Skip to content
Did you know your browser is out of date?
To get the best experience when using our website we recommend that you upgrade to the latest version of one of these browsers.

Do I need life insurance?

Find out if life insurance is the right option for you

These are factors you need to consider when taking out life insurance cover

By Mehdi Punjwani

Updated: 02 February 2022

Looking for life insurance?

Life insurance is simply a way of ensuring your loved ones are financially taken care of should you pass away.

The best way to determine whether or not you need life insurance is to ask yourself a few simple questions:

  • Would my dependants be financially stable on their own in making certain payments, such as the mortgage or daily expenses?
  • Would my death have a financial impact on my children or partner?

If you’re the household’s main earner

Life insurance can either pay out one lump sum, or regular income payments upon death. It is an essential purchase if you have a partner or children who rely on your earnings.

For example, if you are the sole earner in the family, without life insurance your loved ones might not be able to fund the mortgage, rent or other day-to-day expenses if you were to pass away.

If you and your partner are dual earners

What if you and your partner are both employed? You might not think you need life insurance if you both have a salary

But ask yourself if one income would be enough to cover all the remaining expenses. It’s unlikely that your bills would decrease in size in line with the loss of the deceased’s income, so joint life insurance could be worth considering.

Joint life insurance is a policy which couples can take out. It covers the income that’s lost when one person dies, to make sure their partner can cover outstanding expenses, and it’s usually cheaper than taking out two single life insurance policies. Check out the pros and cons of single versus joint life insurance to see which policy is best for you.

The average cost of single life insurance polices


18-2930-3940-4950-5960+£0£2£4£6£8£10£12£14£16£18£20£8£12£18£20£19Age bandAverage monthly cost


The average cost of single life insurance polices, according to MoneySuperMarket data collected between April 2019 and March 2020

The average cost of joint life insurance polices


18-2930-3940-4950-5960+£0£5£10£15£20£25£30£35£15£22£31£35£31Age bandAverage monthly cost


The average cost of joint life insurance polices, according to MoneySuperMarket data collected between April 2019 and March 2020

Insurance for a stay-at-home parent

If you are a stay-at-home parent, it’s worth considering how you will cope financially if the main household owner passes away.

Similarly, will your working partner be financially stable enough to care for your children and stay in work or pay for full-time childcare.

Life insurance policies can cover these situations too.

Death-in-service cover

People often assume they can forgo life insurance if they have death-in-service cover through their employer. The scheme pays out a tax-free sum – sometimes as much as four times your annual salary – if you die while still employed by the firm. It can be valuable, but it’s not necessarily a substitute for dedicated life cover, where the sum insured is normally set at a much higher level.

Some advisers recommend that you take out life insurance worth 10 times your annual salary, but your own needs will be determined by your financial commitments and requirements. You should always take any death-in-service benefit into account when buying a separate policy.

Potentially, your death-in-service benefit money might be paid into a discretionary trust, which means you cannot nominate the beneficiaries. Also, you cannot normally link death-in-service benefit to a mortgage.

What if you have no dependants?

Most mortgage lenders require house buyers to take out life insurance so their families can cover costs if they pass away.

If you have no dependants however, you probably don't need to worry about life insurance when you buy a home. Your mortgage would be settled by the proceeds of sale of the property following your death.

You only need to think about life insurance if you want to organise your affairs and leave your property to a friend or charity. That said, if you are buying your home with someone who is not a partner or a family member, then both or all of those responsible for paying the mortgage will need to sort out life insurance.

If you are elderly and your children have flown the nest, you might not want to fork out for life insurance premiums.

If you’re over the age of 74, you might struggle to find a life insurance policy that will cover you. At which point, it’s best to opt for funeral insurance. Funeral insurance pays out once the policy holder passes away, though be sure to read the small print to determine just what ‘costs’ are included.

Choosing the right policy type

There are a whole host of life insurance policies you can choose from, whether it’s a whole-of-life policy or a policy where you determine the duration, or ‘term’, of how long you need cover for. Our guide on life insurance policy types will help you decide which is right for you.

Comparing life insurance premiums

You should always compare premiums before you buy life insurance – and it’s easy with MoneySuperMarket’s free independent comparison site. We have policy details from all the leading life insurers to help you find the right cover at the right price.