Money & Finance

Affordable Life Insurance Policies: For Families, Adults, Seniors, No Medical, Smokers, & More

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Woman filling out life insurance form (caption: Best Cheap Life Insurance)No one wants to pay too much for life insurance, but how do you get the best rates? The short answer: focus on term life insurance and get multiple quotes. Sounds simple, right? Not exactly. Cheapest doesn’t always mean you’re getting the best coverage for the lowest rates. We give you some targeted tips on what you need to consider to make sure you’re saving as much as you can without skimping on your family’s financial needs.

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Article Overview

7 Factors That Can Affect Your Life Insurance Rate

First, it helps to understand all the factors that life insurance companies consider when personalizing your policy pricing.

Icons showing Factors that affect Life Insurance Rate

  1. Your overall health – Want the cheapest rate? Exercise regularly and eat well.
  2. Your weight – The lower your BMI (Body Mass Index), the better. A good incentive to lose weight and get in shape, right?
  3. Family medical history – Are both your parents living? Have your parents, grandparents or siblings had cancer or heart disease?
  4. Age – The older you are when you purchase a policy, the higher your rate.
  5. Gender – Policy rates are higher for men than women.
  6. Smoking – Don’t do it if you want cheap life insurance.
  7. Lifestyle – Participating in high-risk activities, like rock climbing or hang gliding, could raise your rates.

Which Policies Are The Most Affordable?

Below we give you a quick guide to the most affordable policy options. If you’re fairly new to life insurance and want to learn more about the different types of policies, read our comprehensive guide to life insurance types.

Tip: Without a doubt, it helps to understand the bigger picture of policy costs vs the benefits offered. This way you can make the best decision for both your budget and coverage goals. Remember, your ultimate goal is to provide for your family’s future needs.

Term Life Insurance

Term life insurance is typically the least expensive. This type of life insurance only covers you for a set time period (the upper limit is usually 30 years). The shorter the term on your policy, the less expensive, e.g., a 10-year-term policy costs less than a 30-year-term policy.

Why is term life insurance less expensive? The insurance provider usually doesn’t have to pay out because most people outlive the term and the policy expires. Some term life premiums, however, can rise with age, whereas permanent life premiums remain steady. “Level term”policies also have a fixed premium for the entire policy term.

Permanent Life Insurance

Permanent life insurance is more expensive than term life because it covers you for your entire life: as long you continue to  pay the premiums, the policy never expires before you die. Unlike term life, permanent life combines death benefit coverage with an investment fund (called the “cash value” of the policy).

Your premium payment for permanent life insurance contains two portions:

  1. The actuarial insurance cost to pay for the death benefit
  2. The investment portion that contributes to your cash value

The cash value grows each year, tax-deferred, meaning you won’t pay taxes on its gains while they’re accumulating, and you can borrow against the cash value fund without being taxed.

Although your premium payments are generally higher with permanent life vs term life, they don’t increase as you age. Another benefit to permanent life is the cash-value accumulation. As your cash value grows, you may be able to use it to pay your premiums.

What Are The Most Affordable Types Of Permanent Life Insurance?

There are three main variations of permanent life insurance available: whole, universal and variable. Generally, universal and variable life policies are less expensive.

Whole life is the most expensive because the investment portion of your premium is higher and fixed. With universal and variable policies you can adjust this value in your premium. Whole life policies also usually have lower interest rates than universal policies.

Learn More About Whole, Universal & Variable Life Insurance

4 Key Elements To Obtaining The Best Life Insurance Rates

1. Get Quotes From Multiple Carriers

Most people don’t bother with getting multiple quotes because it’s time-consuming, but this is one of the best ways to get the best rates. Save time by using our partner Insurify, which can easily give you multiple quotes at once from top rated life insurers.

2. Verify The Financial Health Of The Insurer

After you get a few quotes, check the financial reputation of the insurer you’re considering (especially if you’ve never heard of it). Affordable life insurance isn’t worth it if the insurance provider isn’t financially stable enough to pay out your benefits. You can find up-to-date information on insurers through A.M. Best, one of the top U.S. insurance rating agencies.

3. Bundle Coverage If Possible

You can get some size-able discounts if you bundle life insurance coverage with your home, car or other insurance needs. Consider all of your insurance needs and switching everything to one provider. This strategy may be time-consuming, but you can save more money in the long run with this approach.

4. Don’t Put Off Getting Life Insurance

You’ll typically find less expensive premiums when you’re younger and healthier. If you’re in your 20’s or early 30’s and getting married or having kids, don’t wait to get life insurance.

How Much Life Insurance Do I Need?

Most of us have no clue how much life insurance to buy. It’s easy to pick a random figure that fits your budget, but we advise against that. Be sure to read our guide to help you determine how much life insurance you’ll need. You want to be sure you buy enough to ensure the financial stability of your family.

Sally Jones

While attending the University of North Carolina at Chapel Hill’s graduate school for journalism and public relations, Sally began a long career researching and writing about hard-to-understand topics, such as insurance and finance. Her additional experience in marketing, fundraising, public relations and financial planning at various foundations and nonprofit organizations over the years has given her the practical tools to inform consumers about making the smartest business and personal financial decisions. Her work has appeared in many notable media outlets, including The Washington Post, Entrepreneur, People, Forbes, Huffington Post, and more. Speaking of smart living — growing up in the (at-the-time) per-capita murder capital of the U.S. (Richmond, VA) taught her a thing or two about the need for personal and home safety. Sally stays on top of all the latest gadgets and services to protect her and her teenage daughters from potential predators and thieves. And she brings this knowledge to every article she writes.

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