How to cut the cost of your life insurance

You could save money on your life insurance by looking for policies that give you the cover you actually need. Here is how to get the right cover for the best price.

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Where to start

Before you look at ways to find the cheapest policy, you need to work out:

  • When you should get it

  • What cover you need

  • How long you need it for

Not sure how life insurance works? Find out here.

Do I need life insurance?

As some policies start from £5 a month, for many life insurance will be worth the cost simply as a security net. However, whether it is truly worth the money depends wholly on your personal circumstances.

For example, if you have just taken out a mortgage, a life insurance payout could clear your debt in the case of your death. This would take the financial stress off an dependants you leave behind and could bring an added sense of security. If you have kids, a life insurance policy could ensure your children a sum of money to help them with their finances, or to go towards their education, e.g. university fees.

If you are older, life insurance premiums are likely to be more expensive. Costs can also increase if you have any health problems or smoke.

When to apply

The earlier in life you apply, the cheaper your premiums will be, as insurers will consider younger customers less likely to claim.

You can apply for most life insurance policies from 18 years old, but this does not mean you should take out a policy and start paying premiums before you need to.

Only take out life insurance if you think you might need it. For example, you might want to ensure your mortgage or other debts are paid off when you die, rather than passing them on to your loved ones to pay.

Can you get a joint policy?

Yes, most life insurance companies let you apply for cover under two names.

joint life insurance policy is cheaper than buying two individual policies. However, the cost difference can be small and they only pay out once, after the first person dies.

If you and your partner want cover for a specific reason, such as to cover the mortgage if one of you die, then a joint policy could save you on your monthly premiums.

Read your policy documents carefully to understand exactly how your cover works.

Choosing enough cover

If you are unsure how much cover you need, consider:

  • If you have a mortgage, or any other borrowing. Choose an amount of cover that will at least payout enough to pay your debts off when you die.

  • If you have children, or anyone you care for, a payout could help support them financially. Make sure you are covered for what you want to pay for, such as university fees, a house deposit or to pay for care.

Can you choose an income payout instead?

If you would rather have an income payout, you could look for a family income benefit policy. They pay out an income until the end of the policy's term.

Learn more about family income benefit here.

Your insurer will pay an income amount of your choosing to your loved ones for the remaining duration of the policy's term if you die before it ends. These policies are not available from every insurer and you may need to use an independent financial adviser or broker to find cover that offers an income payout.

Choosing a policy term

When you know how much cover you need, you should think about how long you want that cover to last.

  • If you have a mortgage, you could match the repayment term so if you die before paying off your mortgage, the life insurance payout will cover the rest.

  • If you have children, you may want the cover to last until they reach a certain age, such as 25, when they have moved out and may be looking to buy their first home.

Finding the best price

When you know what you need from a policy, you should get as many life insurance quotes as possible to find the cheapest monthly premiums.

When comparing life insurance policies, do not just pick the cheapest one. You want to find the policy that gives you all the cover you need, just for the cheapest price.

Choosing cheaper cover that doesn't suit your needs is counterproductive, as it may not pay out when you or your loved ones need the money most.

Use our comparison to find life insurance policies