Best cheap life insurance companies
|J.D. Power Overall Customer Satisfaction Rating||AM Best Rating|
|Northwestern Mutual||807/1,000 points||A++ (Superior)|
|State Farm||822/1,000 points||A++ (Superior)|
|Mutual of Omaha||795/1,000 points||A+ (Superior)|
|Liberty Mutual||Not rated||A (Excellent)|
Northwestern Mutual ranked third in the J.D. Power 2021 U.S. Individual Life Insurance Study. The company offers a variety of different life insurance options, including term life, universal life and whole life policies, as well as annuities and long-term care insurance. The provider advertises a less than $1-per-day term life insurance, stating that a healthy, 35-year-old man can purchase a $500,000 term life policy for a starting premium as low as $306 per year (increases annually).
Northwestern Mutual only offers medical exam life insurance, so if you’re looking for guaranteed acceptance insurance, this provider may not be right for you. The company does offer conversion riders, which give you the option to convert a term life insurance policy to whole life coverage without another exam, and have a locked-in premium for the remainder of your life. While you can’t get a quote online through Northwestern Mutual, you can calculate how much coverage you need with its life insurance calculator.
Learn more: Northwestern Mutual Insurance review
State Farm won a 2022 Bankrate Award for best term life insurer, thanks to its exceptional J.D. Power customer satisfaction score, availability in most states and A++ (Superior) AM Best score for financial strength. The company sells standard life insurance policies, including term life, universal life and whole life insurance. State Farm’s term life policies go the extra mile by providing coverage up to age 95, while most competitors terminate coverage after you turn 80.
State Farm’s unique Instant Answer term policy provides $50,000 in term life coverage up to age 50, or a maximum of 10 years. If you qualify for an Instant Answer policy, you won’t have to take a medical exam. State Farm also offers a multi-policy discount on auto insurance if you purchase life, which could help you save money. In terms of customer reviews, State Farm has fewer than average complaints about individual life insurance as rated by the National Association of Insurance Commissioners (NAIC). However, keep in mind that final expense policies with State Farm have a maximum death benefit of only $10,000.
Learn more: State Farm Insurance review
Mutual of Omaha
Ranked fifth in J.D. Power’s U.S. Life Insurance Study, Mutual of Omaha has provided quality insurance products since 1909. The carrier offers whole life and universal life policies, and its term life coverage limits start at $100,000. Mutual of Omaha sells term life coverage to customers between 18 and 80 years old, and offers terms ranging from 10 to 30 years.
You can couple a Mutual of Omaha life insurance policy with accidental death coverage, which allows your beneficiary to get two payouts if your death is ruled an accident. You can get a quote online, but you will have to speak with a representative to complete your application and purchase a policy. Before purchasing coverage, keep in mind that Mutual of Omaha only has locations in 34 U.S. states, so if having a local agent is something you value you’ll want to check if there is one local to you before going through with the quote process.
Learn more: Mutual of Omaha Insurance review
Liberty Mutual was not ranked in J.D. Power’s 2021 U.S. Life Insurance Study, but it’s a strong provider nonetheless. Liberty Mutual offers whole life insurance and term life policies, including simplified issue term and whole life policies without a medical exam.
You can get a life insurance quote from Liberty Mutual online, but you’ll need to work with an agent to complete the purchase process. Liberty Mutual offers a wide choice of riders and add-on benefits to tailor your life insurance policy for your family’s needs. However, Liberty Mutual does have a higher-than-average complaint index of 2.76, suggesting it might not be the best fit for customers looking for top-rated customer service.
Learn more: Liberty Mutual Insurance review
Reasons to consider a term life insurance policy
Term life insurance is a type of life insurance policy that remains in effect for a set amount of time, typically between 10 and 30 years. Many policyholders choose term life insurance because it’s significantly cheaper than permanent life insurance. Term life insurance may work for families that want coverage for a specific period of time, such as when their children are young or while their mortgage is active. If you’re looking for cheap life insurance, a term life insurance policy might be worth your research for the following reasons.
- Low premiums: Term life insurance policy premiums are around five to 10 times cheaper than permanent life insurance policies, on average.
- Expires after a preselected period of time: Term life insurance policies remain in effect for a period of time that the policyholder chooses, usually between 10 and 30 years. Term life insurance may be right for policyholders who only want coverage for a certain period of time, such as when their children are young, or while they’re actively paying a mortgage.
- Option to convert to permanent insurance: If your term life insurance policy expires before you pass away, you’ll stop paying premiums and will not receive a death benefit. However, many of the best life insurance companies offer conversion riders that allow you to convert your term policy to a permanent policy before the term expires.
How to get cheaper life insurance
Life insurance rates vary from person to person, as these rates are highly dependent on your age and bill of health. In general, younger, healthier policyholders pay lower premiums than older, at-risk applicants. If you’re hoping to lower your life insurance rate, these steps may help you shave a few dollars off your monthly premium.
- Try to purchase a policy while you’re young. The longer you wait to buy life insurance, the more you’ll likely pay in premiums.
- Manage the parts of your health that are in your control. If you have a preexisting condition, follow the doctor’s orders to manage it. For instance, Type 2 Diabetes can be managed well with a healthy diet, prescribed medication, sufficient exercise and adequate sleep.
- Cut out smoking and/or other nicotine products. Since smoking can trigger long-term health problems, insurers typically have much higher life insurance rates for smokers. If you want to lower your premium, you may want to consider quitting as soon as possible.
- Avoid dangerous activities. Risky hobbies like skydiving and rock climbing could increase your life insurance premium significantly. If you want to lower rates, you may want to cut out dangerous activities.
- Reevaluate your coverage level. Once you’ve paid off your mortgage and your kids have moved away from home, you may not need as much life insurance coverage. Reevaluating your coverage and choosing a policy with lower premiums and a lower death benefit may be right for you.
- Evaluate employment benefits. Life insurance provided through employer benefit programs sometimes offers lower rates because they benefit from group pricing. Keep in mind, these policies will typically end if you leave your employer or retire.
Learn more: How to buy life insurance
Frequently asked questions
Choosing the best life insurance policy is not a decision to take lightly. The insurance company’s history, as well as its reputation for customer service, financial stability and death benefit payouts, are just a few of the things that can impact both your experience and policy value. We assessed NAIC ratings based on market share, financial stability ratings from sources like AM Best and customer satisfaction scores from J.D. Power. We also examined the number of riders available, general accessibility, coverage capacity and whether medical exams were required as part of the underwriting process in order to make our picks.