What Is The Average Cost Of Life Insurance In 2022?

average cost of life insurance

Life insurance prices will vary from person to person because they are partly determined by your unique factors, such as age, health, and lifestyle.

It can be an affordable way to safeguard what is essential in your life. The prices can start from £5 per month.

Understandably, people go online to look for the average cost of life insurance, and some insurers are better than others in terms of policy exclusions, customer service, quick payouts and other factors. However, working out life insurance costs can seem complicated and there is no best life insurance policy as such. It arguably doesn’t exist.

What does exist is life insurance that matches your needs. So, you say ok, well I could visit one of the comparison sites then? Well, not exactly.

The key to securing the most appropriate level of cover for the lowest price is getting advice from an expert – not from an often biased and impersonal software algorithm.

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life insurance average cost per month uk
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Life insurance is a type of coverage that pays out a lump sum if you pass away

It’s a long-term financial commitment, and it’s important to consider how much it will cost and whether you can afford the monthly payments.

The problem is that life insurance costs can be very variable. It may take some research to determine if it is affordable for you.

So what’s the average cost of life insurance? The price of life insurance goes up with your age, and many other factors could affect the cost of your life insurance. It’s hard to predict how much you will pay for life insurance without considering these things.

What affects the cost of life insurance?

As stated above, many different factors affect the cost of life insurance. One of the most important is your age. The younger you are, the cheaper your life insurance will be. That’s because the insurance company expects you to live for a more extended period, so they charge you less for coverage.

Another important factor is your health. If you have a history of health problems or are currently suffering from a serious illness, your life insurance will be more expensive.

This is due to the insurance company taking on more risk when they insure you. They know that there’s a good chance that you might not make it to the end of your policy term.

average cost life insurance over 50

Your occupation is also a factor that affects your life insurance rates. If you have a dangerous job (such as a soldier or a miner), your rates can be higher than someone with a less risky job (such as an office worker).

The reason is that there’s a greater chance that you could die while working, and so the insurance company charges more to cover you.

Finally, the amount of coverage you need also affects your premiums. The more coverage you need, the more expensive your policy will be, as the insurance company is taking on more risk by insuring you for a more considerable amount of money.

So, if you’re wondering what affects the cost of life insurance, those are some of the most critical factors. Age, health, occupation, and the amount of coverage you need all play a role in determining your premiums.

When’s the best time to buy life insurance?

There’s no one-size-fits-all answer to this question, as the best time to buy life insurance depends on your unique circumstances. However, there are a few things to keep in mind when deciding whether or not to purchase life insurance and when to buy it.

One factor to consider is whether you have any dependents who would suffer financially if you died. If you do, it’s important to have life insurance to ensure that they can continue to live comfortably after your death.

Another thing to think about is your age and health. The younger and healthier you are, the cheaper your premiums will be. So if you’re young and healthy, it might be a good idea to buy life insurance sooner rather than later.

On the other hand, if you’re older or have health issues, you might not be able to qualify for life insurance at all. In that case, it’s important to have other sources of financial support for your loved ones in place in case you die.

The bottom line is that there’s no perfect time to buy life insurance. Ultimately, the best time to buy it is when you feel you need it and can afford the premiums.

cost of whole life insurance

Insurance Hero Tip: Smokers are more likely to be charged more for life insurance because they add what is known as “smoker loading” to the cost.

However, if you stop smoking, your life insurance price may drop. Some insurers will even remove the smoker loading for you if you have quit for at least one year.

Insurance Hero can help you find the right policies for you. It is essential, to be honest about your smoking history when applying for life insurance.

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typical cost life insurance
cost of term life insurance

How to reduce the cost of your life insurance

As you know, life insurance prices rise with age. This is something that you cannot control. There are some things you can do to reduce the cost of your life insurance, regardless of your age.

These are:

How much coverage do you really need?

You may need less insurance if you have considered things such as your partner’s future income or your children’s financial independence age. Most people purchase insurance until their spouse retires. However, it is possible that your partner could support themselves financially before that time. This would reduce the time that you need to be protected.

There are also natural points when household expenses may decrease, such as a mortgage being paid off or the financial independence of one or more children. This could help you reduce the term of your policy and the monthly cost you will pay.

What kind of life insurance do you need?

People think of life insurance as a policy that would pay the same amount whether you die now or later. This is called ‘level coverage’. The sum paid out remains the same regardless of whether you die now or in the future. However, does everyone require level coverage?

Many people find their financial vulnerabilities and responsibilities decrease as they age, usually due to paying off mortgages or the kids’ ability to look after themselves.

Young adults have the highest need for financial protection. They have a high outstanding mortgage balance or have many years to provide for their families. But fast forward 10-20 years and your need for protection will likely have diminished.

This is why ‘decreasing coverage’, which pays less each year over the policy’, could be an option. Another option is the family income benefit. These would be less expensive than level coverage, but they are still sufficient for your needs.

cost of life insurance for 60 year old

Average life insurance cost – level term vs decreasing term cover

As the policy’s term length decreases, term insurance is the most affordable life insurance.

When it comes to life insurance, there are two main types of policies: level term and decreasing term. Both have their unique benefits, which is why it can be challenging to decide which one is right for you.

The key difference between level term and decreasing term cover is how the premiums are structured. With level term insurance, the premiums remain the same throughout the policy’s life.

