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According to Macmillan Cancer Support research, on average, someone in the UK is diagnosed with cancer every 90 seconds
Life insurance is a type of personal protection insurance that pays out a lump sum to selected beneficiaries in the even that the policyholder passes away.
In 2024, we looked at exclusive data to work out the median monthly price of policies and bring you latest insights on UK life insurance.
One of the interesting findings we’ve discovered from our exclusive data is that life insurance hasn’t been as affected by inflation over the past couple of years as some other insurance products, like car insurance or home insurance.
Our data found that since 2022 the median cost of a life insurance policy has increased by around £2 per month, keeping it comfortably affordable for most policyholders with a median price of only £25 per month.
Unlike some other types of insurance, the cost of life insurance isn’t affected all that much by where you live either. For a policy with £200,000 of cover, the median price is similar across the UK, ranging between £18 and £24 a month.
Data based on all life insurance policies for £200,000 of cover sold through MSM between 1st April and 30th June 2024.
But despite how affordable life insurance can be, we surveyed 2,000 UK adults and found that only 20% said they had life insurance*.
When we asked people without life insurance why they didn’t have it, 46% told us that they had never gotten a quote for life insurance, and within this group cost perception was one of the most notable barriers. Of those people who have never obtained a quote for life insurance, the majority of them said they haven’t done so because they think it will be too expensive (22%).
But only 18% of people who don’t have life insurance said that they had actually received a quote that was too expensive – showing that the reality is much different to the myth of cover being very costly.
Certain details such as occupation and lifestyle will have some effect on the cost of a policy. However, one detail that absolutely does affect the cost of life insurance is smoking. Unhealthy habits like smoking will almost always increase the cost of your life insurance, as well as other insurance types like health insurance, critical illness cover, and income protection.
Life insurance providers don’t discriminate when it comes to nicotine, so vaping and other nicotine products can increase the cost of your policy just the same as cigarette smoking. So, if you needed incentive to cut the habit, then perhaps an extra £8 for your life insurance cover might convince you.
Smoker status | Median price for £200,000 of life insurance cover |
---|---|
Smoker | £27.97 |
Non-smoker | £19.88 |
Data based on life insurance policies for £200,000 of cover sold through MSM between 1st April and 30th June 2024
But despite there being an increased cost for smokers, the likelihood of your policy paying out shouldn't be affected providing you are honest with your insurer about your smoking habits.
The top UK life insurance providers continue to have high payout rates, with some of the UK’s most well-known providers approving 95% or more of life insurance claims made in 2023.
As long as you are truthful when applying for your policy and update your provider on any changes to your health or lifestyle, your policy’s cover shouldn’t be affected.
One of the benefits that decreasing term life insurance is known for is its cheaper premiums compared to some other types of life insurance, like level term life insurance.
This is because the cover of a decreasing term policy goes down over time. It’s the type of life insurance that is suited to cover a specific debt that the policyholder wants to pay off in the event of their passing, like a mortgage debt.
Interestingly, our data shows that the overall all median price that our customers are paying for a decreasing term life insurance policy is not that different from a level term policy.
POLICY TYPE | MEDIAN POLICY PRICE |
---|---|
Level term | £25.55 |
Decreasing term | £24.66 |
Data based on median price of all life insurance policies sold through MSM between 1st April and 30th June 2024.
There are a number of reasons why this might be. Our experts suggest one explanation for this similarity in price is the level of cover people are choosing for each of the policy types.
With mortgage prices going up in recent years, customers wanting a life insurance policy to cover their mortgage debt will probably need to take out more cover than those that may want life insurance for other reasons, like covering funeral costs or leaving a gift to their loved ones.
This might be why decreasing policies, which are designed to cover decreasing debts and are typically cheaper than level term policies, have a similar median price according to our data
However, despite decreasing term policies offering more cover for less from the start, that doesn’t necessarily mean policyholders are getting more for less.
As their cover goes down, policyholders are unlikely to have much of their payout left if they want to leave a monetary gift to their loved ones.
Level term policies, on the other hand, offer cover will stay the same for the entirety of the policy’s term. So, covering funeral costs and leaving gifts to family and loved ones is one of the reasons why level term life insurance tends to be the more popular choice among MoneySuperMarket customers, with around 72% of life insurance sales being for level term policies.
While it’s common knowledge that life insurance tends to go up in cost as you age, our latest data indicates that being older doesn’t mean you have to pay out the nose for a policy if you decide you want insurance later in life.
When choosing the same level of cover, policy prices will generally go up as you age.
For example, someone under 25 that wants to take out £200,000 worth of life insurance could be paying as little as £10 a month for a policy. However, someone over 50 taking out a life insurance policy with the same cover might be paying nearly £40 a month.
