What You Should Consider When Thinking About £100,000 Life Insurance

Elaine Brookes Steve Case

Author: Steve Case - Insurance Expert

Reviewed & Fact Checked By: Elaine Brookes

Updated: 10th March 2024

100 000 life insurance

One of the most popular questions that insurance agents and insurance companies are asked is, “How much does £100,000 of life insurance cost?”

While comparing insurance quotes to determine the answer, it is also essential to consider additional factors when choosing how much life insurance is right for you and your family.

How much coverage you have is just as important as the company you are working with – here, we will discuss what you should know about choosing a policy.

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How much does a 100000 whole life policy cost?

The cost of a 100000 life insurance policy depends on your chosen provider. Cost varies depending on various factors, including age, health, and occupation. 

We recommend comparing costs from various providers to find your best deal using our comparison form.

However, here are some approximate cover breakdowns, which we hope will give you greater insight.

Age Of IndividualCost Of Cover For A Smoker Cost Of Cover For A Non-Smoker
100k life insurance quotation

Key Points of £100,000 Life Insurance Policy

Key PointDescription
PayoutCash lump sum (e.g., £100,000) if you pass away during the policy term
Coverage UseCan cover mortgage payments, living expenses, funeral costs, etc.
PremiumA Monthly payment is required to keep the cover valid
Policy TypesVarious types to suit different needs and budgets
Maximum CoverUp to £1,000,000 of cover is available through Insurance Hero

What Could £100,000 Life Insurance Cover?

Coverage AreaDescription
Mortgage PaymentsPay off mortgage or maintain monthly repayments
Childcare CostsCover additional childcare costs or lost income
Family Living CostsMaintain current lifestyle without cutbacks
Outstanding DebtsCover debts to prevent loss of savings intended for loved ones
Funeral CostsCover funeral expenses (average cost in the UK: £9,300)
InheritanceLeave a cash gift or inheritance for loved ones
benefits of life cover

Life Insurance Reviewed

Before explaining the cost of life insurance, it is important to take a step back and review what life insurance is.

A life insurance policy is an exchange that policyholders complete with insurance companies. In exchange for monthly premium payments by the policyholder, the insurance company agrees to pay out a certain amount of money if and when the policyholder passes away.

The policy’s beneficiaries can then use these funds to pay final expenses, handle debts, and cover costs.

Different Types of Life Insurance

Several different types of life insurance policies cover many different areas and can be acquired at varying monthly premiums.

Reviewing and understanding all available options is essential before deciding that £100,000 of life insurance is what you want or need.

Level Term Assurance

Level Term Assurance is when a person pays a set premium, usually guaranteed, for a set number of years, also referred to as a term.

Suppose the policyholder should pass away within the term of the policy. In that case, the insurance company will pay out a lump sum of cash to beneficiaries that were agreed upon and outlined in the policy.

This type of policy and lump sum payment is often used to cover expenses for the surviving family members or pay off an interest-only mortgage.

Whole of Life Insurance

Whole of Life Insurance is similar to Level Term, but it does not have a set term in which it can be considered active.

This means that, regardless of the number of years the holder has had the policy, it will pay out a lump sum to the listed beneficiaries.

Because of this, premiums for Whole of Life tend to be much higher than others, such as Mortgage Life Insurance or Level Term.

Whole of Life policies is often chosen when there is a constant need for a lump sum pay-out.

Mortgage Life Insurance or Decreasing Term Assurance

Both Mortgage Life Insurance and Decreasing Term Assurance work in the same way as Level Term Assurance.

The only difference is the level of cover decreases over the length of the policy. Because the insured sum decreases over time, so does the amount of the premium payments.

Mortgage Life Insurance is often chosen when the policyholder wishes to cover an outstanding mortgage – as the outstanding debt decreases, so does the coverage.

Family Home Benefit

Family Income Benefit works the same way as Level Term Assurance, except instead of beneficiaries receiving a lump sum tax-free, they receive similar payments to the policyholder’s regular income stream.

This is the most popular choice when the insured does not want their beneficiaries to receive a large lump sum but would rather have them receive regular payments as though their income is still present.

Determining How Much Life Insurance is Needed

Choosing the level of life insurance coverage is most often a very personal choice. The factors that play into this decision are based on the policyholder’s unique circumstances and his or her needs and wants from a life insurance policy.

Some questions you can ask yourself to make the decision easier are “how will funeral costs and outstanding debts be paid when you pass?”, “

How will your mortgage be taken care of?” and “how much in a lump sum or regular payments will your family need to survive?”

Our new life insurance average cost UK guide describes in great detail cost breakdowns for the different types of life insurance currently available in the United Kingdom.

100 000 Life Insurance FAQs

How the Cost of Life Insurance is Determined

The cost of life insurance, or the premium payment, is determined by different factors.

These factors most often include the type of insurance policy, how much coverage is needed, how long the policy is active, the policyholder’s health and age, his or her lifestyle choices, and whether or not he or she is a smoker.

It is important to remember that every insurance company is different – what may be heavy determining factors to some may be only marginally important to others. This is why it is so important to compare insurance options.

What Else You Should Consider When Receiving a Life Insurance Quote?

While the points mentioned above are some of the most important to consider when choosing a life insurance policy, other items should be reviewed when comparing different policy options.

The first of these additional considerations is your health as the policyholder. If you have any pre-existing conditions or health issues, speaking with a life insurance agent like the ones found at Insurance Hero may be beneficial.

Our professionals can help you to find a life insurance company that will work with you even with any concerning health or lifestyle issues.

Additionally, you may consider a joint life insurance policy if you have a spouse. For joint policies, it is important to remember that, even though they are the most cost-effective, they will only pay out one time when the first of the joint policyholders passes away.

While this may be ideal for a couple with no living children and/or family, those with surviving beneficiaries will probably want to secure individual policies.