Life Insurance for Low Income People

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  • Post last modified:December 11, 2020

Most people think that the challenges they face can melt away if they get more money. They operate on the premise that money can solve most problems.

Unfortunately, this is not always the case. Even people who have more money need insurance cover.  Anyway, that is beside the point.

The idea is that everyone needs life insurance.  Whether you are a high or low-income earner, you need insurance.  This article focuses on life insurance for low income people.

What is Considered as Low Income?

To be considered as a low-income earner, you need to earn an income that cannot adequately cater to the needs of your family. If you have a family of more than four people earning between $35,000- $47,000, you may be considered a low-income earner.

Similarly, even if you are earning up to $100,000 per year if the larger portion of your income is used to pay rent and provide for a family of more than four people, it is difficult may be difficult to lead a comfortable life.

The majority of people earning between $11,770 and $17,655 per year are targeted by low-income covers such as Obama care. These people receive subsidies and financial aids that help them to afford an insurance cover.

Also, the low-income group consists of people who are heavily subsidized. It also covers people who earn between 100-250% of the poverty levels.  Such people require financial aid so that they can pay out of pocket costs.

If a person with low income dies, he leaves no inheritance to the family. If he has unpaid mortgages, the family stands to lose the property. So, low-income families need life insurance more than their richer counterparts.

Factors that Affect Eligibility

There are a few factors that can affect your eligibility.

Here are a few factors:

factors that affect eligibilityWho is Eligible?

Whether you qualify for low insurance coverage or not is solely dependent on your income. The number of family members you are supporting may also determine whether you qualify or not.

The level of income that qualifies you for the coverage varies from state to state.

Way You Filling the Form

How you fill the form is an essential factor that determines whether you qualify for the insurance or not. Also, it determines whether you are eligible for assistance to help you qualify for financial aid that can help pay for a private cover in your state.

Family Size

The number of family members you are supporting is an essential factor. Single individuals earning less than $17,236 per year can qualify for life insurance. But an individual who supports a family of three but earns $29,435 also qualifies.


Disabled parents with low income are also eligible. The eligibility varies per state, but any family of three with a disabled parent earning less than $42,000 will qualify for the policy.

Buying Through a Marketplace

Any low-income earner buying a plan through the state marketplace could make you eligible to pay lower premiums. They could receive the assistance that lowers the amount of premium they finally pay for a marketplace plan.

What Type of Life Insurance Is Right For You?

There are many types of life insurance policies. Choosing the right one could be a big problem. Here are some of the policies you may need to consider.

Term Life Insurance

It is the simplest yet affordable. The policy pays the beneficiaries upon the death of the insured. The beneficiaries could be children, the spouse, or any other person that the insured chooses. Typically, the policy is intended to cater to your loved ones when you breathe your last.

How Does It Work?

The policy does not come with the saving component that is a common feature in the whole life insurance. Instead, it aims at protecting the dependents against the loss of their breadwinner.  The money is paid as a lump sum or could be released in installment.

Also, the money could be used to pay for funeral expenses, mortgage, or consumer debts. The premiums paid are always lower than what you will pay if you went for permanent life insurance.

Modified Whole Life Insurance

It is an insurance product whose level of premium is modified. It is designed for those people who are facing a financial crisis currently, but, has the opportunity to improve their condition in the future.

The premiums are lower at the beginning (1 to 5 years). Then, the premium increases and gets adjusted.

Hence, you have the opportunity to get the features of whole life insurance but pay a low premium at the starting. Check more about modified whole life insurance.

Final Expense Insurance

Final expense insurance covers the final bills after the insured dies. It can be used to pay for funeral expenses as well as medical bills incurred before death. It can also be used to cater for burial expenses and thus save the family from footing thousands of dollars that are normally gobbled as burial expenses.

The good thing about this policy is that the value of the policy is normally proportionate to what expenses you want to be paid when you breathe your last.

Tips to Get Life Insurance for Low Income People

tips to saveLife insurance is something that every person would love to have. Unfortunately, most people start thinking about it when they have a spouse and kids.

But, this is also the time when you need to pay other expenses. It is also the time you will be paying for a mortgage or school fees.

So logically, you need a low-cost insurance policy to make the burden lighter.

 Here are tips to help you get low-cost life insurance.

Determine the Amount of Coverage

The first thing you must do when contemplating taking insurance is to determine the right coverage for yourself. If you have a family, the coverage should be enough for your loved ones. Look at the payout and how much your family is likely to receive. Look at the possibility of anything changing.

Compare Options

The best strategy that can help you to get low-cost insurance entails comparing the policies available and selecting one that is low cost. However, it must offer the greatest benefits.

Consider Term Life Insurance

A term life policy is certainly the better option if you are interested in a low-cost policy. It allows you to pay a predetermined set of premiums throughout the number of years the policy will be running. It distributes the cost of the policy for several years and makes it affordable.

Work On Your Health

The cost of life insurance is determined by your state of health and your lifestyle. So, eating a balanced diet and stopping to smoke a year before you go for the policy could help to lower the premiums.

Also, leading a stress-free life can help to boost your health. It greatly reduces the cost of the policy.

Do Some Research Online

Doing intensive research online can help you to identify affordable life insurance. You can also connect with several representatives who will advise you on the things you can do to help you lower the cost of your policy.

Alternatively, you may need to talk to brokers who will help you determine the amount of coverage that is enough for you.


Indeed, many companies that offer life insurance are available for your consideration. Unfortunately, some of them are expensive and beyond reach.

Luckily, you can get an affordable policy. There are plenty of options for low-income people that can satisfy your needs.

All you need to do is to work on your health, change your lifestyle, and research the best options available. You can consider reading this guide on life insurance for dummies.

Linda Chavez

I'm a burial & senior life insurance expert, independent agent, Founder & CEO of Seniors Life Insurance Finder. I have been working in this sector since 2004 and established my own company in 2014. I have a team of seven members, and we are trying hard to share the knowledge we've gathered. We know how difficult often it is to find an affordable policy. Hence, we are doing our best to help you.