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Budget life insurance – does it really save you money?

Find out if Budget Insurance really offer the best value for money for UK life insurance customers and how their policies work

A photo of Dom Limberg, the author

By Dom Limberg

Published on: 20 December 2023

14 min read

Budget life insurance – does it really save you money?

With a name like Budget, you’d assume that Budget Insurance’s life insurance policies will be cheap, cheerful and easily available.

While there is some truth to this, there are features of how Budget Insurance operates online that are incredibly frustrating for some consumers. I’m not saying their policies are bad, but there is limited information available online which makes it trickier for consumers to get the full picture.

I’m explaining all the available information about Budget life insurance, to give you the answers to the main questions on many UK consumer’s minds. As a life insurance company that claims proudly to be a ‘budget’ option, do they actually save you money?

It’s also important to consider the quality of Budget life insurance and if it’s worth spending slightly more to go with another life insurance provider. Life insurance is something that will protect your family financially for years, so it’s best to consider all your options carefully before making any decisions.

QUICK SUMMARY – Budget life insurance – does it really save you money?

Here’s some of the main things that you need to know about Budget life insurance, wrapped up in a quick list of pros and cons. Budget life insurance will be a great option for some customers, but others may prefer another provider – it all comes down to personal preference.

  • Pro – Budget life insurance offers two simple choices for cover (level term and decreasing term life insurance), so if you want a basic low cost policy they may be a good option.
  • Con – The Budget Insurance website is difficult to navigate and contains limited information about their life insurance policies and how basic things like complaints work.
  • Pro – Budget Insurance policies are generally cheap and so can be a good option for customers who don’t want to spend a lot but still want financial protection.
  • Con – The maximum amount of cover you can get is limited to £750,000 which is high, but higher options are available with other insurers.
  • The simplest way to work out if a life insurance provider is your best option is to compare their policies and pricing with other insurers. If you’re not sure where to start, it can often be helpful to talk to a life insurance expert who can do this for you.

It’s hard to define what ‘good’ life insurance is, as every person will want different things from their policy. The main things to consider before buying a new life insurance policy would be:

  • Does the policy meet the level of cover you need?
  • If you want extra benefits, are these included in the policies?
  • What do current customers think of the insurer and their policies?
  • Has the insurer won industry awards or ratings that can indicate the polices are good quality?
  • Is the life insurance policy affordable for you longer term?

Budget life insurance is a pretty affordable option for life cover, with average prices ranging from around £4.50 – £25 per month for a non-smoker. People who smoke will pay slightly more but even those rates are reasonable compared to many other insurers with a maximum of around £60 per month on average.

Budget do include some extra benefits within their policies such as terminal illness cover and free counselling services – but if you want a policy with all the bells and whistles, other insurers may be able to offer more. Some insurance providers like Vitality provide a comprehensive rewards and benefits scheme which are miles beyond what Budget offer, though these policies will be more expensive.

Budget Insurance is also generally well rated by customers with many online reviews on sites like TrustPilot and Reviews.io noting their good customer service and simple and easy to understand policies.

Budget life insurance policies are designed to provide cover and pay out in the event of your death (or terminal illness). Budget Insurance only provide two options for life insurance policies which are:

  • Level term life insurance – The amount of cover is ‘level’ for the whole policy term and the amount the policy would pay out never changes
  • Decreasing life insurance – The amount of cover gets lower during the course of the policy, as it is designed to protect a repayment mortgage

While there are only two choices, the policies available are the two most popular types of life insurance to buy in the UK. You can also buy critical illness insurance to add onto your life cover, which would pay out if you were diagnosed with a serious illness.

Something that is important to note is that Budget Insurance won’t be the best option for ‘non-standard’ cover e.g. life insurance for people with dangerous jobs or medical conditions. They can only provide basic policies and are likely to decline more complicated applications, so it’s generally better to speak to a specialist in this situation.

Budget Insurance is a company which works well for specific types of life insurance customers. Some people will find that these low cost policies offer good value for money based on what they need from their insurance cover.

However, it’s worth noting that the level of cover is a bit basic compared to some other insurance providers – though they do at least provide free terminal illness cover.

Additionally, their policies lack some standard benefits that many insurers typically include, such as online GP access. While this may not be enough to put you off Budget Insurance (and I’m not trying to suggest it should), you might wish to look at some other providers if you want more benefits added on.

It’s absolutely your call whether you choose Budget Insurance for your life insurance or opt for another provider to protect your home and loved ones.

There are some definite benefits to Budget policies though that you might find appealing. Some of the popular reasons customers have chosen to buy Budget life insurance include:

  • Free terminal illness cover is included as standard (pays out if you are diagnosed with having 12 months or less left to live)
  • Free legal advice and Wills and Trusts services to help with end of life planning
  • Choice of single or joint cover to protect your whole household
  • Positive online reviews from past and current customers

Note: You shouldn’t be drawn in completely by extra benefits or features and should always make sure the base level of cover is right for you and is affordable for your situation.

