Finding the Cheapest Life Insurance

October 31, 2019
Jonathan Fritz
B.A. Risk Management
Life Insurance Agent
Term life insurance is the cheapest form of life insurance. Unlike whole life insurance, term life offers coverage for a set amount of time. Whole life insurance offers permanent, or lifelong, coverage, which is why it is more expensive.

Finding an affordable life insurance policy that meets the financial needs of an individual can be hard. Not only are there various options to choose from, but even these options have options. For consumers to obtain the best policy at the best price, they must consider many factors before zeroing in on the cheapest policy that meets their needs best.

To make the job easier, has prepared this guide to help those shopping for a low-cost term life insurance policy that best suits the budget and needs of the life insurance buyer.

#1 Tip for Getting the Cheapest Life Insurance

The best thing potential policy holders can do to get a good price for life insurance is to shop and compare policy options and price quotes attached to the options. It is a mistake to go with the first price offered. The experts at recommend shoppers collect numerous quotes and then apply for a policy through a few companies that meet the needs and limits of their budget.

Furthermore, policies requiring medical exams are in cheaper than no exam policies. The tool below offers prices for comparison.

Compare Quotes to Find the Cheapest Life Insurance

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The Average Cost of Life Insurance in the United States

For most life insurance shoppers, cost is usually the defining factor that dictates the final product or services purchased. But the average consumer has several misconceptions when it comes to the cost of a typical life insurance policy.

The problem, however, is that the average person has several misconceptions about life insurance, one of which is regarding the cost of a typical life insurance policy.

According to a study by LIMRA, many people in the US never purchase life insurance because they believe it is too expensive. However, the average person also significantly overestimates this type of coverage.

The truth is, the average cost of life insurance in the US is lower than many people think.

For instance, a healthy 30-year-old male can get a 30-year term policy with a face value of $250,000 for $240 a year. A healthy 30-year-old female can get the same policy for just $206 a year.

It should be noted this is the average cost of a term life policy calculated based on the premiums charged by insurance providers for people in the low-risk category. The actual cost of an individual’s policy could be higher, especially for different age groups and considering the health or medical condition of the applicant.

Below are the key factors determining the cost of a life insurance policy.

Factors that Determine the Cost of Life Insurance


This is the number one factor impacting the cost of a life insurance policy. In the example mentioned above, the $250,000-policy for a 30-year-old costs $240 a year, but the same policy will cost a 40-year-old $384 a year. A 50-year-old will pay $913 a year for the same policy.

The bottom line is the risk of mortality increases with age. Thus, the older the buyer is at the time of purchase, the more expensive the policy will be.

Our research shows once an individual reaches the age of 40, life insurance costs could increase by 10 to 15 percent ever year.

This is why experts say that you should get insured when you are young.


Men generally pay more for insurance to women. Statistically, the average woman has a higher life expectancy and a lower risk of mortality compared to the average man(Source). Insurance companies take these factors into account while determining the cost of a policy. Thus, an insurance policy for a female is likely to cost 15 to 40 percent less than the same policy for a male close in age.

Term Length

The length of the term is also a determining factor in the cost of a life insurance policy. The longer the term, the more the policy will cost. Thus, a 30-year policy will cost more than a 10-year policy, other factors aside, but it extends coverage, which may be worth it.

Thanks to the advancements in medical science, the average life expectancy in the US has increased considerably over the years. So, even for those in their 40s or 50s, it makes sense, in most cases, to opt for a policy with a longer-term length that will continue through to post-retirement.

Coverage Amount

The amount of coverage a policy offers will affect the price of the premiums. The higher the face value of a policy, the higher the premiums will be. Using the same example from above, a $250,000-policy for a 30-year-old male averages around $240 a year, but a $500,000-policy for the same guy costs about $400 per year. Whereas a $500,000 policy for a 30-year-old female jumps to $335 annually (from about $200 per year for a policy with $250,000 in coverage).

Health Condition

Apart from age, this is the most important factor insurance companies consider when issuing a policy. Underwriters tend to review the past medical history of applicants as well as their current health status to determine insurability.

