Why do we need life insurance?

Many people may wonder: Why get life insurance?

The answer is, you probably need life insurance if you have dependents who rely on your income, such as a partner or children.

Life insurance can provide you with peace of mind knowing that they would be financially stable if you were no longer around.

The best type of policy and how long your life insurance should last for will depend on your personal circumstances.

For example, you could choose a term policy which lasts for a set period (up to 50 years) or a whole of life policy which lasts for the rest of your life.

Term-based policies are good for covering things like your mortgage and other debts, so that it will pay out if you pass away before settling these.

It’s important to choose the right life insurance to suit your circumstances. At Reassured, we can help you with this task as well as compare quotes to help you find our best rates.

Quotes are free and without obligation, and start from just 20p-a-day † .

In this guide, we cover some common questions about life insurance:

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How long should I get life insurance for?

There’s no one size fits all answer when it comes to life insurance. How long you should get life insurance for will depend on your personal circumstances.

The type of life insurance you require, and its length, could vary wildly from another applicant’s.

Most people will express their concerns about the future when questioned ‘why buy life insurance?’

Circumstances that your loved ones couldn’t control if you were no longer around to provide financially are usually the primary reason for taking out life insurance. Maybe, you're worried about your children’s future without you. Or maybe you want to help your partner can pay the remainder of a shared mortgage.

The reasoning behind life insurance is personal to the policyholder. However, most stem from an anxiety about how those left behind will cope financially when you’re gone.

Therefore, a policy should be long enough to protect what you need it to.

Most commonly, a life insurance pay out is used to help cover:

Icon green tick Mortgage / Rental payments for family

The average outstanding mortgage debt in the UK is £132,378[1].

Life insurance can be taken out to help cover your remaining mortgage debt should you pass away before it’s paid off.

If you take out life insurance for this reason, then you could choose a term length that reflects your mortgage term.

If you take out life insurance to cover rental payments, then you could choose a term length that ends when your children are financially independent.

Icon green tick Household costs

Utility bills, council tax and home repairs are all things which need to be taken care of.

It’s worthwhile calculating a realistic yearly amount in household costs and the length of time these will need to be covered for.

Icon green tick Debts

The average total debt per adult in the UK is £65,510[2].

If you've debts which will impact your family, ensure that your term aligns with your payment term.

Icon green tick Day-to-day family living costs, including food and transportation

From being able to get to work, to making sure you family can eat 3 meals a day. 

You'll need to make sure the term length covers your family until they can support themselves financially

Icon green tick Childcare and education costs

According to the Child Poverty Action Group, in 2022, the total cost of raising a child to the age of 18 stood at £157,562 for a couple and £208,735 for a lone parent[3].

It's worth considering your term is long enough for your children to reach adulthood or until they’re financially stable, for example after they have left university.

Icon green tick Funeral costs

The average basic funeral cost in the UK is £4,141[4].

Life insurance can help to relieve some financial worry for your loved ones when the time comes to plan your funeral.

A policy that lasts for the rest of your life, such as whole of life or an over 50s plan, is a good option if you’re in your later years and want to contribute help towards your funeral costs.

Icon green tick A partner’s retirement fund

This can help to supplement the lost income they may have benefitted from before you passed away.

By checking your savings and/or retirement fund, you'll be able to work out how close a partner is to retiring and cover that period accordingly.

Icon green tick An inheritance

To help your loved ones financially in an uncertain future without you.

If your children are under 18, you might want to ensure they have enough funds to be supported through childhood into early adulthood.

Icon green tick To donate to charity

Charitable donations can be made from a life insurance pay out to causes which have meant a lot to you in life.

However, there are other reasons life insurance could be a benefit to you.

Once you have an idea of what future events need to be covered, you can pick the type of life insurance and term length that suits your needs.

The minimum and maximum ages for life insurance will vary between insurers and the different policies.

At Reassured, we’ll help you find the right life insurance and length of cover to suit your circumstances from our panel of insurers.

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Different types of life insurance

Many people will ask themselves: what type of life insurance do I need?

