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Life insurance pays out a cash sum to your loved ones if you die while your policy is active.
There are different types of policy, including:
Level term (family) insurance – pays out a fixed amount if you die during the policy term.
Decreasing term (mortgage) insurance – the payout reduces over time.
Critical illness cover – pays out if you’re diagnosed with a serious medical condition.
Most life insurance policies follow the same steps:
You pay a set amount of money each month or year. This is called your premium.
Your policy runs for a set period of time. This is called your term.
If you die during that term, your chosen beneficiaries receive a lump sum payout.
It's worth considering if your death could cause financial difficulties for someone you care about.
It may be a good idea if you:
Have children or dependants who rely on your income.
Share a mortgage or debts with a partner.
Want to cover funeral costs or household expenses.
Decide what type of life insurance you want. They pay out differently so choose if you want a fixed sum or payout that reduces.
You can take out a single policy for yourself or a joint policy with your partner. Joint policies pay out once, after the first death.
You can add critical illness cover, which pays out if you are diagnosed with a serious condition such as cancer or a stroke.
Complete an application with your personal, lifestyle and health details. You’ll need to declare any medical conditions.
The insurer reviews your application. They may ask extra medical questions or request a GP report to confirm your health status.
Once approved, you’ll receive your policy documents confirming your cover type, payout amount, term length and premium.
You’ll pay a set amount each month or year to keep your policy active. The cost depends on factors such as your age, health and chosen cover type.
If you die during the policy term your beneficiaries contact the insurer to start the claims process. Once the claim is approved, the insurer pays the agreed cash sum.
If you have term life insurance, your cover stops when the policy term finishes. No payout or refund of your premiums is made.
🚩 The most important thing is to make sure your premiums are affordable. If you stop paying them you lose your cover.
In the UK, a quick way to estimate how much life insurance cover you need is to multiply the salary of the highest earner in your household by 5-10.
It’s a simple way to make sure your payout would allow your family to keep up with regular bills and manage extra costs such as end-of-life care.
Some average household costs include:
Everyday bills: £1,657.67
Cost of raising a child (lone parent): £16,111
Unpaid care for children and elderly relatives: £16,773
Funeral costs: £4,285
You might also want your life insurance to include money that could replace the help you’d have given to your children if you were still around. For example:
University fees: 71% of parents contribute to their child’s higher education, spending on average £8,723 a year
House deposit: Family members contribute £27,400
Weddings: 36% of parents plan to contribute to their kids' weddings; most budget £1,000 – £5,000
Oops! Are you sure? This doesn't look right.
Oops! Your current cover is more than enough to cover these payouts.
There are two main options for life insurance:
Also called: Level-term insurance
Payout: Remains the same throughout your policy
Best for: Providing long-term financial security and support to your dependants.
Example: This type of policy could ensure that if you unexpectedly passed away you could still help your children with their house deposit or wedding when they grow up.
Fixed premiums: How much you pay never changes
Fixed payout: You know exactly how much money your beneficiaries will receive
Cost: Rarely the cheapest policy option
Not linked to inflation: Your payout will be worth less if the cost of living goes up
Also called: Decreasing-term insurance
Payout: Reduces in size over time
Best for: Covering large but shorter-term debts and expenses like mortgages.
Example: This type of policy could allow your loved ones to stay in their family home if you were no longer around to contribute to the mortgage payment.
Price: These policies are usually the cheapest type of life insurance
Specific: They can be used when you only want protection while you hold a lot of debt
Shorter-term protection: Payouts are highest when you first take out the policy
Not suitable for all mortgage types, including interest-only
Pays out if you are diagnosed with a serious illness.
Pays out a percentage of your salary if you temporarily cannot work.
A whole of life policy offering guaranteed cover and payouts.
Covers two people. Only pays out once, on the first death.
For people who have already been diagnosed with an illness.
Payout increases over time, generally in line with inflation.
