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How much should I pay for life insurance?

We're looking at how much you should expect to pay for your life cover - and how you can save!

A photo of Grace Lynch, the author

By Grace Lynch

Published on: 19 March 2022

4 min read

How much should I pay for life insurance? 

Life insurance is a great way of ensuring you have financial protection in place for your family, in the event you pass away. But with the UK deep into a cost-of-living crisis, you might wonder whether there are ways you can save on your cover and if you are paying too much.  

No one wants to find out they have been paying more than they should, and we are here to help. On this page, we are covering how much you should expect to pay for your cover and ways you could save. 

How much should I expect to pay for life insurance? 

This is a tricky question as pricing will vary depending on your health and lifestyle. Generally, the healthier you are the less you will pay. You will also pay less the younger you are, so it is a good idea to take out a policy sooner rather than later.  

Most people in their 20s will think it isn’t worth taking out cover yet or it is a monthly expense they can do without. While this may be true short term, taking out cover earlier in life can mean significant savings. This is even compared to if they get a policy even 5 or 10 years down the line, as every birthday will push the price up slightly. 

How much should I pay for life insurance per month? 

Don’t be fooled by adverts and websites that claim you can get life insurance for as little as £5 a month. This might be true for some people, but the likelihood is most people will need to set their budget for their monthly premiums a little higher.  

The amount you pay every month will vary depending on the type of life insurance cover you choose, how long you want to be covered for and more. Other things that can affect how much you will pay include: 

  • How old you are  
  • If you smoke  
  • If you have any medical conditions 
  • If you have a high risk job or dangerous hobby  
  • Your general lifestyle (if you exercise regularly etc) 

Medical conditions in particular can cause prices to be slightly higher, but some insurers will be better suited to this type of cover. If you aren’t sure where to look for your best options, it could be worth speaking to an insurance advisor who can help point you in the right direction. 

How much should I pay for term life insurance? 

There are two main types of cover when buying life insurance: term life insurance and whole life or ‘whole of life cover’.  

Term life insurance is a policy that covers a set number of years or life insurance ‘term’. You can get:

  • Level term life insurance (the amount you are covered for never changes)
  • Decreasing term life insurance (your cover amount decreases over the course of your policy, usually in line with repaying a mortgage)

These are usually a lower cost option than whole life cover, so could be a better choice if you have a tighter budget.  

Even within term policies the price you pay can be further lowered, if you assess how much cover you need before you apply. Things it can be worth considering include: 

  • How much cover (£s) you need (could you go any lower than this amount?) 
  • Do you have any children? How old are they? 
  • Do you have any large expenses that will need to be covered? E.g. mortgage 
  • How long do you want your policy term to be? (a shorter term will generally be lower priced) 
  • Do you have any debts your family would need to repay? 

How much should I pay for whole life insurance? 

Whole life insurance or ‘whole of life’ cover does what it says on the tin. It is a policy that will cover you for your entire life – provided you continue to pay your premiums each month! 

This can be a great option in some cases, as you don’t need to worry about finding a new policy and facing higher costs later on. Once you have a whole life policy in place, your monthly cost is locked in and won’t change.  

How to save on your life insurance 

Everyone loves a bargain, and sometimes you might be able to find the cover you need for a fraction of the cost.  

There are several ways you could save money on life insurance premiums (monthly payments). This includes:

  • Comparing life insurance quotes across a few different providers: Every insurer will have slightly different pricing. Even if you think you have found a good deal with one, it is still worth checking what is on offer elsewhere.  
  • Review your policy: You can save on the cost of life insurance even with an existing life insurance policy in place. Believe it or not, it is possible to review an existing policy and you might find you have the potential to save a few £s.  
  • Consider how much cover you really need: Often you can save significantly by simply reducing the amount of £s you are covered for or the length of time you are covered for.
  • Switch to a new insurance provider: Sometimes just switching to a different life insurance company can lead to big savings, and it is absolutely possible to cancel your policy and take out a new lower priced one. 

Note: You can always review or even cancel your life insurance cover at any point. Be aware that life insurance prices will increase as you get older, so make sure that you can definitely get a better price somewhere else before cancelling. 

You can speak directly to your insurance company to sort this, or speak to an independent insurance expert, who will be able to assess whether you could get a better deal. 

You can also learn more about how to save on your cover in our guide ‘How can I reduce my life insurance premiums?’

Resources

Citizen’s Advice – Work out your budget

Finder.com – Life insurance statistics

Statista – Life insurance industry in the UK

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