There is no single UK price for life insurance. Your monthly premium depends on the type and amount of cover, how long it lasts, your age, health, smoking and nicotine history, occupation and other underwriting considerations. Two people asking for the same cover amount may receive different quotations.
What affects the cost of life insurance?
Your age and health
Age is an important factor because the likelihood of a claim generally rises over time. Insurers may also take account of medical history, weight, family history and relevant existing health conditions. An application may lead to standard terms, a higher premium, specific conditions or a decline, depending on the circumstances and insurer.
Smoker and nicotine status
Smoking and the use of nicotine products can influence premiums. How insurers define smoker or non-smoker status and their look-back periods varies, so always answer the particular questions asked accurately. Don’t assume a change in habits automatically qualifies you for non-smoker pricing.
Amount and term of cover
More cover generally costs more, and maintaining cover for longer can increase premiums. A term chosen to protect children until financial independence may be different from a term designed to cover a mortgage. The aim is to avoid both under-insuring and paying for unnecessary protection.
Policy type and extra benefits
Level term cover keeps the insured benefit level, while decreasing term insurance reduces the benefit over time and may cost less when compared on a similar basis. Whole-of-life cover is designed differently, and added critical illness cover can materially change premiums and policy conditions.
Can I find out what life insurance costs for me?
The reliable way is to obtain an individual quotation based on accurate details. Advertised examples can be useful illustrations, but an example premium is not a price everyone can get and may depend on tightly defined assumptions. A quoted price may also change after underwriting.
If you’re unsure what information will be required or which cover structure fits, send us an enquiry. We’ll explain the relevant questions and help you compare your options from a wide panel of insurers.
How can I keep life insurance affordable?
- Decide what you need the policy to achieve and avoid paying for a higher amount of cover than necessary.
- Match the term to the period when your family or lender would need financial protection.
- Consider whether level or decreasing cover suits your circumstances, particularly for a repayment mortgage.
- Compare policy details, not just premium figures. Check the cover definition, exclusions and whether premiums are guaranteed or reviewable.
- Review existing cover first so you understand what you already have.
Is the cheapest policy the best?
Not necessarily. A lower premium can reflect a different amount of cover, a shorter term, a different policy structure or more limited benefits. The best choice depends on the protection actually needed. If price and cover don’t match what your dependants need, it may be poor value regardless of how cheap it looks.
Adviser insight — Jody Pearmain, Director of My Key Finance Ltd: I have advised on protection since 2008 and often find that clients initially compare headline monthly premiums without comparing what triggers payment. The important comparison is what the policy actually promises to pay and whether it protects the right people for the right length of time.
Written by Jody Pearmain, Director of My Key Finance Ltd. This is general information and not a personal recommendation. About our advice service.