Cheapest Life Insurance Companies of 2022 – Best Recommended.
Top Best Cheap Life Insurance Companies: Purchasing life insurance is a smart way to provide for your loved ones financially in the event of your death. Having a good policy in place ensures that you’re doing so in a cost-effective way and the insurer will have enough funds to pay the agreed-upon death benefit.
It’s possible to choose the lowest premiums for your individual circumstances by shopping around for coverage. Take a look at our list of the cheapest life insurance companies to help you find the best fit for your budget.
List of Cheapest Life Insurance Companies of 2022
1. Banner Life
2. AIG
3. Guardian Life
4. State Farm
5. Transamerica
Monthly costs are for a 35-year-old female and 35-year-old male, respectively, in the Standard Plus risk category, or equivalent, for a $1,000,000 coverage policy of a 20-year term.
Cheapest Life Insurance Companies in Detail
Banner Life
Pros
- Online quotes available
- Term life policies between 10 and 40 years
Cons
- Limited riders or optional coverage for term policies
Banner Life
With lower monthly premium prices than the other companies in our rating, Banner Life is the No. 1 Cheapest Life Insurance Company of 2022. Banner Life offers term life and universal life insurance policies. The company also allows customers to receive a quote online.
Banner’s term life policies offer terms between 10 and 40 years, which are some of the widest ranges of terms in our ratings. Despite there being a limited number of riders available, applicants can still choose from several including a Children’s Life Insurance Rider and the Accelerated Death Benefit Rider.
Banner Life’s universal insurance policy offers lifetime coverage for those between the ages of 20 and 80, with coverage amounts starting at $50,000. However, the universal life policy is more limited than the term life policy because there is only one rider: the Accelerated Death Benefit Rider.
AIG
Pros
- Offers term, whole, and universal policies
- Online estimates available
Cons
- Riders not available for all policies
AIG
With sample prices very similar to Banner Life, AIG is the No. 2 Cheapest Life Insurance Company of 2022. AIG has a wide variety of policies including term life, universal life, andwhole life. There are also other policies that don’t require a medical exam.
Coverage amounts range from $5,000 to $10 million, depending on the policy you select. Even though you can request an estimate online, you will still need to talk with an agent before completing the process.
With AIG’s term life insurance, terms range from 10 to 30 years and increase in five-year increments. You also have the option to convert your term life policy into a permanent life policy without taking a medical exam.
There are three permanent life insurance options to choose from: whole life, universal life, and guaranteed issue whole life.
Guardian Life
Pros
- Offers term, whole, and universal life policies
- Offers annual dividends on whole life policies
Cons
- Online estimates only available with term life policies
- Policies must be purchased through an agent
Guardian Life
Guardian Life offers different types of policies including term, universal, whole, and variable universal life insurance. For all policy types, you’ll need to work with an agent. The company has an A++ rating from AM Best.
The insurer’s permanent life policies offer either flexible or guaranteed level premiums, and different ways to customize coverage with riders. For instance, their universal life policies offer riders such as a long term care, charitable benefit, waiver of monthly deductions, and enhanced accelerated benefit rider. Whole life policies start at $25,000, whereas term, universal, and variable start at $100,000. Guardian Life offers dividends on its whole life policies.
State Farm
Pros
- Multi-line discounts available
- Joint policy options available
Cons
- Must contact an agent in order to apply
- Not available in Massachusetts
State Farm
State Farm has an A++ rating from AM Best. The insurer offers term, universal, whole life, and final-expense policies. Depending on the type of policy, you can also opt for joint coverage where the death benefit is paid out depending on the insured who passes away.
Another perk with State Farm is that it offers opportunities to receive discounted premiums, one of them being a multi-line policy discount. That means if you purchase more than one policy with State Farm, you can pay less. A potential downside is that if you’re someone who prefers to receive quotes and apply online, State Farm may not be a good fit as you’ll need to work with an agent. However, depending on the type of policy, you may be able to purchase a policy within the same day.
Transamerica
Pros
- Coverage amounts to $10 million
- Several riders available for universal life policies
Cons
- Need to go through an agent for most policies
- Limited riders for term life policies
Transamerica
Transamerica offers term, whole and universal life policies and has an A rating from AM Best. The insurer offers two types of term life policies: Trendsetter Super Series and Trendsetter LB. The first type offers coverage up to $10 million and the ability to convert to a permanent life policy with no additional fees or medical exams. The latter offers lower coverage amounts and comes with living benefits. You will need to speak with a Transamerica agent in order to purchase any life insurance policy.
If you want to customize a Transamerica policy, the TransAmerica Financial Foundation IUL is your best option. Applicants can choose from coverage such as overloan protection, additional insured, accelerated death benefit, concierge planning, and terminal illness accelerated death benefit riders.
For those interested in final-expense insurance, TransAmerica offers flexible coverage amounts, no medical exam requirement, and the opportunity for immediate coverage.
How Much Is Life Insurance?
Life insurance policies vary in price because of factors that affect your risk level in the eyes of insurers. The riskier your profile, the more likely you are to pay a higher premium. In other words, the more likely it is that the insurer will need to pay out claims, the more they’ll charge.
Below are some factors that determine how much you will pay for life insurance:
- Coverage amount: The higher your death benefit, the higher your rates
- Policy type: Term life insurance is generally cheaper than permanent life insurance policies because you’re not building cash value.
- Term length: If you purchase a term life insurance policy, you will pay more for longer terms.
- Gender: Men tend to have higher life insurance costs compared to women because they don’t live as long.
- Health or medical history: Smokers tend to pay higher premiums compared to nonsmokers, as well as those who have a higher risk of pre-existing and future medical conditions. Other health factors may also be taken into consideration, such as your current health, weight, and cholesterol levels.
