Life insurance is a good investment, but it might be difficult to fit into your budget. We’ve reviewed the best cheap life insurance companies so that you can find 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.
The 5 Best Cheap Life Insurance Companies in 2020
- Principal Financial: Best Affordable Premiums
- Guardian Life: Best Online Tools
- Mutual of Omaha: Best for Families
- State Farm: Best Customer Service
- Nationwide: Best Range of Insurance Options
|Principal Financial||Guardian Life||Mutual of Omaha||State Farm||Nationwide|
|Our review||Our review||Our review||Our review||Our review|
|Best for||Best Affordable Premiums||Best Online Tools||Best for Families||Best Customer Service||Best Range of Insurance Options|
|AM Best financial strength rating||A||A-||A+||A++||A+|
|S&P Global financial strength rating||A-||AA+||A+||AA||A+|
|Moody’s financial strength rating||(P)Ba1||Aa2||A1||Aa1||A1|
|J.D. Power 2019 U.S. Life Insurance Study score||4/5||4/5||4/5||5/5||4/5|
*Data as of 05/19/2020.
Principal Financial offers the most affordable life insurance of the companies we looked at. For a 35-year-old female living in New York with average health, $500,000 in coverage for a 20-year term is available for a monthly premium of just $18, according to the company’s quote tool.
Learn more about this insurance provider in our full review of Principal Financial.
✓ Best For: Low premiums ✗ Not For: Financial strength ratings
- AM Best: A
- J.D. Power: 4/5
- Standard & Poor’s: A-
- Moody’s: (P)Ba1
- BBB Rating: A+
Guardian Life offers a great array of online tools including calculators and quote tools. In addition, clients can access forms and applications on the company’s website. Using the same profile of a 35-year-old woman, Guardian Life’s term life premiums are around $32 per month.
To learn more about this company, check out our Guardian Life review.
✓ Best For: Online tools ✗ Not For: Lacks a wide range of life insurance coverage options
Mutual of Omaha
Mutual of Omaha offers a variety of options for families such as life insurance for children and grandchildren, policies for specific illnesses, accidental death insurance, long-term care, and more. In addition, the company offers competitive rates for the same profile of a 35-year woman (although living in Pennsylvania to access the online quote tool). Premiums for this profile are about $22 per month.
For an in-depth look at this insurance provider, take a look at our Mutual of Omaha review.
✓ Best For: Family insurance ✗ Not For: Bundling all insurance services in one company
Coming in second place in the J.D. Power life Insurance study for customer satisfaction, State Farm offers great customer service for its clients. In addition, the company has a below-average complaint index. The company’s premium for the profile of the 35-year-old woman is $40 per month, putting it on the higher end of the range of premium costs for the companies reviewed in this article.
Find out more about State Farm in our full review of this life insurance provider.
✓ Best For: Excellence in customer service ✗ Not For: Those who are looking for the number 1 cheapest insurance company
Nationwide offers a wide range of life insurance including whole, term, universal, and variable life insurance as well as other insurance options such as auto, homeowners, business insurance, and more. For those who want to get all of their insurance needs met by one provider, this is a good option. Nationwide, while competitive in the greater market, doesn’t offer the most affordable premiums when compared to the other companies reviewed here. According to its quote tool, for the profile of a 35-year-old woman, Nationwide offers rates of $49.84 per month. Premiums may be lower if you bundle services.
Learn more about this company in our Nationwide review.
✓ Best For: Wide range of insurance offerings ✗ Not For: Lowest premiums among the cheapest competitors
We selected the best life insurance companies by first looking at each provider by market share to determine availability.
The top providers were then evaluated based on factors including the providers’ financial strength as indicated by organizations such as AM Best and Standard & Poor’s, customer service ratings and support, as well as average premiums.
Guide to Cheap Life Insurance
Insurance underwriters evaluate information about your health, lifestyle, and insurance needs to decide whether or not the insurance company should approve your application for insurance. These professionals also create the terms of your policy and determine your premium.
Take the medical exam
The state of your health can affect your premium, as the healthier you are, the less likely you are to make a claim. So many insurance companies require labs or medical exams as well as information about your medical history before approving your application or determining your premium.
Consider term life insurance
Term life insurance is the most affordable kind of life insurance, giving you the most coverage for the lowest premium. It’s often affordable because it’s only valid during a certain period of time and your premium is fixed during that period.
Shop around for your best offer
Compare premiums from various companies to get a sense of what the premiums are. Don’t forget to check the details of the coverage before making your final decision.
Life insurance might not be as expensive as you think. According to the Insurance Barometer Study by LIMRA, up to 44% of Millennials overestimated the cost of term insurance by five times the actual cost. However, life insurance costs vary greatly depending on the type of policy you need, your age, the state of your health, where you live, and other factors.
Some of the best cheap life insurance providers such as Principal Financial and Mutual of Omaha offer life insurance without a medical exam. However, not all potential clients qualify for this option and there may be limits on coverage as well. If you’re in good health, it’s often in your interest to go ahead and get the medical exam, as your premium might be lower.
The best cheap life insurance companies offer great services for seniors. Of the companies reviewed in this article, Principal Financial offers the lowest premiums. However, it’s worth checking out some of the other best life insurance companies for seniors that cater specifically to their needs.