Buying life insurance cover is a great way to protect the people you love. We're all looking for an affordable policy, but with countless providers out there it can be hard to find the right plan, let alone for the right price.

In this guide, we'll be looking at cheap life insurance and how you can keep premium costs down. But first, let's take a closer look at the types of life insurance available.

How does life insurance work?

Life insurance works by issuing a lump sum payment to your family if you die. This money can be used to support your loved ones with the cost of living when you no longer can. It can be used to cover household bills, funeral expenses, mortgage payments and other additional costs.

Once you are accepted for cover, you are required to pay a monthly premium to your insurance provider. Your monthly costs for cover depend on a number of factors, such as age, health and occupation. More importantly, the type of policy you choose can contribute to how much you pay for cover.

Compare Life Insurance quotes online...

Types of life insurance policies

The type of life insurance you choose depends on your circumstances, both health & financial related. There are a wide range of options when searching for life insurance, so here are some of the popular policy types you are bound to hear about:

Whole-of-life insurance

This type of policy can often be referred to as 'life assurance'. This policy lasts for your entire life, paying out a lump  sum once you have died. This is providing that you’ve kept up to date with your monthly payments.

This is usually the most expensive option for buying life insurance. However, you have the benefit of having a payout that’s guaranteed, no matter when you die.

Term insurance

Unlike whole-of-life, term policies cover you for a certain period of time or ‘term’ (i.e. 30 years). Though this offers a little more flexibility, if you survive the term there won't be a payout. Term insurance is an affordable option for life insurance. You can use it as a shorter term option as you may want to take out a different type of policy later down the line.

Term life insurance has three levels of cover:

  • Level term cover - Both the cost of your premiums and pay-out amount are fixed throughout the term. This type of cover is ideal when you are young as this allows you to lock in a cheaper premium rate.

  • Decreasing term cover - Sometimes referred to as 'mortgage life insurance'. This is used to cover large payments like a mortgage. The payout value of your policy decreases over time as you make repayments on your mortgage.

  • Increasing term cover - This type of cover is designed to protect the value of the eventual payout from inflation. The pay-out value increases over time to protect the value, however, your insurer may also increase your monthly premiums.

Products & Services from the leading financial brands

  • Zurich
  • Legal And General
  • Aviva
  • AIG
  • Beagle Street
  • LVE
  • Royal London
  • Vitality Life
  • Virgin Money
  • Budget Insurance
  • Scottish Widows

Joint life insurance

A joint life insurance policy provides cover for two people under a single policy. It’s a cheap option for married couples, long-term partners or business partners. Joint policies can also be easier to manage than taking out separate policies for you and your partner.

Rather than taking out two individual life insurance policies, joint policies cover both people, however, there are downsides. This type of policy comes in two forms - joint life,  first death and joint life, second death.

Joint life, first death policies only pay out if the first policyholder dies (within the policy term). The surviving partner will no longer be covered and will have to take out another policy if they need further cover.

Over-50s life insurance

If you’re 50 or over most standard life insurance will have higher premiums. With over 50s life insurance, you are guaranteed cover with no medical examination or lengthy application. When you eventually die, a lump sum will be paid out to your loved ones. The downside is that the payout from Over 50s policies are typically smaller than fully medically underwritten term life insurance policies, as your health isn't taken into account.

Critical illness cover

This is designed to provide you and your family with financial security if you become seriously ill, injured or disabled. With critical illness cover, you receive a one-off payment to help you and your family with mortgage and living costs if you are diagnosed with one of a specified list of illnesses or medical conditions of a defined severity.

Whichever type of life insurance you decide on, it's important to take your time and make sure you understand all the terms and conditions of your policy.

Joint life, second death policies only pay out once both policyholders have died (within the policy term).

Get life insurance online...

The factors determining cheap life insurance?

Several factors help to calculate the cost of your life insurance policy. When applying for life insurance the insurance provider will ask you a few routine questions that can affect premium costs:

There are also additional factors that affect the cost of your policy, though this can depend on the type of policy:

  • Age: The older you are, the higher your monthly premium payments will cost. If you take out a policy with ‘guaranteed’ premiums, they will likely be fixed throughout the length of the policy so it's best to take out a policy earlier to make sure your premiums are cheaper. 