There are multiple types of life insurance which all vary in length. Each policy is tailored to meet different needs and what you’d like to protect.

How long does life insurance last term life insurance v1

Term life insurance

  • Pays out if you pass away during a set period (the ‘term’)
  • Choose whether your sum assured stays the same (level term) or decreases during the term (decreasing term)
  • Term length up to 50 years
  • Once the term of the policy has been reached the policy will expire
  • Term life insurance is ideal to help protect a mortgage
  • Fixed monthly premiums
How long does life insurance last whole of life insurance v1

Whole of life insurance

  • Fixed monthly premiums and sum assured
  • Whole of life insurance has no term and instead the cover remains in place for life
  • Pay out when you pass away, not if
  • Tends to be more expensive to reflect when it pays out
  • It’s possible to pay more into the policy than what pays out, especially if it’s taken out early in life
  • More suited to people in later life, who are in good health
How long does life insurance last over 50s life cover

Over 50’s life cover

  • Pays out when you pass away, not if
  • Designed solely for UK residents aged between 50 and 85 years old
  • No medical information required
  • Lower maximum assured sum than other policies
  • Ideal for those later in life with health issues
How long does life insurance last family income benefit

Family income benefit

  • Life insurance which provides tax free monthly sums rather than one lump sum
  • A term based policy (up to 40 years)
  • Once the term has been reached the policy will expire
  • Can help to cover day-to-day family living costs

It is important to note that all premium payments must be maintained for all policy types in order to keep your life insurance policy valid.

The table below shows the differences between the policies at a glance:

Level termDecreasing termWhole of life insuranceOver 50’s life coverFamily income benefit
Maximum term length50 years50 yearsUntil policy holders’ deathUntil policy holders’ death40 years
Exempt from inheritance tax?No, (but can be written in trust to avoid / minimise 40% inheritance tax)No, (but can be written in trust to avoid / minimise 40% inheritance tax)No, (but can be written in trust to avoid / minimise 40% inheritance tax)No, (but can be written in trust to avoid / minimise 40% inheritance tax)Yes
Medical QuestionsYesYesYesNoYes
Fixed premiums (providing no change to coverage)YesYesYesYesYes
Critical illness coverCan be added for an additional costCan be added for an additional costCan’t be addedCan’t be addedCan be added for an additional cost
Free terminal illness cover includedYesYesAvailable with certain companies (check terms and conditions)Available with certain companies (check terms and conditions)Yes
Max sum assured£1,000,000£1,000,000£1,000,000£20,000Varies depending on provider
Premium priceAffordable cover from 20p-a-day † Affordable cover from 20p-a-day ¥ Affordable cover from 27p-a-day (through advised team) ± Affordable cover from 20p-a-day + Contact us for further information

How long does term life insurance last?

Term life insurance through Reassured can last for up to 50 years. This allows you to choose a term length that meets your specific needs.

You’ll need to pay a monthly premium until your policy expires or you pass away.

Many things can influence how long your term should be, such as:

  • Your financial commitments - When taking out either level or decreasing term life insurance you’ll need to consider what financial comments you have and how long they’re likely to last. For example, what is remaining of your mortgage term and how long will it be until your children reach financial independence?
  • Your age - Your age is another key factor that should be considered as most providers will require your cover to have ceased by an upper age limit, this means your policy will need to have come to an end by this time. The upper age limit is usually around 80, but this can vary depending on the provider.

Compare term life insurance through Reassured to find the right cover to meet your needs at our best available price.

We can help you to conduct a full level term vs decreasing term quote comparison.

How long does whole of life insurance last?

Whole of life insurance is a form of life assurance, meaning cover lasts for the rest of your life.

This provides a pay out to your loved ones no matter when you pass away.

You’ll need to pay premiums until you reach a certain age (such as your 90th) or until you pass away depending on the insurer.

Why not compare whole of life insurance through our advised team using our award-winning broker service?

What age should you get life insurance?

In general, there’s no correct age to secure cover and everyone who’s eligible can benefit from having life insurance.

