Of all insurance products, life insurance is perhaps the one that’s most often misunderstood. It’s misunderstood regarding who needs it, who benefits from it, and typically by how much it costs.
We often find that the majority of people are surprised to know how little their monthly premium works out to be, and for the majority of people, it’s far less than they’re paying for other insurance every month. It’s also the type of protection that almost nobody could regret buying – even just for the peace of mind alone.
So, is life insurance as expensive as people often assume? Let's find out.
Is it worth having life insurance?
If your children, partner, or other family members rely on your income to cover day-to-day expenses or the mortgage on your home, life insurance is a smart way to make sure they’re taken care of if the worst happens.
You can’t rely solely on the government to take care of your family. Any support your family would receive is likely to be far less than you’d expect, which could leave them struggling financially at a time when they need stability the most.
Even if you already receive cover through your employer, it's worth having a policy of your own. Employer-based plans are often tied to the company, so in most cases, if you leave, you'll no longer be covered.
Compare Life Insurance quotes online...
Why do so many people put off purchasing life insurance?
There are numerous reasons as to why people in the UK don’t have a policy in place. Typically, it’s down to 3 main factors:
- Believing the cost of a policy is out of their reach.
- Wrongly assuming they’d be ineligible for cover.
- Not understanding what type of cover to buy and how much cover they need.
Fortunately, like many things in life that at first seem daunting or difficult, when you actually decide to give it a go, you may surprise yourself by how easy the process is.
Thanks to more streamlined quote engines, it’s never been easier (and quicker) to arrange and compare online life insurance quotes, no matter what stage of life you’re at. Over the years, life insurance brokers and providers have streamlined the application process so you can have cover in place in as little as 30 minutes.
Is life insurance really that expensive?
It’s common for people to overestimate life insurance costs.
In fact, research shows that UK adults overestimate the monthly cost of life insurance by as much as 184%[1].
For most people, a policy can cost just a few pounds a week – or even less than that.
Your age and health in general (including whether you smoke) are just a few factors that will be considered when applying for cover. Each goes into determining how much your monthly premium will be. But even with these factors, life insurance is generally very affordable when you consider the financial protection it provides.
For example:
A healthy 30-year-old non-smoker could pay around £10-£15 per month for a 25-year term policy worth £250,000.
A 45-year-old smoker might pay around £25-£35 per month for the same cover.
So, life insurance can be more affordable than you may think. However, cost is just one part of the process...
What to know before You Buy
To apply for the type (and level) of life insurance you need, it’s important to take on board your individual circumstances, like savings, mortgage debt and existing credit arrangements that you have in place. There are also future expenses to think about, like funeral costs and inheritance tax.
Everyone’s situation will be different, as will the type of protection you’ll need. Naturally, this will depend on your personal situation and what stage you are in life.
Does age really affect your premium?
When it comes to buying life insurance, the general rule is: the younger you are, the less expensive it is.
As you age, the risk of illness and death increases, which in turn raises the monthly cost.
This is why many advisers recommend getting life insurance as early as possible, even if you don’t think you need it immediately.
If you’re over 50, you can still get life cover, but premiums will generally be higher, and the cover amount may be limited. Most over-50s plans pay out a fixed sum when you pass away and usually don’t require a medical exam.
Think about the policy type
If you’ve been exploring different cover options, you’ll probably have noticed that you can take out a single life insurance policy for yourself, or a joint policy with your partner or spouse.
Many people prefer a joint policy because it’s easier to manage, usually cheaper than paying for two separate policies, and often quicker to set up. It’s a simple way to make sure both of you are covered without extra paperwork or monthly premiums.
Single vs joint life insurance
Life insurance can be taken out as a single policy or a joint policy. Each has its own differences.
Single life insurance covers one person. If the policyholder dies during the term, the policy pays out a lump sum to their loved ones. If you and your partner both take out separate single policies, each policy pays out independently if either of you passes away during the term.
Joint life insurance covers two people on one policy, which means there’s only one monthly premium to pay. Many people like this because it’s simpler to manage, and you only need to complete one application.
However, if one person dies during the term, the policy pays out, and cover for the surviving policyholder ends. They would need to take out a new policy if they want to continue having protection in place.
Term vs whole-of-life insurance
When choosing a policy, you’ll usually come across term insurance and whole-of-life insurance, so it’s important to know the difference.
Term life insurance covers you for a fixed period, often between 5-50 years. It only pays out if you die during the term, and there’s no lump sum at the end if you outlive the policy. This is usually the more affordable option.
Whole-of-life insurance, as the name suggests, covers you for the rest of your life, as long as you keep paying the premiums. A payout is guaranteed whenever you die. Because the insurer is always liable to pay, whole-of-life policies are typically more expensive than term insurance. Many insurers also refer to this as life assurance.
If you’re unsure which option is right for you, speak to us. We can guide you through the choices and help find the policy that works best for your situation.
Please note: The insurance products offered by Cavendish Online have no cash-in value at any time. If you stop paying your premiums your cover will stop, your policy will end, and you will receive no benefit. If you have not claimed before the end of your chosen policy term, the policy will end, and no benefit will be paid.
Other protection worth considering
Life insurance doesn’t have to stop at basic death cover. There are several add-ons you can include to make your policy work harder for you and your loved ones.
Critical illness cover
Critical illness insurance pays out a lump sum if you’re diagnosed with a serious condition, such as cancer, a heart attack, or a stroke. It can help cover medical costs, mortgage payments, or just give you financial breathing space while you focus on recovery.
Income protection
If you can’t work due to illness or injury, income protection provides a monthly payment to help cover everyday living costs. This can be a lifesaver if you’re the main earner in your household.
Business protection
If you run a business, life insurance can also protect your company. Business protection policies can help cover loans, protect your partners, and keep things running if a key person dies unexpectedly.
With these options, your life insurance could do more than just provide a payout at the end – it could protect your family, your income, and even your business.
Unsure of your options?
Already have A Policy?
It’s great if you already have a policy in place. However, it’s worth reviewing your policy from time to time to make sure it still suits your needs. Life changes such as buying a home, starting a family, or changing jobs can all affect the level of cover you may require.
It may also be worth checking whether you could get a better deal elsewhere. As the market changes, new policies or providers may offer more competitive premiums or better features than when you first took out your cover.
If you’re unsure whether your current policy is still right for you, our insurance experts can review your cover and see if there are more suitable or cost-effective options available.
Get a quote online today
It’s really easy to arrange and compare term-based life insurance online. Simply enter your details into our site, and we’ll ask some questions to generate quotes so you’ll be able to see what policy works out best for you.
Prefer to phone?
Sometimes, it’s easier just to give us a call and speak one-to-one with one of our insurance specialists, who can guide you through the process and support you in choosing the best low cost cover for you and your family.
01392 241 850
(Monday to Friday, 10am to 6.30pm)
[1] https://moneyweek.com/personal-finance/insurance/how-much-does-life-insurance-really-cost
