Knowing how rates are calculated and the policy types available can help you find cheap life insurance.

If you're looking for cheaper life insurance rates, you may be wondering how premiums are calculated. Life insurance companies often determine rates based on these and other factors:

  • Age
  • Gender
  • Current health conditions
  • Medical history (including your parents' and siblings' health history)
  • Whether you use nicotine (cigarettes, patches, chewing tobacco or other forms)
  • Motor vehicle record
  • Credit and bankruptcies
  • Hazardous occupations such as race car driving
  • Dangerous hobbies such as skydiving

More: How much is life insurance?

What is the cheapest life insurance policy?

Term life insurance is often the cheapest life insurance you can purchase. That's because you're paying only for life insurance coverage. Permanent life insurance tends to be more expensive because some of your premiums go toward cash value, fees and charges.

Term life can be purchased in periods of 5, 10, 20, 25 or 30 years. It's good for people who have specific time periods or debts to cover, such the years until retirement or paying off a mortgage. You may outlive your term life insurance policy, so there's a chance your beneficiaries won't receive the payout. If that doesn't fit with your goals, look at permanent life policies such as whole life insurance.

 

Term life insurance rates for a 30-year-old male

 

How to find cheap life insurance

Buy life insurance as soon as possible. The younger and healthier you are, the lower life insurance quotes will be. That's true no matter what type of life insurance you buy. Quotes will go up every year you wait, so locking in a policy now can save money later.

Calculate how much life insurance you need. Knowing the right coverage amount for your needs is important for comparing life insurance quotes. If you can't afford the size of policy you need, buy what you can afford now so that your family has some financial safety net. A little safety net is better than none.

Avoid riders. Another way to get a cheaper life insurance policy is to avoid policy riders. Riders offer additional coverage and benefits but add cost.

Compare quotes. Whether you're looking for term life or permanent life insurance, compare quotes to know if you're getting a good deal.