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Life Insurance Comparison

Life insurance can give you peace of mind that your loved ones will be protected financially if you pass away while cover is in place. Whether that’s through paying off the mortgage, or providing a lump sum to help cover financial gaps, it’s vital to compare life insurance and find the right cover for you.

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Life insurance could be worth considering if others who rely on your income would find it difficult to cope financially if you weren’t around. Depending on your age, lifestyle and health, you may find life insurance quotes that will provide cover for only a few pounds a month. Whether you’re ready to compare life insurance right now, or want to learn which type of life cover might be right for you, everything you need is here.

Compare Life Insurance

NerdWallet has partnered with Lifesearch to provide life insurance quotes from the UK’s leading providers, including:

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What is life insurance?

Life insurance is designed to pay out a lump sum to your loved ones if you die while the policy is in place. The aim is to ensure that your beneficiaries – those you want the payout to go to – will have money that might make their life a little easier financially if you’re not around. 

Often life insurance payouts are used to pay off a mortgage or help cover living expenses that will still need to be paid if you’re not there. To this extent, you may be able to find life cover that offers the option of paying out a regular income rather than a lump sum. There are also some life policies which will pay out early on the diagnosis of a terminal illness. 

What are the benefits of having life insurance?

The reasons for taking out life insurance mainly revolve around the financial safety net you can provide for family and other loved ones if the worst were to happen. In this respect, a life insurance payout can help:

» MORE: 10 benefits of life insurance explained

How does life insurance work?

How life insurance works can be broken down into four main steps:

1. Choosing your cover

This involves deciding the cover amount your beneficiaries could receive, and the length of time, or term, you want the policy to last – typically this could be anywhere between 12 months and 50 years. You also choose the particular type of life cover you want. 

2. Paying premiums

Once your policy is set up, you’ll pay a regular premium to your insurer  – this could be monthly, quarterly or annually. If you miss any payments, your policy could lapse, meaning there’d be no payout if you die.

3. Making a claim

If you pass away during the term of your policy, your beneficiaries will need to contact your insurer and make a claim on the policy.

4. Payout to loved ones

If your insurer approves the claim, a payout is made to your beneficiaries, and the policy ends. Depending on the type of cover, and when you die, the payout amount could change. With a level term policy, the payout amount is always the same; with decreasing term cover, the payout reduces as you move further into the policy term. 

It’s important to know that if you live longer than the policy term you choose on a typical life insurance policy, neither you nor your beneficiaries will get a payout, and you won’t get your premiums back. Generally, life insurance only pays out if you die during the term you’re covered for. 

One exception may be if your policy includes terminal illness cover. If a claim is accepted in these circumstances, a payout could be made while you’re alive. Note there is also a type of cover called whole of life insurance, which has no set term, and is designed to pay out whenever you die.

» MORE: What are life insurance premiums?

What are the different types of life insurance?

There are two main types of life insurance. Which one you need usually depends on your finances, circumstances and the needs of your loved ones.

Level term life assurance

With level term life insurance, if you die within the policy term, the payout to your beneficiaries will always be the amount that you agreed at the outset. You decide the cover amount and term when taking out the policy. The higher the payout, and the longer the term, the more expensive you can expect your premiums to be. Level term insurance is useful if you have a definite sum in mind that you want your loved ones to have. It could also be used to cover an interest-only mortgage, where the mortgage amount you borrow remains the same until your mortgage ends, and it must be paid off.

Decreasing term insurance

With decreasing term life insurance, the payout to your beneficiaries if you die during the policy term gradually decreases as you get further into the term. You still decide the initial cover amount and term at outset, and it is made clear how much the payout would be at various points throughout the term. Your premiums stay the same, but they may be cheaper than other types of life insurance due to the cover reducing over time. Because of how it works, decreasing term insurance is often used to cover a repayment mortgage or other debt where the amount owed should decrease over time. It is also often called mortgage life insurance as a result.

Level term vs decreasing term: Pros and cons

Level term insuranceDecreasing term insurance
ProsConsProsCons
You know for certain the amount that could be paid outPremiums likely to be higher than for decreasing termLikely to be cheaper than level term insurancePayout amount reduces over time
Peace of mind your loved ones have a financial safety netEffect of inflation could reduce real value of payout over timeCan be used specifically to ensure mortgage or debts will be cleared if you dieMay not be any funds left over for other purposes if policy set up to cover mortgage

Other types of life cover

Increasing cover

Increasing cover is designed to protect the payout amount against inflation, and maintain its real value as the cost of living rises. The cover amount may rise in line with the rate of inflation or by a fixed amount each year, though your premiums will also rise to reflect that (usually up to a maximum amount).

