Updated: November 13, 2019

How Much is Life Insurance in the UK?

Looking for a breakdown of how much life insurance will cost for you? Read our guide to find out how life insurance providers calculate this and how to save money on your policy

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Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: November 13, 2019

Life insurance is one of the most popular forms of personal insurance products on the market. After all, it stands to reason that people want to provide financial security to their loved ones in the event of them passing away.

How much your life insurance policy is and how the cost is determined all depends on your personal situation, the type of cover you take out, and how much payout you want in the event of your death.

This article will tell you about the many factors that impact how much you should expect to pay for life insurance based on your situation.

How much does a life insurance policy cost?

As with all types of insurance, how much you can expect to pay for life cover depends on a number of variables. The good news, though, is that life insurance can be very affordable, with prices starting at as little as £4 a month for a young, healthy, non-smoking individual.

If you’re interested in taking out a policy make an enquiry and we’ll put you through to one of the specialists we work with who can get you a good price for life insurance.

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What impacts the cost a life insurance policy?

The age you are when you take out life cover will play a role (the younger you are, the cheaper it will likely be), as will what you want the end payout to be and the term over which you want to be protected.

If you want to take out a joint life insurance policy, you should expect to pay more than you would for single cover, although this is usually a less expensive option than two separate policies might cost you.

Other associated costs include whether you choose any add-ons (many insurers offer combined critical illness and life insurance plans, for example), and whether you choose to pay monthly or annually.

How much should life insurance cost on average per month for one person?

Age, again, plays a role because the older you are, the more at risk you are of developing an illness. Lifestyle, occupation, your current state of health, your medical history and your family’s medical history will also have an impact on the price you will need to pay.

For example, if you have a family history of a genetic condition such as cancer, heart disease, high blood pressure or diabetes, or if you currently suffer from one yourself, you’ll be deemed higher risk, and your premiums are likely to cost more and/or the provider may specifically exclude paying out on certain conditions.

Similarly, if you’re a heavy smoker, drink a lot or generally lead an unhealthy lifestyle, you pose more risk than someone who leads a healthy life – therefore you will likely pay more for your life insurance.

Picture a 25-year-old non-smoker: there are no genetic diseases running in the family, they rarely drink, exercise regularly and they follow a healthy diet. This individual would typically be deemed low-risk by insurers.

This person might be offered an average life insurance monthly premium payment of say, £4 – £10 a month – although of course, he or she may decide they want to spend more, depending on how much they want the end payout to be.

Can I get low-cost life insurance with no medical exam?

When you take out a life insurance policy, you will nearly always be subject to health checks and medical exams by reputable insurers. This is because how healthy you are is a key determinant as to how much your plan will cost you.

Be wary of insurers offering low-cost life cover with no medicalunless you’re over 50, in which case you usually receive guaranteed approval without health checks.

If you’re under 50 and have been offered life insurance without being subject to any medical exams, we’d advise you to check with us before committing so we can look into the legitimacy of the insurer and examine the terms of the contract to ensure you’re paying for the cover you need.

Price and value are two very different things. Remember the saying, “if it’s too good to be true, it probably is.”

What’s the average price for joint cover?

As the name suggests, joint life insurance provides cover for two people. They normally pay out for whoever dies first – although you can opt for it to be on the last surviving policyholder – and they’re quite popular to protect against debts such as mortgages as once the payout has paid the debt off, it doesn’t need to be paid off again.

For this reason, it often ends up being a more affordable option than it would be to take out two separate forms of life insurance – but it’s important to consider your needs before committing to a joint policy.

Again, how much you pay for your cover will depend on both holders’ circumstances and the desired payout.

Contact us for a free, no-obligation chat to find out more about the pros and cons of joint life cover.

How much should I be paying for annual life insurance?

If you’re in a position to pay for your life insurance annually rather than monthly, you may be able to save yourself some cash.

