather than convert to a permanent policy.

When is renewability important? Maybe you refinance your mortgage and now owe payments for longer than you originally planned. Since life insurance coverage aims to keep dependents out of tight spots — like being saddled with mortgage payments they can’t afford — it would make sense in cases like this to purchase an extra year at a time. This annual extension usually comes with a steep price hike. But should the unexpected happen, it’s still cheaper than letting your policy lapse prematurely.

Policy riders
In its most basic form, life insurance provides a death benefit to your beneficiaries. But with the right add-ons or “riders,” it can help to protect you during life as well, providing financial aid in case of disability, terminal illness, long term care needs, and so on. We put together a list of the 16 most common riders and checked in with our contenders to see who had the best selections. All of our top picks offer a great array by industry standards.

Quote comparison
Four nationwide providers nailed our basic criteria: TIAA Life, Transamerica, New York Life, and State Farm. Our final test was an apples-to-apples quote comparison to find the lowest prices. We strove for a holistic sample set, collecting estimates for both sexes, a variety of ages, and differing health levels. Unfortunately, New York Life doesn’t offer quotes online, so you’ll have to call an agent directly to see how its prices stack up.

Between the providers that did offer us quotes, TIAA Life came out on top with consistently low premiums across the board. State Farm, on the opposite end, rang in highest for most people. Our other major takeaway? Tobacco use almost always means a big price hike — generally around two times what a non-smoker would pay.

Premium prices vary by company, so be sure to compare quotes before buying
TIAA Life
State Farm
Trans­america
Female, Age 25, Excellent Health
$10.22
$11.92
$10.66
Male, Age 25, Excellent Health
$11.32
$13.22
$13.59
Female, Age 30, Fair Health
$11.82
$16.27
$12.30
Male, Age 30, Fair Health
$11.32
$18.27
$13.85
Female, Age 40, Good Health
$13.03
$19.84
$17.72
Male, Age 40, Good Health
$14.46
$23.32
$20.12
The 4 best cheap life insurance providers
TIAA Life — Consistently Low Premiums
State Farm — Best Customer Service
Transamerica — Best Range of Policy Sizes
New York Life — Most Flexible Term Lengths
TIAA Life: Consistently Low Premiums
Pros
Cons
Low premiums across the board
Outstanding conversion policy
Easy sign-up
Fewer rider options
Inflexible term lengths
Why we chose it
Low premiums across the board
TIAA took home the gold in our quote showdown, consistently offering the lowest monthly prices for men and women alike. Premiums as low as $10 per month make it affordable for just about anyone to get term coverage and protect their loved ones financially. Of course, it’s important to remember that quotes are personal. You’ll have to check in with more than one company to be sure that you’re getting your best price. But we highly recommend throwing TIAA into the mix — it’s likely to be a competitive option.

Outstanding conversion policy
TIAA’s term-to-permanent conversion policy is unparallelled. At any time during your original term, you have the option to convert to any of its permanent policies. All other providers restrict either the window during which you can convert (like New York Life) or the permanent policies that are eligible for conversion (Transamerica). TIAA policyholders can rest assured that, should they need to continue coverage, their options will never be limited — regardless of their current age or changes in health.

Easy sign-up
We’re big fans of TIAA’s Life Wizard tool, which walks you through life insurance shopping from end to end. The site helps you choose the right type of policy, determine a fitting death benefit, view sample quotes, and apply for coverage — all in one place and with just a few simple questions. Most of our other top picks offer online quotes as well, with the exception of New York Life. But we find TIAA’s to be the most comprehensive and streamlined of the lot; quote tools from State Farm and Transamerica don’t include the step of helping you choose the right policy and death benefit.

Points to consider
Fewer rider options
TIAA’s policies are a bit less customizable than those from our other top picks. It offers only eight of the 16 popular policy add-ons we looked for, compared to 11 from our other contenders. The biggest omission here is a selection of living benefits. TIAA doesn’t offer a Disability Income rider, Critical Illness rider, or Long Term Care rider, to name a few — options that can be a huge help if the insured falls ill or gets injured. If your term policy will be with you late in life (or if you think you may end up converting to permanent insurance) we suggest starting with a company that offers a wider coverage selection.

Inflexible term lengths
TIAA Term insurance comes in 10-, 15-, 20-, or 30-year packages. While these options are fairly standard for the market, they don’t leave you with a ton of wiggle room. Some customers may prefer a more tailored term: say, exactly 18 years of coverage until your child moves out of the house. For more options to customize your term length, we recommend New York Life. It lets you select terms in single year increments, up to 20 years.