Whole of life insurance

Also known as life assurance, whole of life cover lasts your entire lifetime. However, because it guarantees to pay out whenever you die (assuming all premiums are paid), it’s usually more expensive than term life insurance, where cover lasts a set period of time.  

Over 50s life insurance

Aimed at adults aged 50 to 85, over 50s life insurance pays out regardless of when you die. You’re guaranteed to be accepted and medical checks aren’t required. However, payouts may be lower than on standard life insurance, which could make it more expensive as a result. 

Joint life insurance

With joint life insurance, one application and premium covers two people. Most joint policies are on a first death basis, meaning the surviving partner receives a payout when the other dies. It can work out cheaper than two separate policies, but joint cover will only pay out once. 

Critical illness cover

While not technically life insurance, critical illness cover (CIC) is often offered alongside life policies. As the name suggests, CIC pays out a lump sum if you have a qualifying illness or injury. 

» MORE: What are the different types of life insurance?

What does life insurance cover?

This will depend on the provider and the life insurance policy. Make sure you read the policy documents, so you’re clear on what is and isn’t included. If you’re in any doubt, check with the insurer and ask what the exclusions are.

What’s covered:

Life insurance usually pays out:

What’s not covered:

Life insurance won’t usually cover death resulting from:

» MORE: When doesn’t life insurance pay out?

How much does life insurance pay out?

The average payout from life insurance policies was £80,403 in 2023, according to the Association of British Insurers. However, how much your life insurance might pay out depends on the cover amount you agree when applying and the type of policy you have. 

With level term insurance, the payout amount is fixed at the outset and won’t change; with decreasing term insurance, an initial payment amount is agreed, but this will fall as you get further into the policy term. But larger payouts mean higher premiums.     

Do you need to take out life insurance?

You don’t have to take out life insurance. But if anyone depends on you financially, or if you share finances with anyone else, it can be a good idea. This is especially the case if you’re the main income provider in your household, so you can help reduce the financial impact on your partner, family or children when you die. But even if you share financial responsibilities, it could provide an invaluable safety net at a difficult time.

If you get a mortgage or a long-term loan, the lender may recommend that you consider life insurance to cover what you owe. This is so they know there would be the funds to pay off the remaining balance if you passed away.

» MORE: Do I need life insurance?

When should you take out life insurance?

There are typical milestones when people tend to think about taking out cover. These include buying a home, having children and marriage or civil partnership. That’s because these life events bring extra financial responsibilities. But there are lots of reasons why you might think it’s time, and not everyone gets around to sorting it out straight away.

As life changes, such as if you get a salary increase, have more children, or your relationship changes, you may want to adjust your cover after you’ve taken out a policy. This will make sure the cover still matches your needs.

It’s a good idea to speak to a financial adviser before you make this type of change, and whether you can do it depends on a few things. You can, however, have more than one life insurance policy if you need to take out separate, additional cover.

Who may not need life insurance?

Life insurance isn’t right for everyone, though. You might not feel it’s worthwhile if the following applies:

  • You’re single and there is nobody who depends on you financially.
  • You’re on a low income and may be eligible for state benefits.
  • Your partner earns enough to support themselves and any children you have.
  • You think your assets or savings will offer enough financial help when you pass away.
  • You have a death-in-service benefit with your employer that pays out if you die while you are their employee.

How much life insurance do I need?

The cover amount you need depends on what you’d like to cover and the premium you can afford. You may just want to make sure the mortgage is covered, so your family could pay it off or continue to make payments. Or you might want it to also be enough to pay wider costs and outgoings, or your lost income, so your family can keep up their standard of living.

Take your time and factor in costs such as what’s left to pay on your mortgage or your rent payments, or any outstanding debts. You may also want to include household bills, funeral costs, education fees and general family living expenses. Factor in any other policies you may already have, such as a death in service benefit through your employer, as well as the savings, assets and investments you may have.

» MORE: Does life insurance cover funeral costs?

How much is life insurance?

How much you’ll pay for life insurance depends on certain personal factors when you take out cover, as well as the type and terms of your policy. When an insurer is working out your life insurance premium, they’ll consider your:  

Front of mind should be getting the right level of cover for you and your family and making sure you can afford the monthly payments. You’ll be paying the premium for a number of years, so it needs to be a figure you’re comfortable with.