Also known as life assurance, pays out whenever you die, rather than being restricted to a term.
Some businesses will pay out if staff die while employed by them.
Critical illness cover pays out a cash sum if you’re diagnosed with a serious condition such as cancer, a heart attack or stroke.
It’s usually an add-on to a life insurance policy. Because they’re separate types of protection, you’re still covered if you die during your term, so could get both payouts. But check your documents - if you've bought a combined policy instead of an add-on, it'll only pay out once.
It offers wider protection than the terminal illness cover that comes with some life insurance policies. Terminal illness cover means your life insurance is paid out early if you have 12 months or less to live.
to be diagnosed with a serious illness than to die.
The main requirements are usually:
✔ Age 18-75
✔ UK resident with legal right to live here
Most people who take out term life insurance never make a claim. That’s because these policies run for a fixed period, and the majority of people are expected to live beyond their policy’s end date.
Once your term ends, your life insurance cover simply stops. No payout is made, and you won’t receive a refund for the premiums you’ve already paid. You may be able to extend, renew or take out a new policy, although premiums usually increase as you get older.
Like most types of insurance, term life insurance is designed to protect against low-probability but high-impact events. It offers peace of mind that if you were to die unexpectedly early, your loved ones wouldn’t have to cope with financial hardship as well as emotional loss.
If you want lifelong protection, you could consider a whole-of-life policy, such as over 50s life insurance. These policies guarantee a payout whenever you die.
However, depending on how long you live, it’s possible that the total premiums you pay could exceed the eventual payout.
Protection insurance is a broad term for insurance products that provide financial support if you die, become seriously ill, or can’t work because of illness or injury.
Life insurance is a type of protection insurance.
Other popular types of protection insurance are critical illness cover and income protection insurance.
If you miss a payment or stop paying, your policy may lapse, which means you’ll no longer be covered and you won’t get any of your previous premiums back. Some insurers offer a short grace period to make up a missed payment, but this varies, so check your policy wording.
When you take out a life insurance policy, you may be able to add a waiver of premium. That means if you later become too ill or injured to work and can’t afford your payments, your insurer will pay the premiums for you so your cover stays in place.
Not as standard, so its real value could decrease over time. But some policies offer indexation, where the cover amount is linked to inflation.
It’s not a legal requirement, but some mortgage lenders may insist you have life insurance before they will approve you for a loan.
You don’t have to buy cover through your lender — you can choose a separate provider that offers better value.
More information can be found in our do I need life insurance for a mortgage guide.
Yes — your mortgage life insurance policy will still be valid even if you pay off your mortgage early.
While decreasing term policies are designed to cover large expenses like a mortgage that are anticipated to decrease over time, your policy isn’t directly tied to your house payments.
You will be informed when you take out your mortgage life insurance policy what your payout amount would be at different points in the policy term and when your policy will end. That remains fixed even if you pay off your mortgage sooner than expected. Similarly, if you take on a new or larger mortgage, the policy won’t automatically adjust — you’d need to review your cover to make sure it still meets your needs.
There’s also no requirement for your beneficiaries to use the payout to pay off the mortgage. They can use the money however they choose, such as covering household bills, education costs or general living expenses.
No, mortgage protection insurance is not the same as mortgage life insurance. Mortgage life insurance pays out a lump sum if the policy holder dies. Mortgage protection insurance covers mortgage payments if the policy holder is unable to work due to illness, injury, or unemployment.
Life insurance prices are tailored to your personal circumstances, including your age, your health, and the type of policy you want.
If you smoke, have a high BMI, have dangerous job, or have severe medical symptoms your premiums will likely be higher.
This is a level term insurance policy.
This is a decreasing term insurance policy.
This is an add-on to a life insurance policy.