Life insurance policies act as a financial safety net for the people that you care about and will pay out a cash lump sum in the event of your death. This situation is admittedly not something people want to think about, but having a plan in place something that can make a huge difference in the future.

The money from a life insurance pay out is most often used to cover key expenses such as mortgage repayments or funeral costs.

Budget life insurance policies won’t work any differently to those sold by big companies like Aviva or Legal & General. Once you have applied and had your application approved, your cover will begin. You will then be protected until the end of your policy term unless you cancel your cover or stop paying.

You don’t necessarily need Budget life insurance specifically and in fact you may not want life insurance at all. Everyone has different views on whether life insurance is worth the money, but I’d say generally it is.

Life insurance provides some extra financial security to the people you care about in the event of your death, which is something you can’t really put a price on. Of course, cost is normally a big concern for people who do want to buy life insurance and Budget tends to be one of the cheapest options on the market.

Note: The cheapest policy won’t automatically be the best one and it’s always better to have the right level of cover even if this means paying slightly more. If you’re not sure what policy or level of cover is right for you, it can be helpful to get advice from a life insurance specialist.

Budget Insurance is owned by the BGL Group which also owns various other insurance and insurance related businesses in the UK. So, while they give the appearance of a small independent company, they do have a lot of power and backing behind them.

If the name BGL Group sounds familiar, it’s probably because they either founded or partner with businesses like Beagle Street and Virgin Money for their life insurance policies. And if this wasn’t enough, BGL are also the brains behind popular online price comparison site Comparethemarket.com.

You may be interested to know that Budget Insurance policies are underwritten by Scottish Friendly Assurance Society. It’s quite common for smaller insurance companies to have the backing of larger ones, like Scottish Friendly. It’s just part of the usual setup and nothing to be overly worried about.

Ultimately, whether Budget Insurance are a ‘good option’ for cover will be an entirely personal decision, but I could see these policies working well for someone who wants basic, affordable life insurance.

Budget Insurance is a company which sells various types of insurance, but it’s important to note they operate as an aggregator rather than a traditional insurer. This is where you will fill in a form and receive the lowest quotes found by Budget, which makes sense as BGL Group who owns Budget also owns Comparethemarket.com.

Their options for types of cover are more limited compared to bigger insurance companies, though they do sell critical illness insurance as an extra option alongside their life cover.

Critical illness cover (or critical illness insurance) is a policy that not everyone will know about, and it’s often sold alongside life insurance policies.

These policies are so useful, as they will pay out a cash lump sum to help support you if you are diagnosed with a serious illness – if it’s covered in your policy terms and conditions.

Even though Budget Insurance isn’t a massive insurance company, they do sell critical illness cover as well as life insurance. If you’re thinking it might be something you would like to have, there a few key things you will need to know:

  • You can only buy Budget Insurance critical illness insurance as an add on to a Budget life insurance policy
  • You will only be able to claim for conditions which are covered by your policy (Budget Insurance pays out for 22 specified medical conditions)
  • Any condition you claim for needs to meet the exact description in your policy documents, or your claim won’t be approved

There are 3 types of critical illness cover to buy from Budget, so you should think carefully about which one would work best for you.

  • Life Insurance with Critical Illness: This policy is a two-in-one deal – it provides cover in case of your death or a diagnosis of a critical or terminal illness (cover ends once a claim has been paid).
  • Additional Critical Illness Cover: Similar to the Life Insurance with Critical Illness policy, but with more cover – your life insurance continues even after a critical illness claim has been paid out.
  • Children’s Critical Illness Cover (Childhood Critical Illness): You can add this to your critical illness policy, and it pays out either £25,000 or 25% of your cover amount (sum assured) if your child is diagnosed with a critical illness.

It can be more complicated to compare critical illness cover policies, because the features and benefits vary so much between providers. If you need some extra guidance, it’s worth asking a critical illness insurance expert if Budget is your best option or if another provider would be better.

How many critical illnesses do Budget insurance cover?

Budget Insurance is on the lower end of the scale when it comes to how much critical illness cover you get. It does pay out for all of the main reasons for claims though (cancer, heart attack, stroke etc.). If you want a basic policy that will protect you for these conditions, then Budget Insurance could be worth considering.

However they only pay out for 22 conditions, so if you want more comprehensive cover another company may be a better option. Standard UK insurers will cover anywhere between 25 – 150+ conditions based on the level of cover you choose.