However, taking out life insurance while you’re young and in good health allows you to benefit from the most favourable premiums throughout the entire lifetime of your policy.

Many people decide to take out life insurance once they have reached certain milestones in their life. These include getting married, having children, and getting their first mortgage.

However, even if you've surpassed these, it’s not too late to take out life insurance.

Based upon our award-winning broker service, you can see below an example of the difference in cover between level term, decreasing term and whole of life insurance*:

AgeLevel term (30-year term)Decreasing term (30-year term)Whole of life insurance
20£3.66£3.50£64.08
25£4.28£4.05£70.84
30£5.56£4.55£78.53
35£7.43£4.97£94.82
40£10.71£6.79£113.45
45£16.49£10.08£140.07
50£27.29£16.40£154.68

*Quotes are based on a non-smoker, in good health, for £100,000 of cover

What age should life insurance end?

Some types of life insurance have a maximum age limit that your life insurance should end and your premium payments will stop.

For example, with a term-based policy taken out through Reassured the policy term must expire by your 90th birthday. This means you can’t take out cover that surpasses your 90th birthday.

With other types of life insurance, such as whole of life and an over 50s plan, there’s no maximum age that the term should end because the cover lasts until you pass away.

In some circumstances you can choose the age that your life insurance ends, because that’s when your financial commitments will end.

For example if you take out a term-based policy to cover a 30 year mortgage term and you’re 30 years old at the point of application, then your policy term will end when you’re 60 and the mortgage has been paid off.

For those asking when do you no longer need life insurance? There’s no universal answer for when life insurance should end.

Each policyholder has their own reasons for taking out life insurance. Therefore, the length and age you are when your policy finishes will vary significantly from person to person.

At Reassured we can talk through all your needs to help you find your ideal policy. Simply get in touch.

Who needs life insurance the most?

While everyone who’s eligible can benefit from having life insurance, below are a few groups who may benefit from life insurance the most:

Family Protection

Parents - Any parent or grandparent will feel obliged to prepare for the worst. Life insurance can help to provide peace of mind that your young children or dependents are looked after financially if you were to pass away. It can also be beneficial if you would like to cover further educational expenses or to leave an inheritance for adult children to spend as they wish. Life insurance can help to shield your children from additional costs which could arise upon your death or pay any outstanding debts owed by your estate.
Couples Protection

Spouses who provide most of the income - If you are married or cohabiting with a partner who either earns less or doesn’t work, it’s important to make sure they can cover the day-to-day cost of living if you pass away. This can help cover rent or mortgage payments to help them remain in the home, or can create a supplemental source of income through the bereavement period, safeguarding their financial security.
Income protection

Older adults without savings - By having life insurance in your later years, you could help to cover the expenses necessary for your funeral, saving your family or loved ones from having to pay out of their own pocket. The average cost of a basic funeral in the UK is £3,953, with additional send off and cost of professional fees raising that average to £9,658(4).
Health

Those in high-risk occupations / have high-risk hobbies - While the cost of your life insurance could be higher due to your high risk job or hobby, you would require the cover more than most. It’s recommended that you confirm your occupation or hobby is covered under the terms and conditions of whichever policy you choose.
Safe Service

Supporting ageing parents / relatives - This is a similar scenario to those with children or grandchildren. While most people never assume they will pass before their older relatives, it is important to consider their financial security if they require additional care. If you supplement care home costs, carer costs or other medical bills for a relative’s frail health, you will want to help cover these costs if you were to pass suddenly.

How much life insurance should I get?

How much life insurance you should take out will be based on your reasons for taking out cover.

For example, if you are taking out a policy to help cover your mortgage, you need to ensure that there’s enough coverage for the remaining payments. If you want to help cover your funeral costs, make sure there’s enough to cover these rising expenses.

Essentially, it depends on what and who you’re looking to protect.

It can be trickier to determine if you have dependents, as the amount of money that may be required to support them can fluctuate and can be affected by inflation.