Most life insurance policies will cover:
✔ Death from natural causes
✔ Death from illness
✔ Accidental death
✔ Death from suicide (but with a waiting period)
✔ Terminal illness (if included in the policy)
✔ Critical illness (if added as extra cover)
A life insurance claim could be refused for:
✖ Providing false or incomplete information when you apply
✖ Missing premium payments
✖ Death caused by risky or illegal activities
✖ Death linked to drug or alcohol misuse
✖ Suicide within the waiting period (usually 12–24 months)
✖ Death outside the policy term (for term life insurance only)
✖ Exclusions specific to your policy, such as certain high-risk occupations or travel
Yes, you can get life insurance with a medical condition.
You must declare it when you take out your insurance, otherwise your policy could be invalidated (it won't pay out).
Having a medical condition can increase your premiums, but it’s often not as expensive as people expect.
Case study: A 30-year-old non-smoker with well-controlled high blood pressure can get a £200,000 level term policy over 30 years for £7.96
Yes, smokers and vapers can still get life insurance. However, it will be more expensive because of the associated health risks.
💡 Top tip: If you quit, inform your life insurer. It is often possible to reduce your premiums once you've been a non-smoker for a couple of years.
Smoker average cost: £27.97
Non-smoker average cost: £19.88
If no one depends on your income, you may not need life insurance.
But if you plan to have children, buy a home, or share finances with a partner, it can be worth arranging cover early. Life insurance is usually cheaper the younger and healthier you are, and any health issues you develop won’t affect an existing policy.
Age 18-49 | Age 50-54 |
|---|---|
£20.83 | £33.89 |
📣 Did you know? While only 14% of under-40s in the UK have a long-term condition, that rises to 58% of people over 60
Yes. Many standard life insurance policies accept applicants up to around 75, although premiums are usually higher as health risks increase with age.
If you have severe pre-existing medical conditions or have been declined for standard cover, you may also want to consider over 50s life insurance. This type of policy guarantees acceptance with no medical questions, as long as you meet the age criteria.
As with standard life insurance, you choose a fixed monthly premium, but unlike standard life insurance you're covered for the rest of your life (as long as you keep paying your premiums) and the policy pays out a guaranteed lump sum whenever you die.
There are downsides to this type of cover. The payout is usually smaller than standard life insurance, and because you pay premiums for life, you could pay in more than your family eventually receives.
It’s a sobering truth that nearly one in five men and one in ten women
^ don’t make it to retirement age. Behind that statistic are real families suddenly faced with the emotional and financial shock of losing a loved one far too soon.We spend a lot of time thinking about pensions and long-term savings, but this highlights why life insurance matters right now. It’s not about you - it’s about protecting the people you love. The right cover can help keep a roof over their heads, pay the bills, and provide stability at the very moment they need it most.
Kara Gammell Life insurance expert
To make a life insurance claim, contact the insurer or policy provider. You’ll need:
The deceased’s name and policy number
A copy of the death certificate
Proof of your relationship to the policyholder
Once documents are received, the insurer will assess the claim and confirm when the payout will be made.
Most payouts are made within a few weeks to a few months, depending on how quickly documents are submitted and how complex the claim is.
Yes — you can cancel at any time.
If you cancel within 30 days, you’ll usually get a full refund. After that, premiums you’ve paid won’t be refunded.
Yes, you can usually extend your policy, though your insurer may reassess your health and update your premiums.
Yes, life insurance claims can be refused if:
The policy wasn’t active
Incorrect or incomplete information was provided
The death wasn’t covered under the policy terms
There’s evidence of fraud
The insurer must explain why they have rejected your claim. If you do not agree with their decision, you can appeal or complain to the Financial Ombudsman Service.
A life insurance payout gives your loved ones financial support after you die. The money can be used for anything they need, whether that’s covering day-to-day costs or helping them plan for the future.