  • Health: The overall state of health is a key indicator as to how much you will likely have to pay. The healthier you are the less your premium costs will be. Your insurance provider will normally ask you about both your medical history and your family medical history.

  • Lifestyle: You'll be asked about your height,  weight and any lifestyle choices that may impact your health and therefore may increase the cost of your policy(such as whether you smoke or participate in dangerous hobbies).

    Even if you smoke, quitting may save you money on life insurance. Some providers can offer cheaper life insurance premiums to recent non-smokers, just so long as you've quit smoking for 12 months or more.

  • Occupation: If you work in a job that is considered high-risk, you may end up paying higher premiums to account for the added risk from the insurer's perspective. However, this isn't always the case and depends on the insurance provider's underwriting stance.

Talk to a life insurance expert today...

How to get cheap life insurance cover

There are a few ways in which you can get a cheaper life insurance policy, such as:

  • Taking out a policy when you're young - As mentioned earlier, the older you are, the greater the cost of life insurance. This can save you money if your premium prices are fixed.

  • Give up smoking - Not only is it better for your health but it could also save you money on premiums if you give up smoking. 

  • Consider a joint family life policy - If you are married or in a long-term partnership it's worth considering a joint family life insurance policy instead of individual policies.

    Some people find them easier to manage and only require one payment each month. Although it’s worth bearing in mind that if one of you passes away during the policy term the surviving policyholder would need to secure a new policy.

You can also take a look at our "4 ways to get a cheap Life Insurance policy" article for more information.

What can life insurance cover?

Although, there's no legal requirement to have life insurance protection, it shouldn't be overlooked.

Purchasing life cover is a smart way to provide your family with financial support should you die at any point. The pay-out from your policy can support your family with financial commitments such as:

  • Household bills

  • Living expenses

  • Mortgage repayments

  • Credit card debts

  • Funeral costs

  • Childcare costs and education costs - such as school fees and univeristy tuition

The amount of cover you decide to take out should reflect the financial situation of your family and how they would cope during this difficult time. Over-insuring can lead to spending money on cover that your family may not need. On the other hand not buying enough cover could lead to extra costs later down the line.

At what age should I get life insurance?

When it comes to life insurance, the earlier you start the better. Generally speaking, the younger and healthier you are when you take out a policy, the cheaper your premiums will be. This is because insurers view younger people as being less of a risk than older people.

It's important to remember that life insurance isn't just for those in their later years. Even if you're young and healthy, it's still worth considering taking out a policy. This is because life insurance can provide financial protection for your family should the worst happen.

It's also worth noting that if you wait until you're older to take out a policy, you may be charged more due to the increased risk of death.

Who really needs life insurance?

Life insurance can be especially beneficial for those with dependents, such as parents with young children or those who are married or in a long-term relationship. This is because the pay-out from a life insurance policy can provide financial support for your family should you pass away.

It's also worth considering taking out a policy if you have any outstanding debts, such as a mortgage or credit card debt, as this can help to protect your family from having to take on these costs. It's also important to consider life insurance if you're self-employed, as this can provide financial protection for your family should you pass away.

How can I find a cheap life insurance policy?

There's plenty of routes to buy a life insurance policy, however, if you're looking for the cheapest option, speak to a specialist discount broker, like Cavendish Online. We can help you find affordable cover that suits your personal circumstances and family's needs. For more information, speak to an advisor.

Don't search for life insurance alone...

Still unsure where to find the best policy for the right price? We're here to support you on your quest for life insurance.

At Cavendish Online, we offer you a range of options to help you find the perfect policy. You can find a quote yourself through our quick and simple quote journey. Alternatively, you can speak with one of our friendly specialists over the phone for help in finding the best policy for you and your loved ones.

Speak to the experts...

Give our advisers a call today.

Our team of friendly and professional advisers are on hand to help with any questions you may have regarding Life Insurance.

The advisers can also make recommendations tailored to your current situation and will research the market on your behalf, ensuring you secure the cover you need and supporting you every step of the way. 

01392 436 193(Monday to Friday, 9am - 5.30pm)

Apply with advice

What our customers say

Can I claim income protection on maternity leave?

Prev article

Understanding Mortgage Life Insurance

Next article