Wondering how to get cheap life insurance? It may be easier than you think. A new study by LIMRA found that adults under age 30 overestimate the cost of life insurance by 10 to 12 times more than it actually costs.
The reality is, some healthy adults could get affordable life insurance for about what they’d spend on a streaming subscription each month. The trick lies in buying coverage while you’re young, choosing term life insurance over permanent coverage when appropriate, and comparing quotes from several insurers before making a decision.
What cheap life insurance actually means
For most people, cheap life insurance comes down to a policy you can comfortably afford. And the amount you can comfortably afford might look different from your friend, coworker, or neighbor.
Affordable life insurance also comes down to you getting a good price for the coverage you actually need. For example, a $500,000 policy will almost always cost less than a $1 million policy. But if your family would need far more than $500,000 to replace your income, pay off a mortgage, or cover future expenses, choosing the lowest premium could leave them financially vulnerable.
Read more: How much life insurance do I need?
Why term life insurance is the cheapest way to get coverage
Term life insurance is usually the simplest and cheapest way to get affordable coverage.
Term life covers you for a set number of years, such as 20 or 30. Research from Agency Height shows that the average 20-year, $500,000 term policy costs about $55 per month for a healthy adult.
Unlike permanent life insurance (also known as cash value life insurance), term life insurance expires after a set number of years, and you can’t cash it out while you’re still alive. That makes it much less expensive.
If you simply want to replace your income or help your family pay the mortgage if you die, term life could be all you need. A study from the Ohio State University estimated that 54% of households with life insurance have a term policy.
Read more: Types of life insurance: A complete guide
What affects the price of life insurance?
Underwriters tend to look at various factors to determine how much you’ll pay for insurance:
Your age
Age has one of the biggest impacts on what you’ll pay. The younger you are when you buy a policy, the lower your premium is likely to be because you’re generally considered less risky to insure.
That’s why it’s often better to buy life insurance as soon as you’re considering it. The longer you wait, generally, the more your monthly premium will increase for the same coverage.
Your health
Insurers typically ask about your medical history, medications, family health history, height, weight, and lifestyle habits. In general, people with fewer health conditions qualify for lower rates.
Whether you smoke
Smoking is one of the fastest ways to increase the cost of life insurance. If you’ve recently quit, ask insurers how long you need to be tobacco-free before qualifying for nonsmoker rates. The waiting period is 12 months for many companies.
Your coverage amount and policy length
In general, buying more coverage is more expensive than buying less coverage. And in the case of term life insurance, buying a policy for a longer period (such as 30 years instead of 20) can also increase the rate.
Agency Height found that a 20-year term policy for healthy nonsmokers can cost $216 to $384 per year for $250,000 in coverage or $576 to $1,320 per year for $1 million in coverage.
Average life insurance costs
Life insurance costs can range from less than $20 a month to several hundred dollars, depending on your age, health, coverage amount, and policy type.
Agency Height estimates that a healthy nonsmoker could pay about $18 to $32 per month for a 20-year, $250,000 term policy. Increasing coverage to $1 million could raise the average cost to roughly $48 to $110 per month.
Source: Agency Height
Whole life insurance generally costs much more because the coverage lasts your entire life and includes a cash value component. For example, Agency Height found that a healthy 30-year-old nonsmoker could pay roughly $3,292 to $3,662 per year for a $500,000 whole life policy. That works out to about $274 to $305 per month.
These numbers are only benchmarks. Your actual quote could be higher or lower depending on your age, health, smoking status, policy length, and the insurer you choose.
Read more: Term vs whole life insurance: Which should you choose?
Ways to lower your life insurance premium
If you’re shopping for affordable life insurance, these strategies can help you lower your premium.
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Buy coverage while you’re young. For many types of life insurance, your premium is locked in for the life of your policy. So the earlier you get a policy, the lower your premium will potentially be.
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Choose term life insurance. Unless you specifically need permanent coverage or cash value, term insurance is usually the lower-cost option.
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Take time to shop around. Life insurance pricing isn’t standardized. Getting quotes from several companies (or working with an independent broker who can compare multiple companies) can help you find an affordable life insurance policy.
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Buy only what coverage you need. A coverage calculator or financial professional can help you estimate an appropriate amount.