State Farm: Best Customer Service
Pros
Cons
Top customer ratings
Flexible extension options
Variety of Term Life plans
Pricier coverage
Limited term lengths
Why we chose it
Top customer ratings
2017 marks State Farm’s fourth year as J.D. Power’s top-rated life insurance company. The survey, which polled more than 6,000 insurance customers in 2017, measures policyholders’ satisfaction with their provider. Policy options, customer service, price, billing, and statements are all taken into account — and State Farm earned top marks in every category. Although this company was slightly pricier than our other finalists, a couple extra dollars every month may be worth it if you put high stock in customer service. State Farm is more likely than our other finalists to make the insurance process painless from beginning to end.

Flexible extension options
While TIAA tops the charts for conversion flexibility, State Farm comes in a close second. Most term insurance customers have the option to convert to a permanent policy at any point before age 75 — without taking a second medical exam. That means that even if you’ve developed a serious illness during the initial term, you can’t be denied for a policy with a guaranteed payout. This is exceptionally lenient, especially when compared to companies like New York Life, which only let you convert within the first ten years of your term. Note that conversion varies by state, so be sure to talk to an agent about the rules where you live.

Not ready to take the leap on a permanent policy? State Farm also gives term customers the opportunity to renew their policy on an annual basis through age 95. Of course, premiums will go up if you do so — but not nearly as much as they would if you bought a new policy and took another medical exam.

Variety of Term Life plans
State Farm offers four separate term life plans, meant to fit a variety of financial goals and coverage needs. Most people will likely choose its Select Term Life Insurance: a standard, affordable policy that lasts for 10, 20, or 30 years. If your needs are a little more specialized, though, we recommend checking out State Farm’s alternative term policies.

Mortgage Term Life Insurance, for example, covers you for 15 or 30 years, with premiums that shrink over time as your mortgage does. Return of Premium Insurance is a little more expensive, but it has one big perk: All of the premiums that you’ve paid in get returned to you if you outlive the term. For those who don’t wish to complete a medical exam, State Farm also offers Instant Answer Term Insurance — a quick and easy way to get up to $50,000 of coverage.

Points to consider
Pricier coverage
A quick disclaimer: By “pricier” coverage, we’re generally only talking about a few dollars per month. That said, State Farm’s prices did tend to be slightly higher than our other contenders’ in almost every category. The difference was most obvious for our 40-year-old sample profiles, who were quoted around $12 more per month with State Farm than other providers. Our suggestion? Snag a quote from State Farm when you’re comparing options. The online process is quick and easy, and since quotes are individual, there’s always a chance State Farm could be your best bet.

Limited term lengths
State Farm’s basic term life policy, “Select Term,” is inflexible as far as term lengths go; you can only opt for 10, 20, or 30 years of coverage. That’s about as limited as options get. Other companies, like TIAA, at least offer five-year increments, allowing you to choose a policy length that better fits your needs. If you’re looking for even more customization, check out New York Life. There, you can choose any coverage period between 10 and 20 years.

Transamerica: Best Range of Policy Sizes
Pros
Cons
Flexible death benefits
Plenty of policy riders
Helpful customer resources
No short term option
Relatively tobacco intolerant
Why we chose it
Flexible death benefits
With Transamerica Term Life, you can select a death benefit anywhere from $25,000 to $2 million. That’s a wide enough range to cover most people’s needs, whether they’re small (say, funerary expenses alone) or extremely large (a single parent financing multiple college tuitions). While our other top picks carry policies on the pricey end, none offer a small, affordable option like Transamerica. Most set the bar at $100,000. State Farm — the closest competitor — only goes as low as $50,000. That makes Transamerica the best bet for customers with limited death benefit needs.

Plenty of policy riders
Shoppers looking to customize their term life policy will find a lot to love with Transamerica. This company offers 11 of the important coverage options we looked for: a selection on par with New York Life and State Farm (and a step above TIAA). Included in that list are financial protections for accidental death, disability, critical illness, and long term care, among others. If life throws you an expensive curveball, there’s likely a Transamerica life insurance rider that can help pick up the slack.

Helpful customer resources
Life insurance is complex, so we appreciate that Transamerica goes out of its way to help shoppers navigate the landscape. First off, its FAQ lives right at the bottom of the life insurance webpage — making it easy to find answers to common questions like “How does term life insurance work?” or “What does term life insurance cover?” By comparison, companies like New York Life force you to go digging to find these answers.

The other resource we loved was Transamerica’s Financial Glossary. This list covers not only life insurance, but a broad range of need-to-know financial terms. If it’s your first time around the insurance block, this source is a helpful go-to.

