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Nationwide is Reviews.com’s best cheap life insurance company, earning a 5 out of 5 score.
Term life insurance is generally cheaper than whole and universal.
Young, healthy customers pay lower premiums than older people.
Life insurance is a good investment to financially cover your loved ones in the event of your passing, but it’s not always easy to find the cheapest life insurance policies with the best coverage. That’s why we’ve reviewed affordable life insurance companies so people can find cheap life insurance coverage that doesn’t break the bank. In addition to premium costs, we evaluated the financial strength of the companies, their customer service ratings, and the variety of insurance options offered.
State Farm: Best Cheap Life Insurance for Customer Satisfaction
Nationwide: Best Cheap Life Insurance for Variety of Insurance Options
Compare The Best Cheap Life Insurance Companies of 2021
Reviews.com Score Score is based on company’s customer experience, financial stability, and coverage options.
AM Best AM Best rates insurance providers creditworthiness. Ratings are based on the provider’s ability to follow through with a payout when a consumer files a claim.
S&P Global financial strength rating Standard & Poor’s (S&P) rates creditworthiness for businesses, countries and cities that issue bonds.
Moody’s financial strength rating Moody’s is an American financial services company that offers in-depth opinions on credit risks. Its ratings are based on a borrower’s ability to make interest payments.
J.D. Power Customer Satisfaction* J.D. Power scores are based on surveys for customer satisfaction and product quality.
The cost of life insurance can vary substantially depending on many factors. First, there are several different types of life insurance. You can expect to pay more for a whole life or universal life policy than you would for a term life policy.
Your insurance rates will also depend on your personal characteristics. Young, healthy individuals will pay significantly lower rates. Locking in your rate when you’re younger can help you to save money for many years. Your premiums will also increase based on the amount of insurance coverage you have.
How Much is Life Insurance?
As we mentioned, life insurance premiums vary depending on someone’s age, health, and type of coverage. A young adult in good health could pay just $15 for term life insurance. But a 45-year old buying the same policy could pay closer to $55. The good news is you can lock in rates, meaning you can buy a policy when you’re younger and pay the same rate the entire term (often up to 30 years).
Whole and universal life insurance policies have higher rates because part of your premium goes toward the cash value component of the policy. While it’s not uncommon for a young person to pay $25 or less for term life insurance, the same person might pay hundreds of dollars for a whole life insurance policy.
Term life insurance is a temporary form of insurance that lasts for a specific period of time, rather than serving as an open-ended policy like cheap whole life insurance. At the end of the policy, there is usually the option to purchase a new policy or convert the existing policy into a permanent insurance policy. Should the policyholder die before the end of the policy, life insurance company will provide a death benefit to whomever is designated as the beneficiary. This payment often carries the choice of payment via a lump sum, monthly payment, or annuity, although a lump sum is often the most popular option.
Unlike whole life insurance, term insurance does not typically carry the fees and exclusions of other policies. Because it is not dependent on the market, it carries much lower risk. It makes for a much more stress-free option for people who do not want to be dependent on market conditions.
Cheap whole life insurance is a form of permanent life insurance. It does not expire as long as premiums are paid to keep the policy active and there is an attached death benefit. Whole insurance also builds cash value, based on interest that grows at a specific rate. As the policy accumulates cash value, policyholders can either withdraw or take a loan from the profits.
Whole life insurance is a great option for people that may be building an estate plan or planning for their children’s long-term needs. Just beware of fees, fines, and other penalties that may cut into profits when taking a withdrawal. Whole life insurance is typically more expensive than term insurance because of the lifetime coverage, so it’s always critical to shop cheap whole life insurance companies for policies.
Universal life insurance lasts the duration of a person’s life as a type of permanent life insurance. As long as coverage requirements are maintained, like paying premiums, the policy will remain in effect. Universal life insurance also builds cash value over time, plus interest, by using money market rates. It is available to withdraw or use for a loan if needed. Some policies carry net surrender value.
Another key difference between whole and universal life insurance is that whole life has a fixed premium and death benefit, universal life insurance offers more flexible options. Universal life is typically recommended for people looking for permanent, long-term coverage that provides beneficiaries with a death benefit after death. It is a great way to build tax-deferred savings that is available when needed.
Common Cheap Life Insurance Riders
Life insurance riders are add-on protections that allow people to better customize cheap life insurance plans to their needs. Riders can come at an additional cost but are generally pretty easy to add to a policy.
Accidental death rider: This rider will pay out an additional death benefit if you die from an accident while the rider is active.
Child term rider: With the child term rider, clients can provide life insurance coverage for a dependent child. If the child dies before the policy is up, a death benefit is paid to the policyholder or beneficiary.
Chronic illness insurance rider: The chronic illness insurance rider provides an accelerated benefit when someone is no longer able to complete two of the six Activities for Daily Living (ADL).
Family income benefit rider: If the policyholder dies, this rider can provide added support to your family that is left behind through steady monthly income for however long the rider allows.
Guaranteed insurability rider: Some life insurance policies may require a medical exam before you purchase coverage, but a guaranteed insurability rider means that someone will be able to purchase cheap life insurance without a medical exam.
Long-term care rider: Should you require nursing care, a long-term care rider can provide monthly payments to help with your care or stay in a nursing home.
Waiver of premium rider: If you experience a permanent disability, this rider waives future premiums until the policyholder is able to return to work.
The cheapest life insurance company depends on personal rate factors, like your state, age, gender, health, and the coverage you choose. These life insurance companies are an excellent place to begin your search for affordable life insurance coverage.
To find the cheapest life insurance for you, be sure to shop your options for the right coverage at the best price. A medical exam can help you qualify for more affordable coverage from several providers, too.
We evaluated the cheapest life insurance companies based on riders, coverage, resources, financial strength, and customer satisfaction to determine Reviews.com scores and create our best life insurance reviews. To compare life insurance companies with other providers across the board, we calculate each Reviews.com score based on the following:
Number of riders: The more riders a life insurance company has, the higher it scores in our Reviews.com methodology.
Financial Stability: Reviews.com utilized AM Best ratings to assign a score based on each life insurance company’s financial stability.
Coverage: Life insurance companies scored higher if customers can convert term to whole and if they offered multiple options under different types of life insurance policies.
Resources: Reviews.com compared website functionality for life insurance companies based on ability to receive online quotes, submit online claims, and read information on different policies available.