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Improve your health before applying. If possible, consider applying after you’ve quit smoking, lost weight, or brought conditions like high blood pressure under control.
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Take the medical exam if you’re healthy. If you’re generally healthy and don’t mind a medical exam, it may help you secure the cheapest life insurance policy for the coverage amount you’re looking for.
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Check if you’re eligible for group coverage. Some employers or membership organizations offer group life insurance at reduced rates. Veterans may also qualify for affordable coverage through the Department of Veterans Affairs’ VALife program.
How to get affordable life insurance if you have a health condition
If you have a health condition, your ability to secure cheap life insurance will depend on how severe the condition is, how well it’s managed, and how each insurer evaluates the risk.
For example, someone with controlled high blood pressure or diabetes may qualify for a much better rate than someone who was recently diagnosed or has frequent complications. Because underwriting standards vary by insurer, comparing several companies is especially important when you have a medical condition.
You may also be able to improve your odds by:
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Applying after your condition has been stable for a while
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Keeping up with medications, appointments, and recommended treatment
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Gathering medical records that show your condition is well-managed
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Working with an independent agent who can compare providers with you
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Taking a medical exam instead of automatically choosing a no-exam policy
If traditional coverage is too expensive or you’re denied, simplified issue or guaranteed issue life insurance may still be an option.
Read more: Your total guide to life insurance
When no-medical-exam life insurance may make sense
No-medical-exam life insurance can be a good option if you need coverage quickly or want to avoid a medical exam for personal reasons. Instead of requiring a physical, insurers typically use your health questionnaire and other records to decide whether to approve your application.
The convenience can come at a cost, though. No-exam policies often have higher premiums than fully underwritten policies because insurers have less information to assess your health.
If you’re generally healthy and don’t mind taking a medical exam, you’ll often qualify for lower rates with a traditional life insurance policy.
The cheapest life insurance companies to compare
The best way to find cheap insurance is to start by getting quotes from some of the best life insurance companies around. From there, you can look at each company’s:
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Financial strength ratings
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Customer satisfaction and complaint history
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Coverage options and riders
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Requirements for a medical exam
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Ease of getting quotes and managing your policy
Do your research and compare our list of the seven best life insurance companies this year.
Common mistakes that make life insurance more expensive
As you begin looking for the cheapest life insurance policy, be wary of these common mistakes:
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Waiting to buy: It’s OK to take your time while comparing options, but premiums will generally cost more as you get older.
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Choosing permanent coverage when term life would do: Whole and universal life insurance have their place, but don’t count out term life insurance for affordable coverage.
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Getting just one quote: You’ll never know if you’re getting cheap life insurance unless you have multiple policies to compare against each other. Always shop around, even if you’re short on time.
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Automatically choosing a no-exam policy: The convenience can come with a higher price tag.
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Buying based on price alone: The cheapest policy isn’t a bargain if it doesn’t provide enough coverage for your family’s needs.
When cheap isn’t the right priority
If a lower premium means choosing a policy that wouldn’t cover your family’s major expenses, it may not be the best value. The goal is to find coverage that’s affordable and sufficient, whether that’s replacing your income, paying off a mortgage, or helping your loved ones stay financially secure.
Cheapest life insurance FAQs
What is the cheapest type of life insurance?
Term life insurance is typically the cheapest type of life insurance. Because it provides coverage for a set period, or “term,” and doesn’t build cash value, premiums are much lower than whole or universal life insurance premiums.
How can I get cheap life insurance?
The best way to lower your premium is to buy coverage while you’re young, choose a term life policy, compare quotes from multiple insurance companies, and apply while you’re in good health, if possible.
Is cheap life insurance actually good coverage?
As long as you buy enough coverage for your needs from a reputable company, it can be good coverage. As you shop around, don’t forget to compare each insurer’s financial strength ratings since you’ll likely have the policy for decades to come. You’ll want to make sure the company will be around to deliver on its promise should your beneficiaries need to use the death benefit.
Can I get cheap life insurance without a medical exam?
No-medical-exam life insurance can be a good option if you need coverage quickly or prefer to skip the exam, but healthy applicants often qualify for lower premiums by completing the medical underwriting process.
