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Looking at getting life insurance but not sure of the cost? Read our handy guide to find out how much you are likely to pay for life insurance based on your circumstances.
Life insurance is an insurance policy that will pay a cash amount to your loved ones when you die. In some cases, the money can also be paid if you are diagnosed with a critical illness too.
Naturally, not everyone is comfortable with talking about what will happen at the end of their life. But when financial plans such as life insurance are not in place, the family of the deceased may face financial hardship on top of the grief they are experiencing, which can be extremely distressing for all involved. Therefore, life insurance is there to provide a financial safety net when your loved ones need it most.
Anyone can take out a life insurance policy, which can help pay for everyday expenses such as mortgage payments, bills, childcare costs as well as the cost of your funeral, which in itself can be thousands of pounds. The money can also be set aside for your children’s future financial needs including their education, weddings, a deposit for a house etc.
By getting life insurance in place, you will be safe in the knowledge that while you won’t be physically there to protect your family anymore, they will at least not have to worry about money which will provide some much-needed peace of mind.
| Average cost | £23.12 |
| Minimum cost | £15.85 |
| Maximum cost | £30.40 |
Mortgage only life insurance cover is the most basic form of life insurance cover. The average cost ranges between £15.85 - £30.40 per month, with an average payment of £23.12 per month.
Most people will take out a mortgage only policy, as it will cover the biggest expense their family is likely to encounter in their absence. This life insurance type tends to be cheaper as it runs on a fixed term, meaning if you do not die within the time you are covered, you will not receive a payout.
| Age | Average monthly cost |
| 30 | £40.68 |
| 35 | £50.26 |
| 40 | £62.43 |
| 45 | £80.70 |
| 50 | £106.28 |
Whole of life cover cost will pay a guaranteed lump sum when you die, regardless of when that is. The premiums for whole of life cover are more expensive than a fixed-term mortgage only life insurance policy. The average cost ranges from £40.68 for someone in their 30s, to £106.28 for someone in their 50s.
The reason various life insurance types exist is so that you can tailor the level of cover you need. A benefit is that you have more control over how much you pay per month.
It is also unusual that a young person would take out whole life insurance, with mortgage only insurance being more popular for people in the 30s age range. Though, starting early with whole life insurance is the best way to lock in lower premiums.
When it comes to pricing up life insurance, there is no one size fits all approach. This is what can make researching quotes difficult because what your insurance may cost will differ to friends and family, as the cost is based on your specific circumstances.
However, the following considerations will give you an idea of some of the main aspects an insurer is going to factor in when pricing your quote, so that you know what to expect:
Personal circumstances
Age
Your general health
Whether you smoke
Job type
Amount left on your mortgage
The insurance provider
The type of insurance
Policy length
Amount of cover
Aside from the insurance provider and policy type you choose, the biggest factor that will affect the cost of life insurance is your circumstances.
Ironically, life insurance is based on you as an individual, yet you will personally not see the benefit of the money itself. Instead, you have to enter into the process with your family in mind as these are the people who will receive the payout.
| Name | Age | Smoker? | Cover amount | Term rate | Lowest average price (per month) | Average price (per month) | Highest average price (per month) |
| John | 35 | No | £500,000 | 25 years | £24.68 | £27 | £29.37 |
| Sandra | 55 | Yes | £100,000 | 10 years | £131.18 | £169.43 | £207.68 |
For our comparison example, we entered the details of someone who is considered low risk and high risk for insurers.
First up is a 35-year-old male called John. He is a non-smoker, is 6ft 2” tall and weighs 12 stone (160lbs). John is seeking £500,000 of cover for his life insurance policy so that he can pay off his mortgage and leave money behind for his two children who are currently 4 and 6.
Based on a fixed term life insurance policy, John would pay between £24.68 and £29.37 per month. The average cost would be £27 per month.
Next up is a 55 year old female named Sandra. She smokes 10 cigarettes a day, is 5ft 3” tall, and weighs 15 stone (210lbs). Sandra is seeking £100,000 to cover the cost of her funeral, legal expenses and to leave a small lump sum to each of her 3 children and 7 grandchildren.
Based on a 10 year fixed term rate, Sandra would pay between £131.18 and £207.68 per month for life insurance. The average cost would be £169.43 per month.
This means if Sandra opted for the cheapest policy, over the 10 years she would put in a maximum of £15,741.60 and receive £100,000 if she died within this time. The maximum term Sandra could get cover for would be 25 years, with only one insurer willing to cover her, at a cost of £242.89 per month.
As Sandra is considered high risk in terms of her health, she will pay far more for life insurance versus John who is young, fit and doesn’t smoke. Though, they are both taking out life insurance for different reasons which will impact the type of cover they would ultimately choose.
| Age | Average life insurance payment per month (mortgage only) |
| 30 | £5.50 |
| 35 | £7.80 |
| 40 | £12.60 |
| 45 | £19.29 |
| 50 | £32.72 |
Based on a 30 year fixed term mortgage only life insurance policy, payments can be as little as £5.50 per month for those aged 30. This rises to £32.72 per month for someone in their 50s.
The reality is that death can happen at any age. However, from an insurer’s point of view, younger people are not expected to die young and so will have cheaper insurance costs, especially with a fixed term rate as above. There are also special incentives available for those who start their life insurance policy at an earlier age.