Common uses include:
Mortgage or rent payments
Everyday household bills (utilities, groceries, transport)
Outstanding debts (credit cards, loans, car finance)
Funeral and burial costs
Childcare and education expenses
Replacing lost income for dependants
Medical or care costs for family members
Paying off business debts or commitments
A financial gift or inheritance for children or grandchildren
Covering future milestones such as weddings, house deposits or university fees
To help you find the right life insurance cover, we just need a few minutes of your time and the following information to get you a personalised quote:
Such as your name, address, date of birth, and occupation
Any pre-existing medical conditions and basic health information, such as height and weight.
For example, if you're a smoker or drinker, or engage in any activities that may be classed as dangerous
Including the type of life insurance you want, if you want to cover your spouse or partner, and how much you would like to pay
We only work with FCA-regulated companies, which means they meet strict standards for fairness, transparency and customer protection.
Found the perfect policy to safeguard your family's future? Have an extra reward on us.
Gift cards start at £35 for life insurance policies with monthly premiums of £10 or less and go up to £400 for policies with monthly premiums over £90.
See our terms and conditions for more information.
Restrictions apply. One voucher per person. Not available to customers who previously received a voucher with a life insurance policy purchased after 1st May 2022.
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We’ve partnered with LifeSearch to give people more guidance when buying life insurance. If you’d like some help you can talk to LifeSearch free of charge.
MoneySuperMarket has a long-standing partnership with LifeSearch, one of the UK's leading protection advice specialists.
LifeSearch has been protecting people for over 25 years. Since 1998, they’ve helped over a million individuals, families, and businesses secure 1.7 million policies.
When you compare life insurance through MoneySuperMarket, you’ll see options from insurers LifeSearch work with — helping you find cover that fits your circumstances.
Your policy will always be taken out with the insurer you choose, but LifeSearch can support you at every stage, from applying for cover to making a claim. You can also manage claims directly through their website.
We receive a commission for referrals, but this never affects the price you pay for your policy.
➡️ Find out more about how MoneySuperMarket makes money
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You can avoid paying inheritance tax on a life insurance payout by putting your policy in trust.
You do this by completing a trust form with your insurer, either when you take out the policy or at any time afterwards.
If your policy isn’t in trust, the payout is usually counted as part of your estate when you die. Anything above the inheritance tax threshold - currently £325,000 for an individual, or £650,000 for a married couple - may be taxed at 40%.
But placing your policy in trust means your family gets it all. You can find out more here.
Most term life insurance policies have both minimum and maximum age limits for when you can apply.
The upper age limit is usually between 65 and 80, depending on the insurer and the type of cover. Once your policy is active, it will continue until the end of the term you’ve chosen.
If you’re older, there are also specialist life insurance policies designed with higher or no upper age limits. Over 50s life insurance is one example.
It’s not a legal requirement, but some mortgage lenders may insist you have life insurance before they will approve you for a loan.
You don’t have to buy cover through your lender — you can choose a separate provider that offers better value.
More information can be found in our do I need life insurance for a mortgage guide.
The main differences between life insurance and over 50s life insurance are:
Cover lasts a lifetime: Unlike standard life insurance, over-50s life insurance is designed to cover you for the rest of your life, as long as you keep up with your payments. Usually, standard life insurance policies will only cover you for a set term
No medical info needed: Similar to no medical life insurance cover, you’ll get guaranteed acceptance regardless of any medical conditions you have
Yes, there are no legal limits to how many protection insurance policies you can have at once.
It is common for people to supplement their life insurance with cover that financially protects them if they were unable to work for a prolonged period of time.
This cover can take the form of:
Critical illness cover - Pays out if you are diagnosed with a serious illness.
Income protection insurance - Pays out a percentage of your salary if you temporarily cannot work because of an accident, illness or redundancy.