This is a full list of all the conditions that you can claim for with Budget Insurance’s critical illness cover policies:

  • Alzheimer’s disease (with permanent symptoms)
  • Aorta graft surgery (for disease or trauma)
  • Benign brain tumour (with permanent symptoms)
  • Blindness (permanent and irreversible)
  • Cancer (not including less advanced cases)
  • Coma (with permanent symptoms)
  • Coronary artery bypass grafts (with surgery)
  • Deafness (permanent and irreversible)
  • Heart attack
  • Heart valve replacement or repair (with surgery)
  • HIV if caught in the UK from a blood transfusion, physical assault or at work in an eligible occupation (emergency services, medical professional or armed forces)
  • Kidney failure (which requires permanent dialysis)
  • Loss of hands or feet (permanent physical severance)
  • Loss of speech (permanent and irreversible)
  • Major organ transplant (from another donor)
  • Motor neurone disease (with permanent symptoms)
  • Multiple sclerosis (with current symptoms)
  • Paralysis of limbs (total and irreversible)
  • Parkinson’s disease (with permanent symptoms)
  • Stroke
  • Third degree burns (covers 20% of the surface area of either the face or body)
  • Traumatic brain injury (with permanent symptoms)

One of the first thoughts when reviewing an insurance company like Budget, is whether their policies live up to the ‘budget’ name. Basically, whether or not you will save money by choosing to buy a policy through Budget Insurance compared to another provider.

While checking quotes for applicants of multiple ages, smoker statuses and individual or joint cover, Budget was one of the lowest cost options most of the time. The others that had consistently similar pricing were Beagle Street and Virgin Money, which makes sense as they are all part of the same insurance group (BGL Group).

After doing some digging and multiple searches, I found that Budget life insurance policies cost in the range of £4.50 – £60 per month on average depending on the type of policy chosen. Of course, there are many factors that can affect policy pricing so not everyone will pay the same price per month. Some of the main factors that can cause prices to be higher or lower include:

  • Your age when you apply
  • How much cover you need
  • Your policy term (number of years)
  • If you want joint or single cover

Note: All quotes searched for were based on an example person with no medical conditions who wanted £150,000 worth of cover for 20 years.

Is Budget life insurance worth the price?

Everyone wants the best value for money from their life insurance policy and I’d say Budget does offer fair value for the price you pay.

While they don’t provide countless freebies or additional options for cover, the level of life cover provided is decent and the pricing is lower than most other insurers.

Of course, if you wanted to buy a more expensive policy elsewhere, you might get more for your money but the choice of whether to do this is entirely up to you.

Knowing how to reach out to your insurance provider is handy if you ever have questions or run into any issues with your policy. Budget Insurance has a couple of contact numbers, and you’ll find the main details below.

Budget Insurance contact details

Tel. 0330 018 8806

Tel. 0330 018 8692

Email – contact@budgetlifeinsurance.com

Opening hours – Monday to Friday 8am – 8pm / Saturday and Bank Holidays 9am – 5pm

If you find yourself needing to make a claim on a Budget life insurance policy for a loved one, the first step is to get in touch directly with Budget Insurance. They handle claims over the phone, and once you start off the process, they’ll send you a claims form to fill out and send back.

Before you make the call, Budget Insurance recommends having these details ready:

  • The policy number (If you don’t have this, they’ll also accept the policy holder’s name and date of birth)
  • Proof of permission to claim (especially if claiming for critical illness on behalf of a family member)

Like most insurers, Budget Insurance aims to streamline the life insurance claims process, understanding that it’s a challenging time for you when you’re reaching out to claim.

Is it easy to claim on Budget life insurance?

I’d say that while some information on Budget’s site is difficult to access, the claims information is quite clearly displayed. There is a button in the top right hand corner to click which takes you through to their claims page.

Once you are there, you can select whether you are claiming for motor, home or life insurance so you get the right information and contact details. You can then call their claims helpline to start the claim and the process seems straightforward.

Does Budget life insurance pay out?

People are wary of life insurance, as it comes into the overall ‘insurance umbrella’ where claims sometimes go unpaid. Unlike policies like car insurance for example, life insurance claims will pay out in most cases (around 98% of the time).

According to the Budget Insurance website, they pay out on 99.1% of life insurance claims on average. This is based on 2021 figures though, so the current average may be slightly higher or lower than this.

Budget Insurance aren’t allowed to mislead about things like claims statistics, as they are heavily regulated by organisations like the Financial Conduct Authority (FCA).

While Budget Insurance might consider applicants with certain less serious health issues, it’s important to note that they generally prefer not to accept applications from people with medical conditions.

This can be seen as a drawback of their simple approach and emphasis on quick application processes since they may not take the time to request additional medical information. Unlike other providers who might ask for a GP report and still offer cover, Budget Insurance tends to stop the process at this stage and decline your application.

This is understandably frustrating especially for consumers with well managed and less serious conditions. It can be harder to find a fairly priced policy if you have health issues, which is why many people in this situation find it useful to get help from an expert.

