How to find affordable life insurance

Buying term life, comparing quotes, and knowing how companies set premiums can help you find an affordable life insurance policy.

Amanda Shih author photo

Amanda Shih

Published November 19, 2020

KEY TAKEAWAYS

  • A term life insurance policy is the most affordable option for most people

  • You’ll get cheaper premiums when you’re younger and healthier

  • Calculate how much coverage you need so you’re not buying more than necessary

  • Comparing quotes from multiple insurers can save you more than $1,300 per year

Life insurance is a crucial way to provide your loved ones with a financial safety net, so it’s important to buy the right policy. But in addition to getting the best life insurance coverage, you also want to find an affordable life insurance plan.

You may feel like there has to be a tradeoff between finding a cheap policy and a comprehensive one, but buying when you’re younger, choosing a term life policy, and comparing quotes can help you save money without compromising the coverage you need.

Buy life insurance early

Life insurance isn’t usually a top priority for young people who may not have mortgages, dependents, or the same financial responsibilities that older people might. But one way to get the cheapest life insurance is to buy a life insurance policy early.

Life insurance is almost always cheaper the younger you are when you buy it. Premiums rise an average of 4.5-9% every year you put off applying. Plus, when you buy life insurance young, you lock in premiums for the entire duration of the policy. That means you’ll be paying the same low price decades later.

The following table demonstrates how the monthly cost of a term life insurance policy increases as you age, based on three coverage amounts. Note that average costs for women are lower than those for men due to their longer life expectancy.

Average life insurance rates by age

AGE $500,000$750,000$1,000,000
30Male$27.56$38.21$46.60
Female$21.97$29.86$36.00
35Male$30.23$40.42$51.55
Female$25.39$33.58$42.48
40Male$39.18$55.56$69.58
Female$32.53$45.61$56.57
45Male$60.76$85.84$113.33
Female$47.44$66.35$86.30
50Male$93.40$136.89$173.22
Female$71.13$103.22$128.52
55Male$150.92$222.39$286.53
Female$107.72$154.80$206.37
60Male$262.39$387.12$490.80
Female$188.79$277.54$349.08

Methodology: Rates are calculated for male and female non-smokers in Ohio, who qualify for a Preferred rate class, obtaining a 20-year term life insurance policy. Individual rates will vary as specific circumstances will affect each customer's rate. Rate illustration valid as of 11/13/2020.

Shopping for life insurance over 50

Even though you’ll get the cheapest premiums if you buy when you’re younger, you may still need a policy later in life. While it will be more expensive, it’s still possible to find low-cost life insurance, especially if you’re healthy.

Look for a smaller benefit amount and shorter term length. Because you have fewer, if any, dependents, you likely need a smaller and shorter policy, like one that lasts until your mortgage is paid. The shorter term and lower death benefit will get you more affordable life insurance premiums.

No medical exam life insurance, like simplified issue or guaranteed issue life insurance, allows you to apply for a life insurance plan without getting a medical exam. It can be more expensive than a term policy but could be the most affordable option for older or less healthy applicants.

Buy a term life policy

In almost every case, a term policy is the cheapest life insurance option. It’s also the most straightforward type of life insurance; it provides a death benefit if you die while the policy is active and it expires after a set period of time.

Because you can choose whichever term length works for your situation, you only pay for the insurance coverage you want. If you’re in your mid-30s, you could realistically take out a 20-year, $1 million term life policy and pay insurance premiums of about $50 per month or less.

Supplemental group life insurance

Group coverage through a workplace is a common benefit that you can get at little or no cost. The downside is that it usually won’t provide enough coverage for all your needs and it’s tied to your employment.

But, group coverage can supplement a private policy. If you’re able to get a $50,000 policy paid by your employer, you can consider lowering your private policy’s coverage (and thus your monthly premiums) slightly to make it more affordable.

Affordable whole life insurance

Whole life insurance is a type of permanent life insurance, which means it lasts for the rest of your life. It comes with a cash value, which gains interest over time.

A whole or permanent life policy can be a valuable tool for some people, but the investment component and maintenance fees make whole life insurance premiums five to 15 times more expensive than term life.

If you need a whole life policy, the best way to find competitive pricing is to compare quotes from multiple insurers and be discerning about the amount of coverage you need.

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Choose the best life insurance company for your situation

Life insurance companies largely set your premiums through the underwriting process. This is where they determine how risky you’ll be to insure by using:

  • Your current health and medical history: primarily through a medical exam and a request for documents from your doctor.
  • Motor vehicle reports that show your driving record.
  • A short phone interview about your hobbies, finances, and health.

Afterward, the underwriter assigns you a classification that determines your policy cost.

But not every life insurance company treats every health condition the same way. For example, certain companies offer cheaper premiums than others to former or current smokers or marijuana smokers. That’s why the best life insurance company for you and the one that will offer the most affordable life insurance depends on your individual profile.

Get the right amount of coverage

It’s easy to overestimate the amount of life insurance you need and buy too much, raising the cost considerably. But it’s also easy to underestimate how much you need, potentially leaving your beneficiaries without support when you’re gone. Policygenius advisers recommend having coverage equal to at least 10-15x your salary.

Consider all of your financial obligations when choosing a benefit amount and term length, including:

  • Existing debt, like a mortgage or student loans
  • Future college plans (for you, a spouse, or a child)
  • Dependents, including children and aging parents
  • Any financial cushion you want to leave behind
  • Final expenses, like end-of-life medical care or funeral costs

Consider the ladder strategy

Your life insurance needs decrease over time: your mortgage debt decreases, your children need less financial support, and so on.

Using the ladder strategy, you can have the coverage you need only when you need it. With the ladder strategy, you buy multiple policies of varying coverage amounts and term lengths. As the decades pass, some policies expire, and eventually you’ll be paying only for a small policy that covers your current needs and nothing extra. You can spend up to 50% less on life insurance by laddering smaller policies versus buying one larger policy.

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Compare quotes

If you want the most affordable life insurance premiums, it’s crucial to compare quotes for different plans. Comparing life insurance quotes can save you $1,300 or more per year.

The easiest way to quickly compare quotes from multiple insurance providers is with an independent insurance broker like Policygenius. Otherwise, you will need to do all of the above — figure out what type of insurance you need, the death benefit amount, which company is best for your health, and more — then go to each company individually and compare manually.

Using a broker does not come with additional costs, and they can not only find the right policy for your needs but compare quotes and identify the company most likely to offer you the cheapest life insurance policy no matter your age or health concerns.

It’s easier than you might think to find an affordable life insurance policy without sacrificing any of the protection you need. Buying term life insurance when you’re young and healthy and, most importantly, comparing quotes on your own or with an independent broker can save you thousands of dollars over the life of your policy.

How to find affordable life insurance FAQ:

What is the least expensive type of life insurance?

Term life insurance is the most affordable type of life insurance for the majority of people, and costs five to 15 times less than whole life insurance.

How can I get cheap life insurance?

The best way to find a cheaper life insurance policy is to compare quotes across multiple providers. Buying a policy when you’re younger and healthier and choosing a coverage amount and length you can afford will also save you money long term.

How much does life insurance cost?

Life insurance premiums are different for every person and type of policy, but generally, the older or less healthy you are the higher your premiums will be. If you have risky hobbies or violations on your driving record, you’ll also pay more.

Insurance Expert

Amanda Shih

Insurance Expert

Amanda Shih is an insurance editor at Policygenius in New York City. Previously, she worked in nonfiction book publishing and freelance content marketing. Amanda has a B.A. in literature and communication from New York University.

Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.

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