If your circumstances change with your dependents or if you reach a new milestone, including having another child or obtaining a mortgage, it might be possible to invoke a special events clause to change your coverage, if your policy includes this and you meet the eligibility criteria. Your premiums can be increased or decreased depending on a new level of coverage.

Not everyone will be eligible for this option and it is not offered by all providers, so if this is something you would like make sure to read the terms and conditions of the policy before purchasing or ask one of our friendly team about this option.

You can enter your financial commitments below to understand the level of coverage you require:

How much life insurance do you need?

Work out how much life insurance you may need based on your current financial commitments and what you want your policy to cover. Simply fill in the fields which apply to you for an instant calculation.

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£137,934 is the estimated mortgage debt per household in the UK.

The purchase of a home is likely to be the largest financial commitment any of us will make in our lifetime. Your life insurance should cover your remaining mortgage balance to allow your loved ones to stay in the family home should anything happen to you.

Source: Moneynerd.co.uk
£
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The average monthly household budget in the UK is £2,548 (that’s £30,576 per year), which is spent on transport, food & drink, utilities (gas, electricity, water etc), clothing, council tax and leisure activities.

With energy prices hitting a record high and the cost of living rising sharply in the UK, you may wish to factor in utility bills and family living expenses into your cover.

Source: Nimblefins.co.uk
£
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The average personal debt of UK adults has risen to £34,566 (not including mortgage debt), with credit cards, personal loans and overdrafts being the most common forms of debt.

Factoring in any debts into your life insurance cover means that, if they need to be paid back from your estate after your passing, your loved ones won’t miss out financially.

Source: Money.co.uk
£
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According to SunLife, the average cost of a funeral in the UK is £3,953 (with the overall cost of dying at £9,200).

Funeral costs have increased by 116% since 2004 and are a significant cost which should be factored into the amount of life insurance you secure.

Source: SunLife.co.uk
£
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When factoring in cover for your children, you may wish to calculate the amount based on how long it is until they reach financial independence.

This could include childcare (£7,000 per year for part-time care), school expenses (£1,519 per school year for uniforms, lunches, stationary etc), as well as an additional sum for further education (this could be a contribution of up to £5,000 per year).

Sources: Daynurseries.co.uk, Primarytimes.co.uk & Savethestudent.org
£
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2 in 5 adults say they are relying on an inheritance to fund their retirement.

Factoring in an inheritance to your sum assured could allow loved ones to live a more financially comfortable life. Alternatively, you could leave a cash gift to a charity of your choosing.

Source: Moneyage.co.uk
£ -
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If you’re lucky enough to have your own savings or are part of the 30% of UK residents who already have a life insurance policy in place, this can provide financial protection for loved ones.

By entering your current cover, savings or death in service amount you can reduce the sum assured you require.

Source: Scottishbusinessnews.net
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If you’re still unsure of how much coverage is required, it’s worth talking it through with a with a broker to get a better idea of what you could cover. Why not do this by comparing quotes with Reassured?

If you already have life insurance in place, you may wish to review your current policy to ensure it still meets all your needs and compare new quotes to see whether you’re getting the best possible deal.

How much is life insurance?

There are multiple factors considered by insurers which impact the cost of your life insurance premium. These typically include:

  • The type and length of coverage
  • The sum assured
  • Your age
  • Your smoking status
  • Your health (and sometimes, the health of your immediate family)
  • Your weight/BMI
  • Your lifestyle and occasionally your occupation

The price you pay per month will reflect your individual circumstances. This may be higher or lower than the average price or the examples we've provided.

Reassured could offer you cover from as little as £5 per month, equating to approximately 20p-a-day.

Life Insurance FAQ’s

How much should you pay for life insurance?

Ideally you should pay the cheapest monthly sum you can for the level of cover you need. Always make sure that your policy is at a price within your budget, as if the policy is unpaid, you will not be covered and you could lose all your payments.

While the average life insurance cost per month ranges from £38.15š, prices can be lower or higher depending on the applicant’s circumstances.

What reason would life insurance not pay out?

Life insurance won’t pay out if there’s incorrect information on the application. This is called a non-disclosure and can prevent a pay out from being made.

