Life Insurance by Region UK (2026)

Level term insurance is the most popular — it pays a fixed lump sum if you die within the term. Decreasing term insurance is cheaper and often used to cover a repayment mortgage, as the payout reduces over time to match your declining mortgage balance.

Consider your outstanding mortgage, other debts, years until your children are independent, and your family's annual living costs. A common approach is to cover your mortgage plus 10 times your income.

Life insurance payouts are not subject to income tax, but they may be included in your estate for inheritance tax purposes. Writing your policy 'in trust' keeps the payout outside your estate, avoiding IHT delays and charges.

It depends on your circumstances. If you have a mortgage, debts, or someone who relies on your income, life insurance is important. If you're single with no dependants or debts, it may not be essential yet.

Your age, health, smoking status, occupation, hobbies, and the amount and length of cover all affect the price. Smokers typically pay double the premiums of non-smokers.

Unlike term insurance, whole-of-life cover has no end date — it pays out whenever you die, as long as premiums are maintained. It's more expensive than term cover but is commonly used for funeral costs (typically £5,000–£10,000) or inheritance tax planning. Over-50s plans are a simplified version with no medical questions.

Yes, many insurers in the UK allow you to add critical illness cover to your life insurance policy. This additional coverage pays out a lump sum if you're diagnosed with a specified critical illness. Be sure to check the definitions and exclusions, as these can vary between providers.

Income protection pays a monthly income (typically 50–70% of your salary) if you cannot work due to illness or injury. Life insurance only pays out on death. Income protection is often overlooked but can be more valuable for working-age adults — it covers long-term sickness, which affects far more people than premature death.

If you miss a premium payment, your life insurance policy may enter a grace period, typically lasting 30 days. During this time, you can pay the outstanding amount without losing coverage. However, if payment is not made, your policy may lapse, and you could lose your benefits. Always check your policy terms for specifics.

Joint life insurance can be cheaper than two single policies, as it often offers a discount for covering two people under one plan. However, it only pays out once, typically upon the first death. If you want coverage for both individuals to pay out separately, two single policies may be more suitable despite a higher cost.