Insurance companies generally determine mortality risk based on weight, blood pressure, blood sugar levels, and cholesterol levels.

Applicants who are overweight and/or have a disease or medical condition such as diabetes, hypertension, or heart disease, are likely to pay more for insurance compared to people without pre-existing conditions. Even a family history of any of these health issues can increase premium costs.

In order to get the cheapest rates, applicants must take a medical exam during the application process, so the provider can verify the applicant’s health status.

Tobacco Use

Smokers have a higher risk of mortality and lower life expectancy compared to non-smokers. Thus, smokers can expect to pay significantly more than non-smokers for the same kind of policy.

For example, a non-smoker is likely to pay around $11 a month for a 10-year term policy with a face value of $250,000. A smoker, on the other hand, will pay as much as $30 for the same policy.

Non-smokers who have a history of smoking but have quit the habit are likely to pay less than a smoker, but possibly more than a non-smoker who has never smoked for the same policy.


An applicant with a “high-risk” profession is likely to pay more for life insurance. For instance, insurance companies consider professions high-risk occupations like trucking, farming, roofing, power line installation and maintenance, mineral and natural resource extraction, logging, commercial fishing, and construction. All these jobs have a higher fatality rate and overall rate of accidents compared to other jobs.


An individual’s hobbies can also have a major impact on insurance costs. Applicants who have hobbies that are considered dangerous such as skydiving, base jumping, snorkeling, skiing, snowboarding, mountain biking, and trekking are likely to pay more for insurance, even if they are in excellent health.

Based on the aforementioned factors, insurance companies classify applicants as “low-risk,” “high-risk,” or somewhere in between, depending on the provider’s criteria for which they determine insurance rates.

Top Five Most Affordable Life Insurance Companies

Let us now take a look at the best companies that offer life insurance at very competitive prices.

protective life insurance logo

Protective Life Insurance Company

Alabama-based Protective Life Insurance Company has been in business for over 100 years. It has an A+ rating from A.M. Best, AA- rating from Standard & Poor’s, A+ rating from Fitch, and an A1 ranking from Moody’s.

mutual of omaha logo

Mutual of Omaha

Founded in 1909, Mutual of Omaha offers a wide range of insurance products for individuals as well as businesses. It has an A+ rating from A.M. Best, A+ rating from Standard & Poor’s, and an A1 ranking from Moody’s.

north american life insurance logoNorth American

North American Company for Life and Health Insurance was founded in 1886. It is one of the most recognizable names in the industry today and a leading provider of insurance products and annuities in the country. It has an A+ rating from A.M. Best, A+ rating from Standard & Poor’s, and an A+ rating from Fitch.

principal life insurance logo


Principal Life Insurance Company was established in 1879 and is based in Iowa. It has an A+ rating from A.M. Best, A+ rating from Standard & Poor’s, AA- rating from Fitch, and an A1 rating from Moody’s.

Banner Life Insurance Review


Maryland-based Banner Life Insurance Company was founded in 1949 and has managed to become a leading insurance provider in the country in a relatively short term. It has an A+ rating from A.M. Best, AA- rating from Fitch, and an AA- rating from Standard & Poor’s.

Here we will break down the average cost of life insurance policies offered by these companies. The rates given below approximate what a 40-year-old female in good health can expect to pay per month for a life insurance policy premium from these companies.

Insurance Company$250,000$500,000
Mutual of Omaha$11.99$17.24
North American$12.10$18.92
Banner Life$12.86$20.55

All five of the companies listed above are financially stable, have been in business for a long time, are rated highly by agencies and customers alike, and are known for their affordably priced products. For individuals looking for a low-cost insurance provider, any one of these companies might be a good choice.

At the same time, applicants should remember insurance policies are highly individualized, and the rates might differ from one person to another, depending on the factors mentioned above.

In the next section are 10 tips that can help shoppers find affordably priced insurance policies.