But when we look at the overall median price of all the life insurance policies sold through MoneySuperMarket between April and June 2024, age doesn’t seem to have very much of an effect on how much people are paying. Some of our oldest Policyholders between the ages of 65 and 69 are only paying around £2 more for their life insurance compared to policyholders under 50.
Policyholder age | Median price for £200,000 of life cover |
---|---|
<=25 | £10.25 |
26-30 | £13.84 |
31-35 | £14.72 |
36-40 | £19.48 |
41-45 | £22.08 |
46-50 | £27.98 |
>=51 | £39.81 |
Data based on all life insurance policies for £200,000 of cover sold through MSM between 1st April and 30th June 2024.
Policyholder age | Overall Median Price |
---|---|
18-49 | £26.21 |
50-54 | £39.91 |
55-59 | £37.62 |
60-64 | £23.65 |
65-69 | £28.54 |
Data based on all life insurance policies sold through MSM between 1st April and 30th June 2024.
One of the reasons why older policyholders are managing to get life insurance for a similar price to younger policyholders is the amount of cover their choosing.
Policyholders over 50 are taking out practically half the amount of cover compared to policyholders in their twenties and thirties.
Policyholder age | Median cover amount |
---|---|
<=25 | £200,000 |
26-30 | £206,995 |
31-35 | £217,891 |
36-40 | £200,000 |
41-45 | £200,000 |
46-50 | £170,000 |
>=51 | £100,000 |
Data based on all life insurance policies sold through MSM between 1st April and 30th June 2024.
But it makes sense that as you get older you probably are going to need a lot less cover.
Older policyholders are less likely to have to worry about the cost of supporting their children, and according to ONS more than half (59%) of people between 60 and 69 years old live in a home that own outright, which increases to 75% and 76% for UK adults in their 70s and 80s. So, it’s fair to assume that mortgage debt is less likely to be a concern for older life insurance holders.
“Our latest findings should be a big confidence boost for anyone thinking their age will get in the way of buying a policy. When you choose the right policy options and shop around, it’s very possible for someone in their forties, fifties, or even sixties to find an affordable life insurance policy that covers what you need.” – Kara Gammell, Personal Finance Expert
Unfortunately, adding critical illness cover to a life insurance policy will increase the cost considerably.
Looking at the median price of life insurance policies sold through MoneySuperMarket, we found that adding critical illness cover to a life insurance policy can increase the price by as much as 175%.
However, that doesn’t mean this extra cover isn’t worth it. Critical illness cover does what a standard life insurance policy can’t – support you and your family if your life is changed by a serious health condition.
According to Macmillan Cancer Support research, on average, someone in the UK is diagnosed with cancer every 90 seconds
Stroke is one of the UK’s leading causes of disability. 1 in 4 strokes happen to people of working age. 1 in 3 in this group will have to give up their jobs
Research by the British Heart Foundation found that up to a third of people they studied within a nine year period that had experienced a heart attack later developed heart failure or kidney failure
Life insurance is there to help your loved ones if you pass away, but the possibility exists that you suffer a serious and/or debilitating health problem instead.
This is a scenario that people don’t often plan for but is very real. If you can no longer work or support your loved ones – if you have additional needs because of your health problems – how do you plan to cover the cost?
Critical illness cover will allow you to claim your life insurance payout early if you are diagnosed with any of the serious conditions outlined in your policy. This allows you to put your life insurance towards covering your care and treatment as well as supporting your loved ones if they relied on your income.
When it comes to life insurance price, there are some things we unfortunately can’t control. Your health and medical history a lot of the time will be a big factor that you can’t change. Lying to your insurance provider or failing to mention any serious pre-existing conditions could invalidate your cover and risk your loved ones receiving nothing if you pass.
But there are a few things that you can do to find a life insurance policy for a good price.
Choose the right cover: Rather than go for the largest amount you can, take some time to think about what you want your life insurance to cover and calculate an amount that’s right for you and your budget.
Choose the right policy type: When you know the reason why you want life insurance, you’ll know which options are right for you.
Compare online: Shopping around for your life insurance policy and comparing quotes can help you find the best deal for your cover.
MoneySuperMarket has won the Feefo Platinum Trusted Service Award, an independent seal of excellence, which recognises businesses that consistently deliver a world-class customer experience.
*All consumer polling figures unless otherwise stated are from a poll of 2,000 adults carried out on behalf of MoneySuperMarket by YouGov in September 2024.
All of the data pertaining to average insurance prices are proprietary to MoneySuperMarket and correct as of 21 October 2024.