Insurers use many factors to calculate your premium, including:
Age – premiums rise as you get older
Location – life expectancy varies across the UK
Occupation – risky roles can increase prices
Policy type – e.g., level term vs decreasing term
Payout amount – higher cover costs more
Policy length – longer terms cost more
Health and lifestyle – smoking, drinking, BMI and hobbies all affect risk
Medical history – past or current health conditions may increase costs
Payment frequency – annual payments are often cheaper than monthly
Whether you choose single or joint life insurance depends on your situation. If you’re part of a couple and have dependants, joint life insurance can be a slightly cheaper way to provide financial protection for your family if something happens to one or both of you.
However, most joint policies only pay out once, when the first person dies. You may also need to alter your life insurance policy if you and your partner get divorced.
Life insurance is designed to pay out a benefit to your loved ones in the event of your debt, so it will not usually payout to cover you if you fall ill.
However, most life insurance policies offer a type of terminal illness cover. This means that if you are diagnosed with a terminal illness with less than 12 months to live, you can make a claim on your life insurance. Your benefit can be used for care and end-of-life preparations.
If you want insurance to cover you for serious illnesses, you can optionally add critical illness cover to your life insurance policy. This extra cover allows you to claim your life insurance benefit if you are diagnosed with a critical illness.
Yes, it is possible to take out life insurance on your partner but there are some conditions to this.
If you are taking out life insurance on behalf of another person, you will need to demonstrate that you have 'insurable interest'. This means that you would have provable financial loss if they passed away. This is something that would need to be recognised by the law.
For example, you would experience a financial loss if you own a shared mortgage or were joint owners of a business, and so would have a viable reason for taking out a life insurance policy.
However, you need consent from the other person to take out life insurance on them and in most cases will need a financial advisor to set up the policy as it cannot be applied for in the same way as a standard life insurance policy.
It depends on how your policy is set up, so read your own documents carefully.
If your critical illness cover and life insurance are a combined policy, you’ll usually only get one payout. If you claim for a critical illness your life insurance policy will end, and you won't get a second payout if you die within the term.
However, if you critical illness cover is an add-on to your life insurance policy, then you are essentially holding two distinct protection policies. That means it could pay out twice - once when you’re diagnosed with a critical illness and another if you pass away within the policy term.
Having a pension does not necessarily mean you don't need life insurance. While a pension supports you during retirement, life insurance is meant to provide financial support to your dependents after your passing. Whether you need life insurance depends on your specific situation, such as having dependents, a mortgage, or other debts.
Yes, you should still consider life insurance, even if you don't have a mortgage. Life insurance isn't exclusive to homeowners. It's for anyone who wants to ensure their loved ones are financially supported after they die.
Benefits of life insurance include financial support for dependents, income replacement, coverage for funeral costs, debt clearance, and providing funds for education or everyday living expenses.
Critical illness insurance can also contribute towards lost earnings if you're alive and unwell.
Whether you choose single or joint life insurance depends on your situation. If you’re part of a couple and have dependants, joint life insurance can be a slightly cheaper way to provide financial protection for your family if something happens to one or both of you.
However, most joint policies only pay out once, when the first person dies. You may also need to alter your life insurance policy if you and your partner get divorced.
A waiting period is a set amount of time at the start of a life insurance policy when certain causes of death or illness aren’t covered. If the policyholder dies during this period, the insurer may not pay out.
The most common waiting period applies to death by suicide, which is usually excluded for the first 12 to 24 months after the policy begins. This rule is designed to prevent immediate claims following the policy start date.
Some whole of life or over-50s policies also have a waiting period for death from natural causes, often lasting one or two years. During that time, the insurer will only pay out for accidental death; if death occurs from illness or natural causes, the policyholder’s premiums are usually refunded instead.
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No, at this time life insurance is not an eligible product for unlocking our SuperSaveClub rewards. It is also not included in our Price Promise.
Reviewed on 12 Dec 2025 by
Data based on the median price of life insurance sold through MoneySuperMarket for life insurance and critical illness cover in November 2025.
Data based on the median price of life insurance sold through MoneySuperMarket for decreasing cover in December 2025.
