What is the Most Affordable Type of Life Insurance?

Updated: 2 Oct 2026

Life insurance is a great way to protect your family’s financial status from life's uncertainties. Some people may tell you life insurance is unnecessary or a waste of money - which just isn't the case. What you should consider is the financial impact your death could have on your family. In that case, you may need life insurance cover much more than you think!

We’re here to put any reservations you may have about life insurance being expensive to rest. In fact, there are several ways to get affordable life insurance - which we aim to explain to you in this article.

So, what's the most affordable type of life insurance policy?

For most people, term life insurance is the cheapest option as it only covers you for a fixed period rather than your whole life. Whole life insurance and over 50s policies tend to cost more because they guarantee a pay-out eventually, regardless of when you die.

We'll go through each type below, along with who each one tends to suit best.

How much life insurance cover will I need?

Before you can figure out the cost of cover, you need to determine how much cover your family needs. Naturally, you should aim to buy the right amount of cover, as buying too little cover could leave your family underinsured. On the other hand, over-insuring can mean you spend more on cover than required.

Besides protecting your loved ones financially, it provides peace of mind for you and your family. If a valid claim is made, your family could receive a cash lump sum in the event of your death.

How much does life insurance cost?

You can work out how much life insurance cover could cost by applying for an online quote. This provides an estimated cost for your monthly premiums, which you're required to pay to remain covered.

When applying for a quote, you'll need to provide a few details to your insurer, usually in the form of a questionnaire. These questions can ask for:

• Your age

• Health and medical history

• Occupation

• Smoker status

• The type of cover you're looking to buy

• How long you want the policy to last

Generally speaking, the younger you are, the less risk you may pose to the insurer, and the lower your monthly premiums are likely to be.

Age and health tend to be the two biggest factors in the cost of cover. The older you are, the greater the chance of a claim being made, partly due to an increased likelihood of developing medical conditions.

For example, a healthy 30-year-old non-smoker taking out a 25-year level term policy will usually pay considerably less than a 55-year-old smoker applying for the same amount of cover.

You may also be required to complete a health exam if you have any pre-existing conditions. If you're looking for an affordable policy, applying for cover at the earliest stage tends to help you save on rising costs later.

Types of life insurance

When it comes to buying life insurance, there are several types of policies that can provide financial support for your loved ones. Term life insurance is often considered one of the most affordable types of life insurance. Whereas whole life insurance is renowned for yielding a higher cost.

Whole life insurance (also known as life assurance)

• Covers you for the rest of your life, paying out a lump sum when you eventually die.

• Both the cost of your premiums and pay-out value are fixed throughout your cover (if you opt for guaranteed premiums).

• Although it ensures permanent cover, whole of life policies are often more expensive than term cover.

• Best suited to: people who want guaranteed lifelong cover and are less concerned with finding the cheapest possible premium.

There is also over 50s life insurance − a type of whole of life policy designed for UK residents aged between 50 and 80.

The level of cover available through an over 50s policy is typically lower than through a standard whole of life policy. However, it isn't medically underwritten, so acceptance is guaranteed. Note that over 50s policies also have a waiting period before you can claim the full sum assured.

Term life insurance

• Provides cover for a set period of time (i.e. 20 years) as agreed upon with your insurer. Unlike whole life cover, term life insurance policies have an expiry date.

• Your family receives a lump sum payment if you die within the policy term. If you outlive the policy term, you won’t receive any money back for the premiums paid.

• Term life insurance offers a more affordable policy compared to whole life insurance.

• Best suited to: budget-conscious buyers and families who mainly want cover for a specific period, such as while a mortgage is still being paid off.

Term life insurance has 3 levels of cover:

• Level term - Standard type of term life cover. Both the cost of your monthly premiums and pay-out value are fixed throughout the policy term (if you opt for guaranteed premiums).

• Decreasing term - Typically used to cover outstanding debts, such as a repayment mortgage. The pay-out value of the policy decreases over time, usually by a certain percentage agreed at the start of your policy. 