- Age: The older you are, the more likely it is you will be charged higher premiums.
- Lifestyle factors: If you generally live a risker lifestyle (if you have hobbies that involve potentially dangerous activities) or have a high-risk job, you might pay more.
How Much Life Insurance Do I Need?
Understanding exactly how much life insurance you need will ensure your loved ones are taken care of when you’re not around. There is the possibility though, that you could purchase too much life insurance, leading you to pay more in premiums that won’t do much financial good.
Determining how much you need will depend on your individual circumstances, including the following:
- You and your family’s current and potential income, assets, and liabilities
- The number of dependents you have, plus their future financial needs
- The loss in income your loved ones will face without your contributions
- Out-of-pocket costs relating to end-of-life expenses, such as funeral costs, estate taxes, and outstanding debt
The Insurance Information Institute (III) suggests also looking at less obvious sources of income outside of your salary, such as the value of employee benefits like health insurance subsidies and employer 401(k) matches. Once you’re gone, your loved ones will need to make up for these losses if they want to maintain the same standard of living.
Calculating the coverage amount you’ll need is an important first step before purchasing a policy. Once you have this amount, you can then look at policies that match your needs, including how much you can afford to spend on premiums.
Group and Free Life Insurance
Pros
- Employer subsidizes policies
- Paperwork may be easier than purchasing an individual policy
- Typically has guaranteed acceptance regardless of age or health status
Cons
- Coverage amount tends to be low
- Limited customization options
Some employers and member-based organizations offer group life insurance as one of their benefits. This type of life insurance is an agreement between the employer or group and its employees or members, stating that it’ll provide life insurance policies
A main benefit of group life insurance policies is that they’re paid for by the employer and guarantee coverage. However, if you want to customize your coverage, you may have to pay out of pocket. Plus, your coverage amount may be limited to a certain amount of your salary.
If you want additional coverage, you may need to purchase another policy to ensure you have enough to provide for your loved ones if you die. According to LIMRA, a financial industries association, the median coverage for life insurance provided through the workplace is either a $20,000 flat sum or one year’s salary.
Another disadvantage is that group policies are usually tied to your job. If you leave, you won’t be able to take it with you. There are some insurance companies that allow you to convert a group policy to an individual one, but you’ll need to pay your own premiums.
Considering group life policies are usually provided at no cost to you, it may be a smart idea to take advantage of this benefit. That being said, you may need to purchase an additional or supplemental policy to ensure you’ll have coverage if you leave your job or want to increase your overall death benefit.
Cheapest Life Insurance for Women
The chart below shows a sampling of monthly rates for life insurance policies for females. In general, the younger and healthier you are, the lower you’ll pay in premiums. Plus, whole life and universal life insurance policies usually cost more than term life policies.
Cheapest Life Insurance for Men
Life insurance generally costs more for males than females because of life expectancy statistics from sources such as the Centers for Disease Control and Prevention (CDC). Still, you can purchase a policy with the cheapest rates by shopping around with different insurance carriers and comparing different policies.
Cheapest Life Insurance for Seniors
Purchasing life insurance later in life may be a smart choice if you don’t want to burden your loved ones with any outstanding debt or funeral expenses. Yes, life insurance may be more expensive the older you get, but there are ways to save on premiums.
Here are some options to look at if you’re a female and want to find the lowest cost for your policy.
Life insurance for men who are older may be more expensive depending on factors such as health conditions and death benefit amount. To help you save as much as possible, it’s a smart idea to shop around with different insurance carriers.
Take a look at the table below to see our picks for the top five cheapest life insurance policies for males.
Cheapest Life Insurance for Smokers
Life insurance for smokers may cost more compared to nonsmokers. Premiums also depend on other factors such as your gender, age, health condition, and how often you smoke.
Take a look at the table below to see a range of premiums you might pay if you’re a female.
While life insurance policies for men are generally more expensive, the same factors for females will also affect how much you pay. You can see a sampling of life insurance rates for male smokers in the table below. Note the difference between preferred versus standard smoker rates. The healthier you are, the more likely you are to pay less for your policy.
Cheapest Life Insurance for Children
Life insurance for children is a type of whole life policy, giving parents, legal guardians, and grandparents the opportunity to provide death benefit coverage and build cash value. Depending on the policy, policyholders can help the insured child lock in premiums, guarantee coverage as an adult, and invest for the future.
There are also children’s insurance riders you can add to your existing coverage. Premiums depend on several factors including the child’s age, state of residence, and coverage amount. You can add children’s insurance riders to different types of policies including term, whole, universal, and variable insurance.
How to Lower Your Life Insurance Premiums
There are several ways to lower your life insurance premiums:
- Consider term life insurance. This type of policy is generally less expensive compared to permanent life insurance because your premiums don’t go towards building cash value. If you want to invest, however, you’ll need to look at other alternatives such as putting money in your employer-sponsored retirement plan or a brokerage account.
- Lower your death benefit. Decreasing the amount of coverage might increase your chances of getting a lower premium. Whatever amount you choose, you’ll want to make sure that you’ll still be able to provide enough for your beneficiaries.
- Bundle policies. Many insurance companies offer discounts if you have a multi-line policy. For instance, if you purchase an auto and life insurance policy from the same insurer, your premium may go down.
- Select the most cost-effective payment schedule. Some insurers offer a discount if you pay upfront, whether that’s annually, quarterly, or semi-annually. If you’re concerned that you may not be able to make a larger upfront payment, then monthly premiums may be your best bet, even if you may not save on premiums.
- Opt out of extras. Some policies have life insurance riders or other add-ons to customize coverage. Even though they may offer more protection, the additional cost may not be worth it. Take your time to research which riders you may want and determine whether you really need the additional coverage.
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