Buying life insurance cover is a great way to protect the people you love. We're all looking for the right deal, 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, also take a look at our "4 ways to get a cheap Life Insurance policy" article for more information. 

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 (providing that you’ve kept up to date with your monthly payments). This is usually the most expensive type of 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, a term or 'level term' life insurance policy covers you for a certain amount 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 cheap, however, 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 - 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 - 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 - 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.

Joint life insurance

Joint life insurance provides cover for two people under a single policy. It’s a cheap option for married couples, long-term partners or business partners.  A joint policy 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.

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

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.

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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 cheap life insurance to recent non-smokers, just so long as you've quit smoking for a year 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.

Our trusted brands...

  • Zurich
  • Legal And General
  • Aviva
  • AIG
  • Beagle Street
  • Canada Life
  • Cavendish Life Cover
  • LVE
  • Royal London
  • Vitality Life
  • Virgin Money
  • Budget Insurance

How to get cheap life insurance

There are a few ways in which you can cut costs of life insurance, 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 themeasier to manage and only require one payment, though 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.

What can life insurance cover?

Purchasing life cover is a smart way to provide your family with financial protection 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

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.

Don't search for life insurance alone...

Still unsure on 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.

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Our team of expert protection consultants are here to help. Call for a quick quote and more information now: 

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