How to get cheaper life insurance

Generally, you’ll secure a cheaper life insurance premium if you:

There are also cover choices you can make that will affect the price of your premiums. For example, choosing decreasing rather than level cover, a single policy rather than a joint policy, and a shorter cover term. But it’s no good getting cheap life insurance if it doesn’t cover what you need it to cover. And not everyone is in a position to take out life insurance in their 20s or is in peak health.

When you get a life insurance quote, answer every question as accurately and honestly as you can. Otherwise, the insurer could refuse your application, increase your premium, cancel your policy, not pay the claim in full, or even not pay out.

How can you compare life insurance policies?

When you’re comparing life insurance quotes, it’s important to read the terms and conditions and policy documents. It’s crucial that you are clear about what is and isn’t covered by your policy, and to check if it has the right level of cover for you, before you buy.

Some providers offer incentives, such as gift cards, vouchers and health tools. These can be useful, but a life insurance policy is a big commitment over many years. Look beyond such extras when deciding whether a policy is right for you.   

Life Insurance FAQs

Am I eligible for life insurance?

This will depend on the insurer and the type of life insurance policy you choose, though you will usually need to be a UK resident and at least 18 years old. Maximum ages will depend on the insurer and the policy, though it could be possible to get life insurance in your late 70s and beyond. 

Do you need life insurance to get a mortgage?

There’s no legal requirement to get life insurance when you have a mortgage, though your mortgage provider might recommend or require that you do. Having life insurance to cover your mortgage means that if you die while you’re covered by the policy, your family would be able to pay off the debt, or keep up with repayments and stay in their home.
You don’t have to use the insurer your mortgage provider recommends. It’s worth getting quotes from other insurers, so you get a competitive price for the cover you need.

When is a good time to get life insurance?

Often people will think about getting life insurance when getting married, buying a home, or having children. If there is someone that relies on you financially, life cover may be worth considering. It’s also a good idea to get life insurance when you’re younger, as it’s likely to be cheaper. 

How long should I get life insurance for?

How long you get life insurance for depends on how you want a payout to be used, your personal circumstances and the needs of your loved ones.   

If you want to ensure your mortgage is paid off, it may make sense to arrange cover for the duration of your mortgage term. Alternatively, you may want to protect your family until you know your children will be old enough to work and less reliant on you financially.   

Can you have multiple life insurance policies?

Yes, you can have more than one life insurance policy if you want to. This may be useful if, for example, you need more cover later on, such as if you get a mortgage or pay increase, or if you have some cover provided by your employer but want more.

You don’t have to take additional policies out with the same insurer. Some life insurance companies let you adjust your cover amount without having to take out another policy. Just check that this isn’t more expensive overall than finding a new policy for the extra amount.

» MORE: Can you have more than one life insurance policy?

What is the best life insurance to have? 

The best life insurance for you will depend on your intentions for the possible payout and your circumstances right now. Different types of cover can be used in different situations. Decreasing term insurance may be worth considering if you want to consider a mortgage, but level may be better if you want to leave a specific amount.

What is the average cost of life insurance per month in the UK?

The average cost of life insurance in the UK is around £34 per month, according to life insurance broker Reassured. However, how much life cover will cost you depends on factors such as your age, health, and lifestyle, as well as the policy type, term and amount of cover you want. In some instances, it may be possible to get life cover for as little as £4 pounds a month, or perhaps less. 

Why might a life insurance application be declined?

Insurers might decline a life insurance application for a few reasons. Some may refuse you life cover if you’ve had a certain illness in the past, or because of health and lifestyle issues you may have now. A dangerous job or extreme hobby could mean you’re considered too high risk as well. But different providers have different criteria, which means that if one insurer declines your application another might not.

Can you get life insurance with pre-existing conditions?

Yes, it is possible to get life insurance if you have a pre-existing medical condition. It may be that you get a policy that excludes that particular condition from the cover. This means the policy will only pay out if your death isn’t as a direct result of that condition. Alternatively, you may be able to get cover with the condition included, but it would probably cost you more.  
Depending on your age, you may be eligible for over 50s life insurance, which offers guaranteed acceptance and doesn’t require any medical checks.  

Do you need a medical to get life insurance?

It depends. Most people don’t need a medical examination to be accepted for a life insurance policy, particularly if you’re in good health. Sometimes an insurer will just ask for extra health information from you or a medical report from your GP, with your permission, or a nurse may give you a call to ask a few questions.

If you do need to have a medical examination – perhaps because you have a certain condition or have been refused life insurance in the past – it’s nothing to worry about. It doesn’t necessarily mean your application won’t be successful, though sometimes certain health conditions can mean an application is declined. Always be honest about your medical history, or your policy could be cancelled and no payout made if there’s a claim. 