Points to consider
No short term option
Transamerica only sells term insurance for 15-, 20-, 25-, or 30-year periods. By comparison, all of our other top picks offer a shorter, 10-year policy. Keep in mind that the shorter your term is, the less you’ll ultimately pay for your insurance. That means that if your needs are truly limited to less than 15 years, one of our other top picks may save you a chunk of change.

Relatively tobacco intolerant
Transamerica quoted some of the highest premiums when we answered “yes” to current tobacco use — especially for older customers. Profiles 40 years and older that answered positively for smoking were charged up to $13 per month more with Transamerica than our other contenders. That’s a difference of over $100 per year. Those looking for a more tobacco-tolerant life insurance policy may have better luck elsewhere.

New York Life: Flexible Term Lengths
Pros
Cons
Tailor your term
Great coverage selection
Unique policy renewal options
No long term option
No online quote tool
Limited conversion period
Why we chose it
Tailor your term
New York Life’s Level Premium Convertible Term Insurance is truly unique in one way: It lets you choose any term length between 10 and 20 years. That means you could choose to pay for the exact time frame you need covered — say, 13 years until your mortgage is paid off — and not a day more. By comparison, our other top picks sell term insurance in increments of five or 10 years. If your needs fall somewhere in between, you’ll either have to skimp on coverage by a couple years or pay for a little more than you need. Only New York Life lets you select the precise number of years you’re comfortable paying for.

Great coverage selection
New York Life offers a full roster of policy riders, making its insurance highly customizable to your individual needs. A few standout options are the Spouse Insurance rider, which extends coverage to your partner for an additional fee (not offered by TIAA) and the Long Term Care rider, which helps cover care and medical bills should you develop a terminal illness during your policy (not offered by State Farm or TIAA).

Unique policy renewal options
If you’re looking to extend your coverage but aren’t ready to commit to an expensive whole life policy, New York Life has the answer. Its Policy Purchase Option rider guarantees approval to renew your term policy at nine different points in life: Every three years from ages 22 to 46. While this is a bit less flexible than State Farm’s policy, which allows renewal anytime before age 95, it still gives you plenty of opportunities to opt for more coverage.

Those three-year markers are likely to fall close to major mid-life events — marriage, buying a home, having a child — and will give you the chance to reevaluate your insurance needs at those times. Plus, renewal is guaranteed without a second medical exam. Prices will still go up, but that increase will be much smaller than if you had waited out the policy and gone through full underwriting later.

Points to consider
No long term option
New York Life is our only top pick that doesn’t offer a longer 25- or 30-year term. So, while its term insurance is highly customizable, it’s not the best choice for anyone looking for long-lasting coverage. If your term insurance needs surpass the 20-year limit, we recommend starting your search with one of our other top providers instead.

No online quote tool
New York Life is our only top pick that won’t give you a term life quote online. To get a price estimate, you’ll have to call the company and walk through the application process with an agent. Of course, speaking with an agent isn’t inherently a bad thing; they gather more information than an online quote tool and can offer more personalized service. But we prefer companies that let you get the ball rolling with an online quote. That way, you have leeway to compare pricing and options before getting on the phone with a sales rep.

Limited conversion period
With New York Life’s Level Premium Convertible Term Insurance, you have the right to switch to a whole life policy at any time during the first ten years. After that window, though, you may only do so if you purchase a separate Extension of Conversion Period rider. If you’re looking for a more lenient policy, try State Farm, which lets you convert through age 75, or TIAA, which allows you to convert at any point during the original term — at no extra cost to you.

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Guide to life insurance pricing
How to get the coverage you need at the lowest price point
Understand the underwriting process
Before any company issues you a life insurance policy, you’ll have to go through underwriting. During this evaluation stage, a specialist looks at your age, health, family history, occupation, etc. and determines the “risk” of insuring you (read: the likelihood that the company will have to pay out on your policy). The riskier you are, the higher your premiums.

Shop around for your best offer
So what’s the trick to finding cheap life insurance? It’s all about comparison shopping. Every company’s underwriting process is a little different, and some may be more forgiving of certain “risk factors” than others. For this reason, we always recommend comparing quotes from a handful of companies before settling on a policy.

Be aware that age and sex will always affect price
It’s always worth it to shop around for the best price on life insurance. As you do so, though, keep in mind that there are a few pricing factors you can’t change. The two biggest? Your age and sex. Regardless of health, an older customer will always pay more for life insurance than a younger one. And across all of our picks, men were quoted slightly higher prices than women.

Life insurance prices are higher for males and older customers
Chart-1-for-Cheap-Life-Insurance
But you do have control over some pricing factors
Age and sex aside, tobacco use is the single biggest factor that affects your life insurance premium. Every company’s quotes were around twice as expensive for smokers, compared to a second, non-smoking profile that was otherwise identical.

