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Protecting your family’s financial future is invaluable, but life insurance can come with a high price tag. And since you’ll need to commit to paying premiums over many years to keep the policy active, it’s important to find a policy you can afford. Term coverage is the cheapest form of life insurance, and it’s typically sufficient for most families.
But pricing can vary widely even among term life insurance providers. We reviewed term quotes from 32 carriers to determine which offer the cheapest coverage and, of those, which are the strongest life insurance companies. Here are our top picks for the most affordable life insurance companies.
Best Overall : Protective Life Insurance
Tied with Banner for cheapest term coverage
Up to 40-year terms available
No-medical-exam life insurance up to $1 million for ages 18-45
Accepts credit cards
Poor J.D. Power rating
Protective Life is tied with Banner in offering the most affordable term coverage of the top companies we reviewed. Protective’s term lengths of up to 40 years are some of the longest in the industry, and an option for conversion mean you can buy what you can afford now and potentially keep your coverage indefinitely. Plus, if you’re 18-45 years old, you can apply for up to $1 million in coverage without taking a medical exam. Term policies include a terminal illness rider at no cost that you can use to access the death benefit if you become terminally ill.
One drawback is that Protective scored 16th out of 21 insurers for in the J.D. Power 2021 U.S. Individual Life Insurance Study. The study measures customer satisfaction among the largest insurance companies. However, the company had fewer complaints than expected for its size, according to the National Association of Insurance Commissioners (NAIC). The company has an A+ (Superior) grade from AM Best for its financial strength, too.
There’s a convenient online application for term policies and Protective accepts credit card payments. If affordability is your main concern, Protective is one of the best choices, and it has a lot of other great coverage options as well.
For more details, see our full Protective Life Insurance review.
Best for Cheapest Coverage : Banner
Affordable term coverage that is stackable
Up to 40-year terms available
Convertible until the end of the term
Up to $1 million in no-medical-exam coverage for ages 20-40
Fewer coverage types than other top insurers
Fewer living benefits than competing companies
Banner Life, a subsidiary of Legal & General America, was a close second for the best overall category, nearly matching Protective’s rates. Banner Life offers affordable term policies of up to 40 years as well, and you can apply for up to $1 million (ages 20-40) in coverage without a medical exam. Banner Life also lets you stack your coverage with 10, 15, or 20-year term riders. For example, you might buy $500,000 in coverage that lasts 30 years and add a $500,000 term rider to boost your coverage for 10 years while you’re paying off your mortgage. It’s a cost-effective way to structure your coverage, and you’d likely pay less over time with this strategy than you would by buying a larger base policy.
Banner Life lets you convert your term policy to permanent coverage so you have the option to keep your coverage for life. You can also renew coverage annually once it expires, though that’s not a long-term solution to keeping a life insurance policy. Like Protective, the company also offers a terminal illness rider with term policies.
Banner has an A+ (Superior) financial strength rating from AM Best and far fewer complaints with the NAIC than expected, given its size.
Best for Customer Satisfaction : Pacific Life
High marks for customer satisfaction
Very affordable term coverage
Up to $5 million in no-medical-exam coverage
Term coverage is convertible through the length of the term
No quotes on the website
Can’t apply without an agent
Pacific Life’s high marks for customer satisfaction mean you’ll more likely to have an excellent experience when you work with the company, relative to many other insurers. Pacific Life ranks 4th out of 21 insurers in the J.D. Power life insurance study and received far fewer complaints with the NAIC than expected given its size. In fact, the company received a lower average complaint index than any of the other top companies we reviewed.
Plus, Pacific Life offers great coverage options, including up to $5 million in coverage without a medical exam for healthy applicants age 50 or younger. You can choose a 10-30 year term and you have the option to convert your policy to permanent coverage. Coverage is very affordable, and Pacific Life received an A+ (Superior) financial strength rating from AM Best.
Perhaps the only drawback is that you won’t find quotes on the company’s website and can’t apply without assistance from an agent.
Best for No Medical Exam : Penn Mutual Life Insurance
Affordable term coverage
Accepts credit cards
No-medical-exam coverage up to $7.5 million
Far fewer customer complaints than expected
Some policies convertible until the end of the term
No online quotes
No online application
Policy details are not available online
Of the insurers we reviewed, Penn Mutual offers the highest coverage limits for no-medical-exam coverage, and term coverage is very affordable. You can convert some policies through the level term until age 70 (or for the first 20 years of a 30-year term). This is a particularly nice feature since some life insurers limit the conversion period, such as to the first 10 policy years. Penn Mutual includes a chronic illness rider on the first five years of a conversion, too.
The company gets high marks for financial strength and customer satisfaction. It has an A+ (Superior) financial stability grade from AM Best and a three-year average complaint index of just 0.135 with the NAIC, indicating far fewer complaints than expected given the company’s market share.
