Life insurance is a crucial part of any comprehensive financial plan, but it can often come with a hefty price tag. Term life insurance, which provides coverage for a set period, typically presents a more budget-friendly alternative to permanent life insurance options, such as whole life. CNBC Select has carefully analyzed the market to identify the most affordable term life insurance policies across several key categories.
Best Cheap Life Insurance
Here’s a rundown of our top picks, followed by detailed reviews of each:
- Best for no-medical-exam policies: Ladder
- Best for living benefits: Symetra
- Best for seniors: Corebridge Direct
- Best for high coverage limits: Pacific Life
- Best for applying online: Amica
- Best for converting into whole life: Guardian
- Best for customer satisfaction: State Farm
Ladder
Ladder offers a streamlined approach to term life insurance, catering to those who prefer to skip the traditional medical exam. The company provides coverage up to $3 million and allows policyholders to adjust their coverage and premiums as their needs change, all through a digital-first platform.
Key Features
- No-exam term life insurance with coverage up to $3 million.
- Online application process.
- Ability to adjust premiums and coverage for free.
Considerations
- No riders.
- Does not offer permanent life insurance.
- Enrollment age limit is 60 years old.
Who is this for? Ladder is an excellent choice for individuals seeking a convenient, exam-free application process. Their policies begin at just $5 a month.
Standout Benefits: You have the flexibility to adjust the death benefit as needed, and there’s a referral bonus of up to $1,000 for new customers.
Symetra
Symetra stands out with its SwiftTerm policies, which can be purchased online quickly, with policies available of up to $5 million, and also includes accelerated death benefits. Customers aged 20 to 60 may apply for term insurance, while individuals ages 20 to 85 can apply for permanent life insurance.
Key Features
- Policies can be bought online quickly for qualified applicants.
- SwiftTerm policies include accelerated death benefits for those with a terminal illness.
- Several optional riders can be included.
Considerations
- Doesn’t offer whole life insurance options
- Not rated by J.D. Power
Who is this for? Symetra’s policies with the accelerated death benefit are great for those who may have a terminal illness.
Standout Benefits: Policy applicants must be between 20 and 60. Death benefits can go up to $5 million.
Corebridge Direct
Corebridge Direct has been providing life insurance since 1995 and offers varying coverage types with flexible options. They allow for online quotes, and have term policies available for customers up to 80 years of age.
Key Features
- 18 different term options, including any term between 15 and 30 years.
- Offers renewable and convertible term life insurance.
Considerations
- Ranked last for customer satisfaction by J.D. Power.
- High volume of customer complaints to regulators.
- Does not underwrite its policies.
Who is this for? Corebridge offers two term life policies, and can be can be converted to a permanent plan without an additional medical exam or fee.
Standout Benefits: CoreBridge Direct has an optional return-of-premium rider, enabling you to get your whole premium returned if you outlive your term.
Pacific Life
Pacific Life differentiates itself by offering term, permanent, and no-exam options with an accelerated death benefit, included at no added cost. The company’s plans have an high age limit for enrollment.
Key Features
- Most plans have age limit of 90 for coverage.
- Term policies can convert to permanent life without an exam.
Considerations
- No online quotes.
- Must be purchased through an advisor.
Who is this for? Pacific Life has term life insurance policies that pay out more than $3 million, more than many providers.
Standout Benefits: Term policies can be converted to permanent life policies without a medical exam.
Amica
Amica simplifies the insurance process by allowing customers to get rate quotes and apply online. It also provides bundling discounts.
Key Features
- Can get term life quote and apply online.
- 10% bundling discount with auto insurance
- Terminal illness rider included
Considerations
- Not all policies and features available in all states.
- No universal or variable life insurance.
- No other riders available
Who is this for? Amica streamlines the insurance process by allowing you to get rate quotes and apply online. If you meet the health requirements, you may even be able to skip the medical exam.
Standout Benefits: Amica also offers whole life insurance policies that can build cash value you can tap while you’re still alive.
Guardian
For those anticipating potential changes in their life insurance needs, Guardian offers a compelling feature: the option to convert term insurance into a whole life policy within the first five years without incurring any extra costs.
Key Features
- Has paid dividends since 1868.
- Whole life insurance policies up to age 90.
- Available in all 50 states.
Considerations
- Can’t get rate quotes or apply online.
- Customer service not available 24/7.
- Doesn’t offer auto or home insurance.
Who is this for? Think your needs might change? Guardian allows you to convert term insurance into a whole life policy in the first five years at no additional cost.
Standout Benefits: Policies are available to applicants between the ages of 18 and 75, one of the biggest age ranges we’ve seen for term life insurance.
State Farm
State Farm stands out for its excellent customer service and a wide range of life insurance products, including term, whole, and universal life policies. The company offers a bundling discount for those who combine life insurance with home or auto insurance.
Key Features
- Reasonable rates
- Top-rated for customer service
- Return of premium benefit available
- Term policies can be converted to permanent.
Considerations
- Policies must be purchased through a State Farm agent.
- Doesn’t sell policies in Rhode Island or Massachusetts.
- Fewer riders than the competition.
- Accelerated death benefit costs extra.
Who is this for? State Farm excels in customer satisfaction and offers a range of policy options.
Standout Benefits: Enjoy a bundling discount if you combine your life insurance policy with State Farm home or auto insurance.
Understanding the Types of Life Insurance
- Term Life Insurance: Provides coverage for a specific period, making it a cost-effective choice for those with temporary needs. It’s particularly useful for parents with dependent children or those managing mortgage payments. Term policies typically offer the most affordable premiums.
- Whole Life Insurance: This offers permanent protection with fixed premiums and a guaranteed death benefit. Policies accumulate cash value that can be used for payments, withdrawals, or as loan collateral.
- Universal Life Insurance: Offers flexibility in payments and death benefits, allowing for customization and cash value accumulation.
Key Considerations and Strategies for Saving on Life Insurance
To secure the most affordable rates, consider the following:
- Term Life Policies: Choose term life for its lower costs compared to whole life insurance.
- Early Application: Apply when you are young to lock in lower premiums, as rates increase with age.
- Maintain a Healthy Lifestyle: Exercise regularly, eat a balanced diet, moderate alcohol consumption, and prioritize sleep. These habits can improve your health class with providers, leading to favorable rates.
- Avoid Smoking: Tobacco use can significantly increase premiums. Depending on the provider, this includes cigarettes, chewing tobacco, vapes, and marijuana.
- Medical Exam: If you’re in good health, consider policies that require a medical exam, which typically offer lower premiums and higher coverage amounts.
- Comparison Shop: Insurance companies evaluate medical histories and risk factors differently, so it’s important to get quotes from multiple providers and ask about potential discounts.
Life Insurance FAQs
- How much life insurance do I need? A common guideline is to have enough coverage to equal at least ten times your annual income. The DIME method (debts, income, mortgage, education) is another approach.
- What is the cheapest type of life insurance? Term life insurance is typically the most affordable due to its fixed term and lack of cash value component.
- Is getting life insurance through work enough? Employer-provided group life insurance can be a starting point, but it may not be sufficient if you have dependents. Experts often suggest having coverage equivalent to ten times your annual income.
- Is life insurance worth it? Life insurance is valuable if your family relies on your income, has mortgage payments, or has higher education expenses. Permanent life insurance offers cash value benefits, and final expense policies cover end-of-life costs.
By carefully assessing your needs and comparing options, you can find an affordable term life insurance policy that provides peace of mind and financial security for your loved ones.