Smokers generally pay about twice as much for life insurance
Chart-2-for-Cheap-Life-Insurance
Consider springing for more coverage
A bigger policy always means bigger premiums. That said, when you opt for a larger death benefit, you’ll actually be paying less per dollar of coverage; the average cost to upgrade from $100,000 of coverage to $250,000 is only about $5 per month. Spending a little more on the front end can help ensure that your beneficiaries are better taken care of, should they need to live off your death benefit.
Finding a cheap life insurance policy that offers the right amount of coverage is a main concern of any first-time buyer, as well as those simply looking for a better rate.

Here are the two most basic keys to getting cheap life insurance:
Target a term life insurance policy.
Get quotes from multiple providers.
If you want to get the most affordable life insurance, there are also several additional things you can do to minimize costs. We have six tips to help you find cheap life insurance, which I’ll be sharing with you in this article.

It’s true there are factors you have less control over when it comes to the cost of life insurance — such as your age — but there’s a lot within your control, too.

Tips to Find Cheap Life Insurance
Beyond those two basic principles, there are other ways you can lower your rate as well. Life insurance can be tricky to understand. Many companies analyze your health differently and also calculate risk in slightly varying ways. Following these steps is key to finding the cheapest life insurance for you.

Tip #1: Get several quotes
As with most purchasing decisions, finding many options will give you an edge. Most people don’t bother obtaining multiple quotes because it’s time-consuming. However, using an online life insurance quote tool is the quickest way to get quotes from several reputable insurers at one time.

Tip #2: Avoid riders and additional insurance
If your bottom-line goal is to find the cheapest insurance possible, you’ll want to say no to any add-on insurance or policy riders. Examples of add-ons include the option to purchase child policies or more insurance at a future date without going through the medical exam process again.

You can think of riders as à-la-carte options to supe up your policy. Riders can be purchased to accelerate your death benefit and pay you out for medical expenses if you have a terminal illness but haven’t passed away yet. Term conversion is another rider that gives you the option to convert your term policy to a permanent (whole life) policy.

A caveat: Choose your coverage wisely. If you need coverage for your kids, then it’s OK to pay for the extra coverage. Also, if you’re someone who is on the fence between term and whole life coverage, the term conversion rider will give you that option down the road for a few dollars per month.

There is no one-size-fits-all method to buying life insurance, but having as few riders as possible will keep your rates low.

Tip #3: Say no to one-company local agents
Experts are available to help you through the process of purchasing life insurance, and many of the largest insurance companies have their own networks of agents. If you need the human touch, I would avoid one-company local agents because they usually represent the interests of their own company, which essentially lowers your options. If they happen to represent the cheapest and the best life insurance company, that’s another story!

A good strategy is to seek out a financial advisor, like Edward Jones, that covers several different insurers. This way, your advisor will be more impartial even though he or she has personal preferences.

Tip #4: Don’t wait
Generally speaking, the younger and healthier you are, the cheaper your insurance costs will be. If you’re in your mid-20s and are thinking about lifestyle changes like marriage and kids, it can pay off to buy a policy now rather than waiting. The biggest reason is that you never really know how your health will change at any time.

As a summer intern, I sold my future father-in-law a life insurance policy on his 19-year-old daughter. After that, she was diagnosed with a condition that would prevent her from being insured today. Not waiting made all the difference.

Tip #5: Bundle coverages if you can
One way to receive discounts on your quoted life insurance rate is to bundle coverage with your car, home, or other insurance. Large insurers like State Farm can be fairly cheap life insurance providers because they give you the most options to bundle.

A good strategy to maximize your bundled discounts is to review all of your insurance at the same time and pick the company that can give you the best deal for switching. This is more work in the short term, but can pay huge dividends and offer great savings in the long run.

Tip #6: Check the financial stability of the insurer
Cheap life insurance can be a very bad deal if the insurer isn’t financially healthy enough to pay out when the time comes. After you get a few online life insurance quotes, always check the financial reputation of the insurer so you don’t pay premiums for years only to find out the company can’t pay out any claims.

A.M. Best is an insurance rating agency and provides up-to-date information on the financial health of most life insurance companies. Use them to check on a company, especially if you haven’t heard of them or if they’ve started operations within the last 10 years.