Where Penn Mutual falls short is online tools. The company doesn’t offer online quotes or an online application. And the website has little information regarding policy specifics. If you want a policy from Penn Mutual, you’ll need to work with an agent throughout the process.
Best for Financial Stability : Thrivent
Cheap term coverage
Eligible policies pay dividends
Superior financial strength rating
Far fewer consumer complaints than expected
Online application not available without an agent
Faith-based membership required
Of the cheapest life insurance companies we reviewed, Thrivent had the best financial strength ratings—an A++ (Superior) grade from AM Best. The company also had far fewer complaints with the NAIC than expected given its size, with a three-year average complaint index of just 0.127. Thrivent also offers whole-life policies that pay dividends and its term policies are convertible.
The company’s main drawback is that you must be a Christian who is “seeking to live out their faith” and share in the company’s statement of faith to get a policy. Additionally, the company offers fewer riders than some other term providers. You’ll also need to call an agent to get your questions answered or apply because details are limited online and there’s no online application.
Protective Life was our top pick for the most affordable life insurance provider because of its competitive term premiums and 40-year terms, but Banner is a close second. But if you don’t mind speaking with an agent instead and want the best customer service experience, Pacific Life would be a good choice, along with Penn Mutual, which has very high coverage limits without a medical exam. Thrivent’s financial stability is excellent, but its limited membership isn’t a good fit for some people.
What Is Term Life Insurance?
Term life insurance is coverage you buy that covers a specific time period, typically between 10 and 30 years. Premiums are typically level (the same) throughout the term, and the death benefit is guaranteed if you die within the term. But term life insurance expires at the end of the term, so if you die after the term ends (and haven’t renewed or converted the policy), your beneficiaries won’t receive a payout. However, some companies offer the option to renew your term policy on an annual basis or convert it to permanent coverage without taking a medical exam.
In contrast, permanent life insurance is designed to last your entire life. It guarantees a death benefit for life as long as sufficient premiums are paid, and builds cash value over time that you can borrow against. Your premiums are typically more expensive than term life insurance.
Most people need coverage when they still have financial obligations, such as paying off a mortgage or saving for college costs.
Why Is Term Life Insurance So Cheap?
Term life insurance is cheap because the death benefit is only guaranteed if you die within the term, and term policies are designed to expire before you reach old age (when coverage is the most expensive). It’s possible that you could outlive your policy’s termination date, meaning the insurance company never has to pay a death benefit even though you paid years’ worth of premiums. Additionally, term life insurance does not build cash value.
How Much Life Insurance Do I Need?
You might hear financial advice that proposes a coverage amount that is a multiple of your salary. However, to estimate your true coverage needs, consider adding up the sources of income that your dependents would need to replace if you died. This should include “hidden income,” which is things like health insurance coverage, retirement contributions, and other benefits. You should also add coverage for any expenses that your family might incur as a result of your death, like burial expenses and relocation expenses, for example.
But if all those calculations seem overwhelming, many of the life insurance providers we reviewed offer life insurance calculators or educational resources to help you determine how much coverage you’ll need. For example, Protective Life will calculate your life insurance need if you provide some information about your income, assets, and debts.
How We Chose the Best Life Insurance Companies
We developed a comprehensive life insurance methodology to put together our review of the most affordable life insurance companies. To start, we researched what consumers want from life insurance companies. For that, we looked to third-party consumer studies, including J.D. Power’s 2021 U.S. Life Insurance New Business Study and the 2021 Insurance Barometer Study by Life Happens and LIMRA.
Then, we gathered more than 50 data points on 91 life insurance companies, including ratings for:
- Financial strength
- Policy types and features
- Available riders
- Customer satisfaction
- Customer complaints
- Years in business
- Online tools
- No-exam options
Our review process gave preference to companies with top ratings from AM Best, a lower-than-expected customer complaint rate, and a solid suite of products and resources. In particular, we valued online quoting and application tools, transparent pricing, and no-exam policy options. We gave companies a boost in their rating if customer service was accessible via features like live chat, too. To rank the companies we researched, we applied the following weights to each category:
- Customer education, application, and online service features: 32%
- Policy types, features, and riders: 29%
- Financial stability: 17%
- Customer satisfaction ratings: 15%
- Cost: 8%
To familiarize ourselves with each company's individual offerings, we researched product specifics, including maximum issue ages, maximum coverage amounts, riders, and product-specific application processes. We used our findings to determine the best companies for different products and consumer groups, such as term-life policies and people over 50.
The companies that scored the highest in our rankings had the soundest financial stability, fewest complaints, lowest cost, and most generous no-medical-exam options, as we believe these companies are best positioned to help customers secure the life insurance coverage they need.