If you’re taking out over 50s life insurance, the insurer won’t usually ask you medical questions or ask you to have a medical examination.

» MORE: Can you get life insurance with no medical?

Is life insurance more expensive for smokers? 

Life insurance premiums are higher if you smoke, because of the potential health implications that smoking can have. You must tell an insurer if you smoke.  

» MORE: Getting life insurance if you smoke

Can I extend my life insurance policy?

It may be possible to extend a life insurance policy you already have, but you’ll need to check with your insurer. Assuming you’re older, and your circumstances may have changed, the cost of your premiums could rise.  

What happens if I miss a life insurance payment? 

If you miss a life insurance premium payment, your insurer could cancel your cover or refuse to pay out if a claim is made. Let your insurer know if you think you’ll miss a payment. In some circumstances, they may allow you a payment holiday, and let you catch up on the missed payment. 

What is a waiver of premium for life insurance?

When taking out life insurance, you may have the option to add a waiver of premium benefit to your policy. This is an extra insurance that covers your premiums if illness or injury means you are unable to work for a certain period of time. Waiver of premium can only be added at the start of a policy and will increase the cost of your premiums. 

Is life insurance taxable? 

The lump sum payout from a life insurance policy is usually tax-free in itself – because it’s not classed as income, it means income tax does not apply. However, if your estate is liable for inheritance tax (IHT) after using all the different exemptions and allowances, the life insurance payout could be affected too.

If you put the life insurance policy in a trust, it can help protect the lump sum from IHT because it’s not part of your estate and has its own legal arrangement. The money can go direct to beneficiaries via the trustees, as instructed. This can be useful if you’re leaving money to young people, for example. It also usually means the money will be paid out quicker than the remaining estate.

Trusts can be a complicated area, and once your policy is in a trust it’s difficult to change it, so it can be worth taking financial and legal advice before going ahead.

» MORE: Do you pay tax on life insurance?

How do you make a claim on a life insurance policy?

To make a claim on a life insurance policy, you’ll need to contact the insurer the policy is with. If possible, you should have the policy details to hand. There’ll be forms to fill in, and it’s likely you’ll need to supply the insurer with a death certificate. The insurer will guide you through everything. 
It’s a good idea to tell your family if you have life insurance. Let them know the name of the provider and the type of policy it is, to help make the admin easier for them when the time comes.

How long does life insurance take to pay out? 

There’s no set time frame, and it will vary between insurers, but generally, you can expect a life insurance claim to be paid out within 30 to 60 days. However, it may be quicker or longer, depending on the circumstances, and the insurer receiving all of the paperwork and documents that it needs. A payout may be faster if the life policy is in trust.      

Does life insurance cover suicide? 

If someone takes their own life, most insurers have a clause stating they won’t pay out for suicide or self-inflicted injury within a certain period. Usually this is 12 or 24 months after the policy start date. After that, a claim for a death through suicide may be considered like any other claim when the policyholder dies.

How often should I review my life insurance policy?

It’s good practice to review your life insurance at least once a year. You may also want to revisit your cover following a major life event, such as becoming a parent or buying a property with someone else. 

Can you cancel a life insurance policy?

It’s possible to cancel a life insurance policy at any time. If you want to cancel a policy you’ve just bought, you’ll automatically have a 30-day cooling off period in which to do so. You should get a refund of any premiums you’ve already paid, but there may be fees for cancelling. If your cover has been in place longer, you won’t usually get your money back if you cancel.

Can you cash in a life insurance policy?

Term life insurance policies have no cash value. You pay premiums and if you outlive your policy, you get no payout and you don’t get your premiums back.

Some whole of life policies let you cash in, or surrender, all or part of your cover while you’re alive. This basically means cancelling the policy and you, the policyholder, receiving the sum rather than your beneficiaries when you die. This is a big step, so talk to a financial adviser if you are considering it.

Also be aware that you may have to pay charges, and it’s possible that your policy’s value could be less than you’ve paid in premiums when you surrender it. If the surrender value is more than total premiums paid, this can have tax implications. So again, it can be worth getting advice before making this decision.

What’s the difference between life insurance and life assurance? 

Life insurance is cover that lasts for a set period of time or term, while life assurance is cover that remains in place for your lifetime.  

» MORE: Life assurance vs life assurance

How are life insurance and income protection different?

Life insurance provides a payout to your loved ones if you die during the policy term, whereas income protection insurance provides you with a regular income if you’re unable to work for a certain period of time due to illness or injury.

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