When you take out life insurance, many providers allow you to choose between monthly or annual premiums. If you choose an annual plan you may get discounted rates as you pose less risk than those who pay monthly and could potentially default.

Again, how much you end up spending on annual life insurance in total will be determined by how much payout you want, your individual circumstances, and of course, how long you live for.

Price vs. value

More important than anything, you must remember that life insurance is not something you buy as a token gesture just to say that you have it. It’s there to do an incredibly important job and it’s unwise to simply pick the cheapest deal without making sure it’s the most suitable one first.

What is the average policy payout?

How much payout you receive is completely down to you; when you take out life insurance, you stipulate how much you want your beneficiaries to receive when you die, which therefore impacts the cost of your monthly premiums.

As an example, the most recent figures suggest that the average value of “term length” life insurance payout was £81,268.78. For whole-of-life cover, the average payout was £4,740.14.

The vast difference between the average payouts for each type of cover illustrates the popularity of term insurance over whole-of-life, which tends to be a more costly option.

Read more about the differences between whole-of-life and term insurance policies or make an enquiry and speak to one of the experts we work with. They will be able to answer your questions and advise you on what cover you should consider, depending upon your own unique circumstances.

As independent advisors with access to all the insurance providers in the market, they will also be able to find the right cover for the best available price for you, saving you time, hassle and, potentially, money too.

Is free life insurance available?

In a word, yes, free life insurance is available – to some people, in particular circumstances.

There are a host of well-known insurers who offer free life insurance for expectant parents, which usually covers both parents and child(ren) for a 12 month period – although terms will vary by provider.

Lots of employers offer “death in service” as part of their benefits scheme, which is a fairly similar product to life insurance. However, you may not be automatically enrolled, so make sure to check with your employer.

While it may be tempting to rely on free life insurance, it should be treated as a supplement rather than a replacement, because these benefits can be subject to change and you’re unlikely to have the same flexibility in the plan terms.

How do interest rates affect policies?

If you have a decreasing or increasing policy the interest rates may indirectly affect your life insurance plan. Policies to protect capital repayment mortgages are normally on a decreasing basis, meaning that the sum assured decreases over time as the mortgage is paid off. This is often cheaper than a policy where the sum assured stays the same.

The policy will assume a certain interest rate at which it will decrease, the higher the rate, the higher the premium. If you had a mortgage with an interest rate of 6%, you could get a cheaper life insurance policy if it decreased at 4% but it wouldn’t be suitable as in the event of a claim there’d likely be a shortfall.

Should I use an online calculator to work out the cost?

Lots of insurance companies provide online calculators to help you compare quotes, which nearly always display the cheapest deals at the top of the page, luring you and attempting to convince you to opt for the lowest cost life insurance.

But as we’ve already said, it’s not usually a good idea to take out a policy based on price alone; the terms of the plan could have hidden clauses, or turn out to be completely unsuitable for you later on down the line.

What’s more, just because these calculators claim you’re eligible for certain deals, it doesn’t necessarily mean that you will be.

This is because many of these tools lack the ability to factor in all your personal circumstances – resulting in wasted time and disappointment on your part.

Speak to an advisor

As you have learned, it’s difficult to say how much a life insurance policy will cost without knowing more about you and your personal circumstances. So why not get in touch for a free, no-obligation chat?

The experts we work with will not only compare quotes to ensure you get a good price, they’ll provide you with an estimated cost of what your life insurance will be and use their tools and knowledge to hook you up with a policy best suited to your needs.

Make an enquiry or call us on 0808 189 0463.

The advisors we work with are experts in the field and have plenty of experience in arranging suitable, low-cost life cover for hundreds of satisfied customers.

Ask a quick question

We can help! We know everyone's circumstances are different, that's why we work with brokers who are experts in life insurance. Ask us a question and we'll get the best expert to help.

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Pete Mugleston

Pete Mugleston

Mortgage Expert

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

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FCA Disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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