No matter which company you choose, the LifeLine service is free to eligible customers. 100% free. If you qualify, you get a free phone and 250 free minutes of wireless voice service each month. There are no monthly bills, no long-term contracts, no activation fees, no recurring fees and no surcharges. Free means free.
The carriers, Safelink Wireless, Assurance Wireless and ReachOut Wireless, all are compensated by the United States Federal Communications Commission (FCC) for giving you a free cell phone. They get an initial amount of money from the Universal Service Fund to pay for the actual phone they give out, and then they are paid monthly to help carry the cost of your air time.
Of course, the carriers hope that you will upgrade the phone or buy extra minutes, so they can make more money.