Cheap Life Cover

Are you thinking of buying life cover? Perhaps you have recently gotten married or had a child and decided you need to provide some security for your family. Research has shown that 1 in 3 UK families have no life cover at all. (Bright Grey) However, with the rising costs that go along with a growing family, you probably want to find some form of cheap life cover.

The good news is that the price of term life cover has actually been Mortgage Life Insurance for the last few years. Average prices have dropped 40% since 2002. (Lifebrokers)

What is term life cover?

Term insurance is generally the cheapest form of life insurance. This is life cover for a specified term, usually 10 or 20 years. If you die within this time, your family will receive a cash lump sum. If you do not die within the term the policy expires with no cash value, but most policies can be renewed. This is probably the best option for affordable life cover.

Are there any tips for buying cheap life cover?

There are several factors that can affect the cost of life cover and one of the most important is age. You can save quite a bit of money if you buy a policy at a younger age. Insurance providers base premium costs on risk factors and younger people have lower risks than older ones. Nick Starling, a director of the Association of British Insurers, says “Most people only think about buying insurance when they buy a house, take out a loan or start a family so looking into insurance options before you make any big purchases is a good idea.” (Lifebrokers)

According to one survey, the cost of life cover doubles for men between the ages of 36 and 46. (Ireland Online) For example, a male nonsmoker aged 35 can buy a ₤250,000 policy for a 10-year term with a premium of only ₤195 a year, while the same policy will cost a 45-year old man ₤373 a year. (Pr-GB) And if you should wait until you are 50 or over, while there are life cover policies available, they are generally not cheap.

What other factors affect life cover cost?

In addition to age, gender plays a role. Females generally pay lower rates than males, as they traditionally have been classified as lower risk.

However, many people today are being classified as “non-standard” applicants which means insurance companies consider them higher risks and charge them higher rates. Approximately 2/3 of life insurance applicants today fall into this category, mainly for reasons such as obesity and smoking. According to the Association of British Insurers 60% of the UK adult population is considered overweight or obese and therefore a higher risk due to the associated diseases and risks associated with obesity.(Money Extra)

How can I find cheap life cover?

Before searching for a policy, it is best to determine exactly what type of policy you need. How much cover do you need and for how long? Most experts recommend choosing a term long enough to cover your children’s education, so if you have young children, you will probably want a term of 20 years.

There are online insurance calculators available at sites such as Motley Fool, which allow you to calculate how much cover you may need, based on your expenses and debts.

Once you know what type of policy you need, you can compare policies online through comparison sites such as This is Money, Insurance sorter and Motley Fool. Be sure to check a number of companies as there can be a wide variation in prices from one provider to another. Nick Starling of the ABI advises “Buying the right insurance is essential. Don’t just pick the first one you look at or the cheapest, but shop around to make sure it’s the right policy for your needs.” (Lifebrokers)

Will my life cover be taxed?

Not if you are careful to take the policy out “in trust”. This is a procedure any insurance broker or provider will be familiar with. If you take the policy out in trust, it goes directly to your designated beneficiary on the event of your death. If you do not specify “in trust” the policy proceeds could go into your estate and be taxed at a 40% inheritance tax rate. (Moneyextra)

Another item to remember is to always be truthful in filling out life cover applications. If you try, as many people have, to lie about your lifestyle or medical history, this could be grounds for the insurance company to invalidate your policy. If you try to save a few dollars now by stating you don’t smoke when you do, your family could be left with nothing if the insurance didn’t pay due to non-disclosure.