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How can I reduce my life insurance premiums?

Read some of our top tips on how to reduce your monthly insurance premiums

A photo of Daniel Sharpe-Szunko, the author

By Daniel Sharpe-Szunko

Published on: 11 October 2021

6 min read

How can I reduce my life insurance premiums?

One of the most common questions about life insurance is how to reduce premiums to make it more affordable. There is no doubt that life insurance is important, especially for families and for homeowners. 

Most people will only buy life insurance several times in their lifetime so it’s common for people to have lots of questions. You should also understand that life cover can be flexible and there are lots of ways to save money and reduce premiums. 

In this section, we get advice from our team of life insurance experts who are some of the top experts in the UK. 

Top tips to reduce your life insurance premiums 

There are several main ways that you can reduce your life insurance premiums when you apply for a new policy or review an existing policy. 

Most people don’t know enough about how life insurance works because it’s not exactly something that you look at regularly. You can save money on your life insurance by following some simple steps, but you should also make sure that premiums are affordable now and in the future. 

Here are several top tips to reduce your life insurance premiums: 

  1. Apply to the right insurer offering the lowest premiums 
  2. Only take out the level of cover that you need 
  3. Don’t take cover for longer terms if it’s not affordable 
  4. Make sure that your premiums are based on your health and any other risks 
  5. Consider a single or joint life insurance cover 
  6. Speak to a life insurance expert or specialist 
  7. Apply for cover when you are younger and don’t put it off 
  8. Check to see whether you have some cover with your job 
  9. DON’T RUSH IT… 

Most people will search on the internet to find life insurance and you’ll be presented with thousands of different options and types of insurance. You should do your research before you jump in to anything and make sure that you have made the right decision. 

How are life insurance premiums calculated? 

There are some standard calculations that will show you how life insurance premiums are calculated, and most insurers are the same. The main difference is their pricing structure and their underwriting criteria. 

The main elements for how are life insurance premiums calculated are: 

  • Date of birth (how old are you?) *life insurance premiums will increase as you get older 
  • Smoker status *life insurance premiums for smokers can be up to double what they are for non-smokers because of the related health risks to smoking 
  • Lifestyle * there are several lifestyle factors that will be included such as your BMI, occupation, alcohol consumption, drug use, and sports 
  • Health and medical history *any pre-existing medical conditions and health issues will often have an impact on your life insurance premiums 

Once you’ve given your details and disclosed any health and lifestyle information, you should then get a quote for life insurance. If you’ve got a slightly more serious or chronic pre-existing medical condition then you might also need a medical or GP report. 

Learn more about how to save money on your life insurance with health issues in our guide ‘Save on medical conditions life insurance’.

Which are the cheapest life insurance companies? 

There are a number of major brands and well-known providers offering life insurance to people in the UK. Finding the cheapest life insurance companies can sometimes be difficult, especially for people with pre-existing medical conditions, dangerous jobs, or hazardous activities. 

When you search for life insurance you will often be presented with adverts from some of the main top insurance companies, such as: 

There are also a number of specialist insurance companies who may be better for you if you are classed as high risk. 

What is the right amount of life insurance? 

One of the most important and common questions is what is the right amount of life insurance and cover. 

In reality, you can take out life insurance for almost any amount so there isn’t really a maximum amount of cover. If you’re taking out a larger amount of cover (sum assured) then you may go through financial underwriting, this is to make sure that the amount of cover is reasonable. 

You should consider the following when you apply for life insurance to see how much cover you need:

  1. Do you have a mortgage? (how much is left to pay?) 
  2. How many children do you have and how old are they?
  3. What is your annual salary and any other income? 
  4. Do you have any other major debts? 
  5. Is the cover for personal or business protection? 
  6. Why do you need life insurance? 

The truth is that there is no right or wrong answer to what is the right amount of life insurance. You should also consider how much is affordable for you now and in the future to make sure that the cover is right. 

Which is the right type of life insurance? 

There are several different types of life insurance and you should consider your circumstances to see what is best for you. 

The most common types of life insurance are: 

  • Family life insurance (level term assurance) is the most common type of life cover because it is used specifically to protect your family and loved ones if you die. You will receive a cash lump sum in the event of death which is level throughout the term of your life insurance policy 
  • Mortgage life insurance (decreasing term assurance) is specifically designed to cover a reducing mortgage balance over the remaining term of your mortgage. It is also specifically to be used for a capital and repayment mortgage 
  • Family income benefit is a slightly more rare type of life insurance but can be very useful to make cover more affordable. Premiums for this type of cover can be lower to replace a lost income from the household 
  • Whole of Life insurance is the most expensive type of life insurance because its guaranteed to pay out on death, regardless of when that is. Most people will use this type of cover specifically for inheritance tax (IHT) planning or leaving a legacy 

All types of life insurance pay out a lump sum when a person dies to help their family cover bills and expenses such as mortgage payments, funeral costs and more.

Should I take out joint or single life insurance? 

There are a few different schools of thought on this subject and different advisors will tell you different things generally. The reality is that it is based on what you can afford and whether you really need two single policies or will joint cover be enough. 

The main points to remember is that joint life cover will provide life insurance for two lives for less than two single policies. If you can afford to take out 2 single life insurance policies then you should consider this option, because you’re getting more cover. 

Premiums for joint life insurance are generally 30% less than two single life insurance policies. 

If you can however afford to pay for two single life insurance policies then you should consider this option. Your policy could pay out twice or double if you take out 2 single life insurance policies so it could be beneficial. 

You should also remember that you can cancel life insurance at any time so you might not need one policy but decide to keep the other. Two single policies gives you the flexibility to be able to do this but joint life insurance doesn’t have this option. 

Note: There are two forms of joint life insurance policy. These are first death (the policy pays out when the first partner dies and cover ends) or second death (where the policy does not pay out until both partners pass away). You should choose whichever feels most suitable for you.


Scottish Business News – Interesting facts and figures about life insurance in the UK – Life insurance statistics

Statista – Life insurance industry in the UK: Statistics & Facts

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