• Increasing term - The policy payout increases over time to protect the value from inflation. However, your monthly payments may also increase because of this.

Joint life insurance

• Joint life insurance covers two people under a single policy - ideal for couples who share an income to consider.

• A joint policy can be easier to manage and, in some cases, may be cheaper than having two separate single policies.

• The policy typically pays out after the first death of a policyholder (if the policy is on a ‘joint life, first death’ basis). The policy then expires, so the other party will need to take out further cover if needed.

• Best suited to: couples or families with shared financial commitments, such as a joint mortgage, who want one policy rather than managing two.

Critical illness cover

Critical illness cover pays out a lump sum if you're diagnosed with a critical illness or injury during the policy term. It's designed to help you and your family financially if you become seriously ill.

It can also be purchased as an add-on to a life policy.

How to lower the cost of your premiums

If you're looking for an affordable life insurance policy, here are a few ways to cut the cost of cover:

1. Buy cover early −the cost of life insurance can rise significantly as you get older, due to an increased chance of developing health conditions. Some policies, like whole life and level term cover, offer fixed premiums, so taking out cover early can save you money later down the line.

2. Take out a term life policy − if you're looking for a policy on a budget and only need cover for a set period, term life insurance is usually the cheapest place to start. It doesn't cover you permanently like whole life insurance, but premiums are typically a lot lower − which is why it also tends to suit families looking to keep premiums affordable.

3. Don't smoke − as well as being bad for your health, smoking can raise the cost of life insurance. Premiums are usually higher for smokers due to the effects on health and life expectancy. Some insurers may reduce premiums if you stay smoke-free for 12 months or more, subject to a cotinine test.

How to get affordable life cover with Cavendish Online

At Cavendish Online, we've helped thousands of UK customers compare life insurance policies from leading insurers. While affordability is important, choosing the right level of cover is just as important as finding the lowest premium.

Through our website, we have an online quote and apply service for life insurance. Instead of commission, we instead charge a one-off fee of £25. This is part of how we aim to offer customers the lowest possible premiums.

Our team of insurance experts will work with you to find the right policy for your needs and budget. We work with a range of insurers, whether you're looking for term life insurance, whole life, or critical illness cover.

We offer 3 separate routes to apply:

Route 1 − Quote & Apply Online

Online life insurance with the lowest premiums. You can quote and apply online, making all the decisions yourself, and potentially be covered within 30 minutes. Best for those who know exactly what they need, are in good health, and are confident in writing a policy in trust.

Frequently asked questions

What's the cheapest type of life insurance?

In most cases, term life insurance is the cheapest type of cover because it provides protection for a fixed period, rather than lasting for your entire lifetime.

As the insurer only pays out if you die during the policy term, premiums are usually lower than whole-of-life insurance.

Is life insurance for families expensive?

Not necessarily − level term policies can be structured to match a specific need, like the length of a mortgage or until children become financially independent, which keeps premiums manageable.

Is joint life insurance cheaper than two single policies?

In many cases, yes − a joint policy can work out cheaper to run than two separate single policies, though it only pays out once, on the first death. This is because you are paying for one policy that covers two people, rather than maintaining two policies.

However, the lower cost does come with an important consideration: a joint policy usually only pays out once, typically after the first person passes away. After the claim is made, the policy ends, meaning the surviving partner will no longer have cover in place.

See our guide on joint life insurance vs single for more information.

Does buying life insurance earlier make it cheaper?

In a lot of cases, yes. As premiums tend to rise with age and the likelihood of developing health conditions, applying earlier may help lock in a lower rate.

Can I get affordable life insurance if I have a medical condition?

Having a medical condition doesn't necessarily mean your life insurance will be unaffordable. While some health conditions can increase your premiums, many insurers offer cover for a wide range of medical histories.

You can compare policies or apply with guidance to help you find the most suitable and affordable options based on your circumstances.