As you may expect, older people will face more expensive life insurance costs, as the likelihood is your policy will need to be paid out far sooner. On the flip side, some insurers cater specifically to the over 50s so you may still be able to negotiate a great deal, especially if you’re in good health.
Insurers want to know what type of a deal they are entering into before they agree on a price for your insurance. If you have any pre-existing conditions that have the potential to limit your life, then this will likely affect the cost of your life insurance.
When filling out a life insurance comparison, some insurers will also ask personal health questions such as your weight and height to calculate your premiums.
You may want to consider making any health or lifestyle changes that will reduce the likelihood of you getting any life limiting conditions, or making any pre-existing conditions worse. If so, your insurers may look more favourably on you.
There is also the option to add critical illness cover to your life insurance payout, which will raise your premiums but will offer extensive cover should you ever need it.
The World Health Organization (WHO) states that tobacco kills half of its users. So it’s easy to understand why being a smoker can seriously ramp up the cost of life insurance. Your insurer may ask if you’ve ever smoked before and to what degree. If you are looking to reduce your life insurance premiums and boost your health in the process, then quitting smoking should be a top priority.
Non-smokers will be rewarded with cheaper life insurance premiums, regardless of the insurer or policy type they choose. You will be classed as a non-smoker if you haven’t smoked for the last 12 months.
When comparing the exact same premium for a smoker and a non-smoker, one insurer quoted £21.80 for a smoker, and £12.06 for someone who had never smoked. This is almost a 50% saving for the non-smoker.
The type of job you do will impact how much danger you come into contact with on a daily basis. It may also contribute towards long term health conditions that could affect your lifespan even after you retire.
Your insurer will consider the risk of illness, accident or life-limiting injury based on your profession and specific job role.
Buying a house is the biggest financial purchase most people will ever make. If you are yet to pay off your mortgage then your life insurance payment should factor this in. There are several life insurance types that are specific to paying off your mortgage.
Similar to any other insurance you take out whether it be for your home, health or car - all insurers price differently. If you already have one type of insurance with a provider, they may offer a discount on taking out a different type of insurance with them.
Though, it’s still worth shopping around to guarantee the best deal based on your specific needs, as staying loyal to one insurance provider doesn’t always save you money.
One of the trickiest parts of choosing any type of insurance is working out which type would best work for you. There are many different types of life insurance policies you will come across, though the following are the most common:
Whole Life Insurance
Term Life Insurance
Decreasing term Life Insurance
Renewable term Life Insurance
Joint Life Insurance
As the name suggests, whole life insurance is designed to payout after you die. Unlike other insurance types, whole life insurance will still be paid out irrespective of when you die. However, as a result this makes whole life insurance more expensive because the payout is guaranteed.
Term life insurance guarantees a financial payout if you die within a specific period of time. For example, the average mortgage takes 25 years to pay off. Therefore, you could take out term life insurance to cover you for this period, so that your family wouldn’t lose their home in the event they no longer had your income to pay the mortgage.
As term life insurance policies only payout up to a certain point, they are cheaper than whole life insurance policies.
Decreasing term life insurance sees its potential payout fall year after year. It is a policy type that’s most commonly used for mortgages, as the amount due on your mortgage will shrink each year the more you pay it off.
Increasing term life insurance works in the opposite way to decreasing term life insurance, as the payouts gradually rise year on year. A reason why you might want to opt for an increasing term life insurance policy is that the rate of payout will rise in line with inflation.
Renewable term life insurance will provide cover for a certain amount of time, but then can be extended when you reach the end date. A benefit of this insurance type is that you do not have to undergo medical tests to be able to extend your cover. So, it may suit those who currently don’t have any life-limiting health conditions at the time they originally take out the policy.
Though, your increasing age at the point of extending your policy will likely increase the cost of your premiums.
Joint life insurance is designed for couples and can be cheaper than taking out two individual life insurance policies. The only downside is that the policy will only payout when one of you dies.
If you took out two individual life insurance policies, you would pay more initially, but you’d receive two payouts.
The longer your policy covers you for, the more chance you have of dying while being covered by your insurer, hence why whole life insurance is the most expensive type of life insurance.
While you may be tempted to choose a shorter policy length to save money initially, you must consider that in the long term this may actually cost you and your family money, if you’ve paid into a policy that runs out before you die.
The higher the payout you want your loved ones to receive after you die, the higher your life insurance premiums will be. If you’re unsure how much your family may need to cover their expenses, it’s worth taking the time to calculate this before you agree on a premium price.
For this reason, insurers will ask about the current age of your children (if applicable) so that they can help you work out how much to leave them.
Life
If you want peace of mind where your family’s financial security is concerned then yes, life insurance is absolutely worth it. In some cases, life insurance is also a requirement such as when taking out a new mortgage.
The question you have to ask yourself is without the large payout life insurance provides, how would your loved ones cope financially? If you are the main provider of the family and your income is suddenly lost, this may affect the quality of life your family will be able to lead, on top of grieving for their loss. Whereas for a small monthly payment you can eliminate all of their financial worries.
If you are looking to protect your family financially should the worst happen, you can find life insurers to suit your needs on Bark.
The average rating for Bark Life Insurance Experts is 4.97, based on 32,770 reviews
5/5
based on 32,770 reviews