This means that you will always pay the same amount each month, regardless of how old you get or how long you live. On the other hand, decreasing term insurance has premiums that decrease over time. This is often seen as an advantage, as it means that your monthly payments will become more affordable as you get older.

Another critical difference between the two types of cover is how the death benefit is paid out. With level term insurance, the death benefit is paid out in a lump sum to your beneficiaries.

This can be used to help them cover any debts or final expenses that you may leave behind. On the other hand, Decreasing term insurance pays out the death benefit in instalments. This can be helpful if your beneficiaries need regular income to help cover living expenses.

So, which type of policy is right for you? That depends on your individual needs and circumstances. If you want coverage that will last for a set number of years, level term insurance is the best option.

If you want premiums that will decrease over time, decreasing term insurance is the way to go. Ultimately, the key is to choose the policy that best suits your needs and budget.

Below is an example price comparison of a term policy with a decreasing term insurance policy. These are quotes for a £100,000 policy[1]. This covers a 30-year period and is based on a healthy non-smoker.

Your AgeLevel Term Life InsuranceDecreasing Term Life Insurance
20£4.55£4.71
25£5.28£4.99
30£5.84£5.18
35£7.92£6.08
40£11.42£7.97
45£17.37£10.89
50£28.82£17.11

The figures show that term life insurance with a decreasing premium is more affordable regardless of age. However, the savings ratio between the two increases as you get older.

The average cost of a joint life insurance policy

A joint life insurance policy is a life insurance policy that covers two people, usually a married couple. If one person dies, the other person will receive the death benefit. This type of policy can be beneficial for couples who want to make sure their loved ones are taken care of financially in the event of their death.

It’s generally 25% cheaper to have joint insurance than two singles. It will always result in only one payout instead of two.

When deciding whether to purchase joint coverage, it is important to consider the savings you will make every month compared to the loss of one sum assured being received by your loved ones in an emergency.

Below is an example of a price comparison between single policies and one combined policy. These quotes are based upon a policy that provides £100,000 of coverage over 30 years for non-smokers in good health[2].

Your AgeTwo Single Life PoliciesA Joint Life Policy
20£9.10£7.34
25£10.56£8.20
30£11.68£10.27
35£15.84£15.10
40£22.84£21.49
45£34.74£33.31
50£57.64£55.58

The Average life insurance cost for a smoker

Smokers’ life insurance policies are life insurance policies that are specifically designed for smokers. These policies typically have higher premiums than regular life insurance policies, but they can still be a great way for smokers to get the coverage they need.

So as we mentioned above, because of the additional health consequences, the cost of life insurance for a smoker can be significantly higher than for someone who is not a smoker. This could reach up to 50% more for someone over 50 years old.

Smokers pay an average of 56% more than non-smokers in the UK for standard life insurance. The average monthly cost of life insurance for smokers is £14.19 per month, compared to £7.99 for non-smoker[3].

Your smoking history is just one of the factors that will be considered when you arrange your life insurance. Your insurer may request additional information, such as how much you smoke and for how long. The information will be used to assess the potential impact on your health as well as the effect it might have on the possibility of you being eligible for a claim.

Below is an example of a price comparison between a smoker and a non-smoker who is in good health. The quotes are based upon a £100,000.00 level term policy over a 30-year period.

Your AgeSmoker Per Month CostNon-Smoker Per Month Cost
20£5.87£4.55
25£7.25£5.28
30£9.82£5.83
35£14.61£7.92
40£22.75£11.41
45£36.78£17.36
50£60.15£28.81

Average costs of a whole of life insurance policy

A whole of life insurance policy is a type of life insurance that provides coverage for the entire lifespan of the policyholder. It is different from other life insurance policies, such as term life insurance, which only provide coverage for a specific period. A whole of life insurance policy can be used to cover various needs, such as final expenses, estate planning, and long-term care.

The premiums for a whole of life insurance policy are typically higher than those for other types of life insurance policies. Still, the policyholder can be assured that they will have coverage until death. This type of policy can be a valuable asset for individuals who want to ensure that their loved ones are cared for financially after they die.

This guaranteed payout is why this type of protection tends to be the most costly.

Like other types of life insurance, the cost of your premiums will be affected by your age, your health, and your coverage requirements[4].

The table beneath shows example costings for whole of life insurance. The Quotes are based upon a non-smoker in fair health requiring £100,000 of cover:

Your AgeWhole Of Life Cover Cost
30£71.01
35£82.93
40£100.91
45£122.66
50£124.34

In Conclusion

No matter your age, health, or type of life insurance, it’s worth comparing quotes from different insurers to get the best price.

So, do you need life insurance? The answer is probably yes, especially if you have people who are financially dependent on you.

It’s important to remember that life insurance isn’t just for stay-at-home parents or those with young children; it can be vital for anyone with loved ones who would be affected by their death.

You don’t have to worry about finding the right policy or filling out a lot of paperwork – the companies we work with will take care of all that for you. All you need to do is complete one of our simple forms and receive a no-obligation quote. We hope this has helped make sense of life insurance and why it’s so important.

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Research References

The tabular data is accurate as of March 2022 but we must assume that financial products costs fluctuate with time, based upon inflation and other market forces.

[1,2] https://www.reassured.co.uk/life-insurance/average-life-insurance-cost-uk/

[3] https://www.moneysupermarket.com/life-insurance/stop-smoking/

[4] https://moneytothemasses.com/quick-savings/insurance-2/life-insurance/much-100000-life-insurance-cost