Why Is Term Life Insurance the Cheapest?
You generally have two options for life insurance. There are various hybrids and nuances, but a life insurance policy is usually either:

Term life insurance
Whole life insurance
What is term life insurance?
Term life insurance acts much like your auto insurance, so it’s much easier to understand. Like your car insurance, you pay a premium each month for the period of time you wish to be covered, and if you don’t use the insurance (i.e., you don’t pass away) in that time period, the insurance company keeps the money and does not have to pay a death benefit. This is just like your auto policy — if you don’t get into an accident, there is no payout from the insurance company.

Term insurance is generally cheaper because the coverage is only provided for a specific period of time. In most cases, the insurance company will never pay out because you will outlive the term and the policy will expire. However, term life premiums can and do rise with age, whereas whole life premiums stay steady. Late in life, they can become cost-prohibitive.

What is whole life insurance?
Whole life insurance is a life insurance policy that remains in force for the insured’s whole life. In this case, you or your survivors are guaranteed to receive a payout from the insurance company as long as your payments are current.

Whole life insurance has an investment growth component to it where dividends are accumulated tax-deferred. Part of your premium pays for the death benefit and part of your premium is invested to produce these dividends and increase your policy’s “cash value.” Your cash value typically can be accessed during your lifetime, which is a nice living benefit.

Your premium payment is generally higher than with term life, but does not increase over time. Your premium stays the same once your policy is in force no matter what your health or age is. Additionally, because of the cash-value buildup, at some point you can usually use the growth in your policy to pay your premium. This way, you can have a policy in force for the rest of your life without making another out-of-pocket premium payment.

What impacts your life insurance rates?
Once you choose the type of insurance you want, your actual insurance cost is based on many factors, with age and health being the biggest factors. For either term or whole life, the following factors can impact how much you pay:

Overall health
Smoker/non-smoker
Family history
Age
Gender
Lifestyle (high-risk activities)
Career
Location
Life Insurance Calculator
To help determine how much life insurance you or your family members need, we’ve created this calculator that take into account your life situation.
How I Use Life Insurance
Experts argue about which is best, but there is a specific purpose for both term and whole life insurance. If you structure them properly you can create a very affordable life insurance program that is comprehensive enough to meet all of your goals.

Here’s how I approach life insurance:

I use term life to cover my fixed debts, or expenses that are likely to only exist for a fixed period of time.
I supplement long-term coverage with a whole life policy that has more growth and tax-advantaged features.
I am 34 years old, married, have two young children, and have a home with two vehicles.

I use cheap term life insurance to cover debts, and to take care of my wife, kids and family expenses.

If I died tomorrow, here is what I would want covered:

My mortgage debt, so the house will be paid off.
Vehicle ownership expenses, so my cars will be paid off.
Approximate child expenses for 18 years.
Cost of four-year college tuition for two kids.
These expenses end roughly 20 years into the future, so I try to match my coverage term to that time frame.

When I started looking into life insurance, I had recently graduated from college and didn’t have enough money to purchase a whole life policy, so I bought a term life policy.

I made sure my term could be converted to whole life insurance. I value this conversion flexibility because I like the idea of growing my money tax-deferred, and estate tax policy is in constant flux.

I plan to leave money to my children, and this gift may be taxable in the future. I can use whole life to cover any tax implications for my kids at the time of my death.

Granted, I do understand that what I’ve outlined here may not be the cheapest, but I wanted to provide some personal details that may help you.

How much should you buy, and when should you start?
A very general rule of thumb is to purchase at least 10 times your annual salary in life insurance. So, if you make $50,000 per year, you would want to look at a $500,000 life insurance policy. As you can imagine, this broad calculation might not fit your unique situation.

Find the Best Life Insurance Rates
Enter your zip code below and be sure to click at least 2-3 companies to find the very best rate.

Ex: 20004
For a more accurate approach, follow these steps:

Add up any mortgage or student loan debts you want covered.
Add up your monthly expenses for the period of time you want covered.
Add in any educational or other extraordinary expenses you want covered.
Finally, add in any other obligations you do not want to burden your survivors with (e.g., taxes or other debts).
Going through this exercise will give you a more realistic portrayal of how much coverage you need. An additional benefit to this process is that, if your quotes end up coming in much higher than your budget, you can remove items from your list and adjust your number to arrive at a more reasonable premium payment.

How to get started
Generally, when you experience major life changes, like purchasing a home, getting married, or having children, you start to accumulate many financial responsibilities that you want to protect with life insurance.

There really isn’t much of a need to buy term life insurance before these events.

However, many people choose to start whole life insurance programs at a very young age because cheap insurance is so plentiful and the policy owners can milk the cash value growth for a longer period of time.

Whatever decision you make, it can’t hurt to get started by getting a quote from several providers. You can find the most affordable life insurance (whether it’s term or whole) and then decide if it fits within your current budget.