10 Tips to Get Affordable Life Insurance

  1. Make a list of five or 10 top-rated insurance companies, contact all of them, and get quotes for life insurance. Compare the offers to determine the best for your situation. Remember, the best policy is not necessarily the cheapest one. Rather than selecting the best price, weigh the benefits and policy options that suit your needs as well.
  2. The younger the applicant is, the more affordable life insurance will be. It is preferable to purchase a policy in your 20s. It is the best way to get the cheapest rates possible. Moreover, the longer you wait, the higher the chance of developing a health problem are, which could affect insurability and cause policy costs to go up.
  3. Take the annual premium payment option if possible. It is easier to pay once and forget it for the rest of the year. Moreover, some insurance companies offer discounts on annual premium payments.
  4. Avoid unnecessary riders and additional benefits. Choose a rider only if it adds more value to the policy and if you are certain the increase in cost is worth the extra protection and benefits it offers.
  5. Stop smoking. It is one of the most significant ways to reduce life insurance costs.
  6. Try and lose some weight by eating healthy and exercising regularly. Insurance rates could increase for applicants who are overweight, even if they do not have any health problems.
  7. Do not drink and drive, and do not do drugs, as it puts you in the “high-risk” category, which can cause insurance rates to go up.
  8. Stay out of trouble and keep a clean record. Having a criminal record not only affects social status and employment opportunities, but also makes it harder to get insured.
  9. Do not travel to countries with extremely high crime rates, disease outbreaks, or economic strife or sectarian violence. Traveling to such places is considered risky behavior by insurance providers, and this results in a spick in rates.
  10. Avoid extreme sports and high-risk hobbies. You can get the same adrenaline rush by taking jiu jitsu classes on the weekends or playing basketball a few miles away at a nice indoor/outdoor court. This will keep insurance costs down.

10 Mistakes to Avoid While Buying Life Insurance

  1. Do not take advice from captive agents who represent only one company. Since they have only one product to sell, they will try to convince consumers their company is the best option, even if it does not meet their needs.
  2. Look for independent agents who can provide quotes from multiple companies. Or better yet, contact to choose the right policy.
  3. Do not make the mistake of underestimating life insurance needs. Do not pick a number out of thin air when choosing a coverage amount. $250,000 might sound like a lot of money now, but will it be enough to cover your loved ones needs if you pass away 20 years from now? How much life insurance to buy is dependent on your financial situation.
  4. Calculate the amount of death benefit needed based on age, health condition, income level, the number of productive years you have left, the size of your family, and debts.
  5. Do not get fixated on the cost factor alone. As mentioned above, the cheapest policy is not necessarily the best option.
  6. There is no harm in paying a few dollars more per month, if it means getting additional protection for you and your family members. Look for affordable insurance, but do not sacrifice coverage or open the door for an unreliable insurance provider just because the costs are low.
  7. Do not depend on group insurance provided by your employer. First, it might not be enough to cover financial needs. Second of all, it usually ends when you resign from your position or get terminated.
  8. Sure, a new employer might also offer group insurance, but what happens if it takes you a few months to find another job? It is not a prudent idea to remain uninsured, even if it is only for a few months. So, select a personal life insurance policy to make sure coverage is not dependent on employment status.
  9. You are not too young or too old to get life insurance. Whether 20 years old and have a job or 60 years old and retired, life insurance is available.
  10. The average life expectancy in the US is 79 years, and a healthy individual with no serious medical problems can expect to live even longer. Getting life insurance to cover the needs of your family and pay for final expenses, outstanding bills, and small debts provides peace of mind in knowing your family is protected.

Choose Low-Cost Life Insurance

Insurance is necessary regardless of age and health condition. Even older individuals who may have pre-existing conditions can still get insured, as there are companies that offer no-exam, no-questions-asked policies that issue coverage for non-ideal applicants.

What Offers You offers a wide range of information on low-cost life insurance, including background information on cost-competitive life insurance providers, the policies they offer, factors to consider while choosing an affordable policy, factors that determine the price tag of a policy, and much more.

If you need life insurance, we can help find a policy that suits your needs and your budget.

If you are in need of life insurance, we can help you find a policy that suits your needs and your budget.