Do I need life insurance?
Key takeaways
You should consider life insurance if you have dependants, such as children or a partner who relies on your income
If you are buying a home, some mortgage lenders will require you to have life insurance in place before they'll approve your loan
The amount of life insurance you need depends on your income, mortgage, savings and the financial needs of your family
Do I need life insurance?
There is no legal requirement to take out life insurance.
However, life insurance is often taken out by people who have (or intend to have) dependants, or large financial commitments like a mortgage.
This is because a life insurance payout can help replace the income you contribute to your household and protect your family from financial hardship if you died unexpectedly.
💡 Top tip: Some mortgage lenders may require you to have life insurance before they'll lend to you. This helps reduce the risk that mortgage payments become unaffordable if you die during the mortgage term.
Who is life insurance most useful for?
Life insurance is most useful for people who have financial dependants or debts that would become someone else's responsibility if they died. This includes:
Homeowners with a mortgage
If you have a mortgage, life insurance ensures that the loan can be repaid if you die, allowing your partner or family to keep the home without financial strain.
People with dependents
If you have children, a partner, or other relatives who rely on your income, life insurance provides money to cover living costs, childcare, education, and daily expenses — helping maintain their standard of living.
Couples with shared finances
Even if you don’t have children, many couples share rent, bills, or other debts. Life insurance can help your partner continue paying these costs without struggling.
Self-employed people or business owners
If your income isn’t covered by employer benefits, life insurance can replace lost income or protect your business interests for your family or partners.
Anyone wanting to cover final expenses
Even for those without dependents, a small policy can help cover funeral costs or outstanding debts, easing the financial stress on loved ones.
What type of life insurance do I need?
The right type of life insurance depends on who relies on you financially and what you want the policy to protect. The table below explains the main types of life insurance and who they're typically designed for.
Type of life insurance | Often taken out by | Key benefit |
|---|---|---|
Parents and adults with dependants | Pays out a fixed lump sum during the policy term, which can help replace lost income | |
Homeowners with a repayment mortgage | Lower-cost cover where the payout reduces broadly in line with your remaining mortgage balance | |
Younger families with long-term protection needs | Cover increases over time, helping it keep pace with inflation | |
People over 50 or people with medical conditions | Many policies offer guaranteed acceptance and a guaranteed payout when you die | |
Couples with shared financial commitments such as children or a mortgage | Covers two people under one policy and can be cheaper than buying separate cover |
💡 Top tip: 65%
^ of life insurance policies sold through MoneySuperMarket are level term policies.
How much life insurance cover do I need?
Our life insurance calculator can help you estimate how much cover your loved ones would need if you died. The main things to consider are:
your annual income
any outstanding mortgage or debts
childcare and education costs
household bills and living expenses
any savings or existing financial protection
Let's give you a life insurance cover quick quote. Just pop in a few details to get started.
When do I need to take out life insurance?
The best time to take out a life insurance policy is generally when you take on some form of financial responsibility. For example, when you have a child, get married, buy a home or start a business.
Do I need life insurance if I have no dependents?
If nobody relies on your income, life insurance may be less of a priority.
However, if you expect to have dependants in the near future, there can be benefits to arranging cover earlier. Life insurance premiums are usually cheaper when you're younger and in good health. If you end up developing a medical condition before taking out a policy, you could pay significantly more for the same cover.
For example, a healthy 30-year-old taking out a 30-year life insurance policy with £200,000 of cover can find life insurance around £7.96
💡 Top tip: If you think you'll need life insurance in the next few years, taking out a policy sooner could help you lock in lower premiums.
Do I need life insurance if I don't work?
Even if you don't earn an income, life insurance could be beneficial if you provide unpaid work that would be expensive to replace if you died unexpectedly.
For example, stay-at-home parents and carers often provide childcare, household management and other support that would otherwise need to be paid for.
A life insurance payout could help your family pay for professional care, childcare or time away from work while they adjust.
You can estimate the value of your unpaid work using our unpaid work calculator.
📣 Did you know? The average person in the UK does £2,115 worth of unpaid housework per month, which is the equivalent to the monthly salary of someone earning over £30,000 per year, according to ONS data.
Do I need life insurance if I have death in service cover from my employer?
Death in service cover and life insurance serve a similar purpose, with both providing a payout to your named beneficiaries if you die.
Death in service is usually provided through your employer and often pays a multiple of your salary. Unlike most life insurance policies, it typically doesn't require medical underwriting and is usually provided at no cost to you. This can make it particularly valuable for people who might otherwise face higher premiums because of their age, smoking status or medical history.
However, death in service cover only lasts while you're employed by your organisation. If you change jobs, are made redundant, retire or your employer withdraws the benefit, your cover will usually end.
There is also the risk that a serious illness could force you to stop working before you die. In that situation, you could lose your death in service cover just before it would pay out.
Relying solely on employer-provided cover can also limit your options if your health deteriorates. You might feel unable to reduce your hours, take early retirement or leave work to focus on treatment and recovery because doing so would mean losing your cover.
For that reason, many people view death in service as a useful supplement to a personal life insurance policy rather than a replacement for one.
How do I find the best life insurance policy for me?
Comparing different life insurance policies side-by-side is the best way to find a policy that fits your needs and budget. MoneySuperMarket can do the hard work for you, allowing you to quickly compare life insurance deals from up to 19
Learn more:
This video information is available as a Text Transcript
Frequently asked questions
Can I get life insurance if I have a pre-existing condition?
Yes, in most cases. Having a pre-existing medical condition does not usually stop you from getting life insurance, although it may affect the price you pay.
Insurers will ask questions about your health and medical history when you apply. The impact on your premiums will depend on factors such as the condition itself, how severe it is and how well it is being managed.
It's important to answer all health questions honestly. If you fail to disclose a medical condition, your insurer could refuse a future claim.
Do I need life insurance for a mortgage?
No, life insurance is not a legal requirement for getting a mortgage.
However, some lenders may require you to have mortgage life insurance in place before they'll approve your application. Even where it isn't required, many homeowners choose life insurance because it can help their family pay off some or all of the mortgage if they die during the policy term.
A decreasing term life insurance policy is often the most popular option because the payout reduces broadly in line with the remaining mortgage balance.
Do I need life insurance if I'm single?
Not necessarily. If nobody relies on your income and you have no major financial commitments, life insurance may be less of a priority.
However, some single people choose to take out cover because they expect to buy a home, start a family or take on other financial responsibilities in the future. Life insurance premiums are generally lower when you're younger and healthier, so arranging cover before you need it can sometimes help you secure a lower price.
Do I need life insurance if I have a pension?
Possibly. A pension is designed to provide an income during retirement, while life insurance is intended to provide financial support to your loved ones after your death.
Whether you need life insurance depends on your circumstances. If you have dependants, a mortgage or other financial commitments that would remain after your death, life insurance could still be worthwhile even if you have a pension.
What happens if I don't have life insurance?
If you don't take out life insurance but have dependants, a mortgage or other financial commitments, your loved ones may need to rely on savings, assets or their own income to cover expenses if you die unexpectedly. If people currently rely on your income, without some sort of protection in place they may face difficult financial decisions at an already challenging time.
Author
Collette Shackleton
Content Writer
Collette Shackleton is a highly skilled Content Writer who has over nine years’ experience creating helpful and engaging personal finance content for consumers. Collette shares her experience as a...
Reviewer
Beth Leslie
Senior Insurance Content Editor
Beth is an experienced writer and editor who specialises in financial and economic content. She is currently the Senior Insurance Content Editor for MoneySuperMarket. Beth is passionate about making...