A pre-existing conditions life insurance expert can provide valuable insights and help you navigate through different insurers, guiding you toward the best choice for your unique situation.

ProCon
Good customer reviews and ratings from previous and current customersDifficult to find the information you need on the Budget Insurance website
Simple options for life insurance policiesDoesn’t work well for customers with pre-existing medical conditions
Extra benefits included free for customersCan only buy term life insurance policies (can’t buy whole life policies or over 50s)

In short, it’s not easy to complain about Budget life insurance – or at least it’s not easy to get the information you need to make a complaint.

When you go onto Budget’s website there is a section there dedicated to complaints with a drop-down menu to give answers to frequently asked questions. However, none of these menu items actually open making the information unavailable for consumers!

Considering these menu items are clearly referring to important information, it’s so frustrating that the information isn’t accessible. If you’re a current Budget life insurance customer, there should be some information about how to complain within your policy documents.

After looking thoroughly through the Budget Insurance website, I did eventually find the correct contact details for Budget Insurance complaints which can be found below.

Tel. 0330 018 8806

Email – complaints@budgetinsurance.com

Opening hours: 8am – 8pm Monday to Friday, 9am – 5pm Saturdays and Bank Holidays

Post:

The Customer Relations Manager,
Budget Life Insurance Team,
Pegasus House,
Orton Southgate,
Peterborough,
PE2 6YS

Every consumer has a right to complain if they are unhappy with their insurance provider or policy, so it’s ridiculous that the process isn’t clear at all. Another option to complain would be by contacting the Financial Ombudsman Service (FOS) for free and impartial advice.

Financial Ombudsman Service contact details

Tel. 0800 023 4567 or 0300 123 9123

Tel. 0207 964 0500 (overseas)

Email – complaint.info@financial-ombudsman.org.uk

A lot of consumers wrongly believe that once they buy life insurance they are tied into that provider and policy indefinitely. It’s important to know that you can cancel life insurance whenever you want to and for any reason.

If you need to (or want to) cancel your Budget life insurance or critical illness policy, you just need to contact them and let their team know. The only other thing to do then would be to contact your Bank or Building Society to cancel your direct debit.

Tel. 0330 018 8806

Email – life@budgetinsurance.com

Opening hours: 8am – 8pm Monday to Friday, 9am – 5pm Saturdays and Bank Holidays

I’d always recommend reading reviews for businesses like Budget Insurance before you think seriously about buying a policy from them. Independent customer reviews can highlight any glaring issues with the policies or customer service that might make you consider looking elsewhere for your cover.

Unlike some companies, Budget Insurance collects reviews across a couple of websites, so it’s worth checking both for the full picture. You can look on TrustPilot and Reviews.io for the latest customer reviews for Budget Insurance, though these reviews will be for all products and not specific to life insurance only.

Budget Insurance TrustPilot Reviews

Budget Insurance (TrustPilot score) – 4.4 out of 5.0 stars (with 13,648 reviews)

% of 5 star reviews – 72% of reviews rated Budget Insurance 5.0 out of 5.0 stars

% of 4 star reviews – 15% of reviews rated Budget Insurance 4.0 out of 5.0 stars

% of 3 star reviews – 3% of reviews rated Budget Insurance 3.0 out of 5.0 stars

% of 2 star reviews – 2% of reviews rated Budget Insurance 2.0 out of 5.0 stars

% of 1 star reviews – 8% of reviews rated Budget Insurance 1.0 out of 5.0 stars

Budget Insurance Reviews.io Reviews

Budget Insurance (Reviews.io score) – 4.0 out of 5.0 stars (with 1,402 reviews)

The Reviews.io website states that 75% of reviewers said that they would recommend Budget Insurance and the customer service was rated 3.9 out of 5.0 stars.

While customer reviews aren’t everything and you should certainly consider other factors, it’s positive to see that Budget is generally scored highly by their customers online.

Budget Insurance is also rated 3 stars by defaqto for their life insurance products which means their policies are ‘adequate with a standard level of features and benefits’. You can check the defaqto score for any UK insurance product on the defaqto website, with a handy search bar to look up the insurer by name.

Note: All the ratings displayed for Budget Insurance are accurate as of 19/12/2023 but may change over time as more customers leave reviews.

If you think Budget life insurance will work well for the cover you need, you have a few options for how to buy your policy. You can either:

  • Contact Budget Insurance directly over the phone or online to get a quote
  • Use a price comparison site to compare quotes
  • Compare quotes from multiple providers with the help of a life insurance expert

Many consumers find it helpful to talk to a life insurance broker before applying for cover and honestly this is usually the option that works out cheapest. While you can compare quotes through sites like MoneySupermarket or GoCompare, these websites will normally charge more and the same goes for applying with a provider directly.

If you need help finding the right life insurance, you can speak to our trusted life insurance partner on 0800 009 6559 or by clicking here.

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