If you’re a UK resident considering purchasing life insurance, one of your first questions is likely “how much will it cost?” The cost of life insurance depends on several factors. In this article, we’ll break down what impacts your life insurance rates and provide sample price ranges so you know what to expect.
What Affects Life Insurance Rates in the UK?
When you apply for life insurance through a UK provider, the insurer will assess your individual risk profile to determine pricing. Some key factors that influence your rate include:
- Age – The younger you are, the lower your rate since the risk of death is statistically lower. Rates increase as you age. Insurers view age brackets differently, but expect prices to rise steadily from your 20s through your 60s.
- Health – Applicants in excellent health typically get the best rates. Certain medical conditions like heart disease, cancer, or diabetes can increase prices. Your lifestyle factors are also considered, with smoking raising rates.
- Gender – Statistically women tend to live longer than men in the UK. This means women often get lower pricing than men for the same coverage when all else is equal.
- Location – Where you live in the UK can impact rates. Postcodes with higher mortality rates may have marginally higher pricing.
- Occupation – High risk jobs like oil rig worker, pilot, or firefighter can increase rates for occupational hazard reasons.
- Policy Type – Term life is almost always cheaper than permanent policies like whole life insurance. Level vs. decreasing term also causes rate variances.
- Coverage Amount – The higher the death benefit, the more coverage costs. But most policies offer discounts as you reach higher amounts.
Average Cost of Term Life Insurance in the UK
Term life is one of the most affordable forms of life insurance in the UK. Here are some average term life policy prices by age for £200,000 worth of coverage:
- Age 25: £120 – £150 per year
- Age 35: £150 – £220 per year
- Age 45: £320 – £550 per year
- Age 55: £700 – £1100 per year
Of course, your specific quote will depend on your unique situation including health, occupation, gender, and other attributes. Most healthy adults qualify for term life rates on the lower end of the ranges above.
Some UK term life policies allow you to lock in guaranteed rates for the coverage period. This prevents the increases that normally come with age.
Whole Life Insurance Costs in the UK
Whole life insurance is a permanent form of coverage combining death benefit protection with a savings or investment component. Premiums are higher since it provides lifelong coverage. Some sample whole life policy costs are:
- Age 30: £90 – £300 per month
- Age 40: £150 – £400 per month
- Age 50: £250 – £600 per month
The premium range is wide since whole life policies have varying underlying investment returns which influence long-term costs.
In the UK, whole life plans often have no fixed term. You pay the same premium from inception until death. This leads to decreasing costs relative to the death benefit over the policy lifetime.
The Takeaway
While pricing is based on your specific situation, these ballpark life insurance rates give you a general UK benchmark on how much coverage costs. Term life is relatively inexpensive, especially when younger. Permanent insurance costs more but builds cash value over time. If budget is a concern, term life is likely the most affordable option.
Use this article as a starting point as you begin getting quotes for the coverage amount and policy type that meet your needs. Being an informed consumer makes it easier to shop for competitive UK life insurance rates.