If any exclusions have been added to a policy (for example a pre-existing illness) and you pass away due to this reason, a pay out won’t be made.

If you stop paying your premiums or your policy term comes to an end you won’t be covered and no pay out will be made, any claims made will also be unsuccessful.

Do life insurance policies expire?

All term-based life insurance policy will expire after the term has elapsed or if the payments are not maintained. Any whole of life insurance or life assurance policy won’t expire providing the payments are maintained.

What term life insurance is best?

Both level and decreasing term life insurances are suited to different needs. One isn’t better than the other, but one may fulfil your personal needs more effectively.

For instance, if you have large expenses (such as an interest-only mortgage or family living costs) level term life insurance may be more suitable to help cover these costs.

However, if you've a repayment mortgage and this is all you wish to cover, then decreasing term life insurance could be an ideal option to help cover this as it can reduce in line with your remaining mortgage balance until both reach £0.

What happens if I outlive my term life insurance?

If you outlive term life insurance, the policy expires, and you’ll no longer be covered. Your beneficiaries won’t be able to claim on the expired policy when you pass away.

What happens to the money at the end of term life insurance?

If you reach the end of your term life insurance policy, the policy will simply expire and no pay out will be made. Loved ones won’t be able to claim on the expired policy when you do pass away.

If term life insurance comes to an end as a result of your passing, loved ones will need to make a claim and a pay out will be issued.

Does life insurance cover funeral costs?

All types of life insurance can be used to help cover funeral costs, providing the sum assured has enough money remaining to pay these expenses and the coverage doesn’t expire before the policy holder’s death.

Can you have more than one life insurance policy?

Yes, there’s no specified limit on how many life insurance policies you can hold.

However, you won’t be able to take out more financial cover than an insurer deems necessary.

While it’s possible to take out multiple life insurance policies, you should make sure that all the premiums together are still affordable for you, because if you miss payments your cover will cease and you will be left uncovered.

Only take out the level of cover that you need to avoid paying over the odds.

How to choose life insurance

Reassured offer life insurance products from multiple top UK providers. The following providers products are offered at Reassured:

Level term life insuranceDecreasing term life insuranceWhole of life insuranceOver 50’s life cover
Legal & General logo Icon green tick Icon green tick Icon ruby cross Icon ruby cross
LV= logo Icon green tick Icon green tick Icon ruby cross Icon ruby cross
Aviva logo Icon green tick Icon green tick Icon ruby cross Icon ruby cross
AIG logo Icon green tick Icon green tick Icon green tick Icon ruby cross
Zurich logo Icon ruby cross Icon ruby cross Icon green tick Icon green tick
SunLife logo Icon ruby cross Icon ruby cross Icon ruby cross Icon green tick
OneFamily logo Icon ruby cross Icon ruby cross Icon ruby cross Icon green tick
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How to buy life insurance?

At Reassured, we can provide you with our award-winning life insurance broker service.

It’s completely fee-free and can help you secure a policy that meets your needs at our best price.

Our service will provide you with all the information you need about the policies we have available and help you compare multiple quotes from some of the UK’s leading insurers.

We can save you time and money by comparing these quotes for free.

Our FCA-regulated service helps you make an informed decision, and we can arrange cover that starts from just 20p-a-day.

Simply get in contact to start comparing life insurance quotes.

Compare Life Insurance Quotes »

Sources:

[1] https://www.finder.com/uk/mortgages/mortgage-statistics

[2] https://themoneycharity.org.uk/money-statistics/

[3] https://cpag.org.uk/sites/default/files/files/policypost/Cost_of_a_child_2022.pdf

[4] https://www.sunlife.co.uk/funeral-costs/

[5] https://www.nimblefins.co.uk/savings-accounts/average-household-savings-uk

š This information has been gathered from our internal sales data and is the average price of all term life insurance policies (both level and decreasing term) sold to our customers, of all applicable ages, over a 12-month period. The sum assured will vary. Data is correct as of 19/11/2024

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