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How much does life insurance cost?

Life insurance might seem like another monthly out-going cost that you could do without, but it can make a huge difference when the unthinkable happens, and it’ll give you peace of mind knowing that you’ve protected the ones you love.

What affects the cost of life insurance?

The cost of life insurance is determined by a variety of factors and so there isn’t an average cost to get covered.

Everyones’ situation is different, a life insurance calculator can help you get an idea of how much money your family may need if you were no longer around to provide for them.

Whilst there are many influences, here are five key factors that can impact the cost of life insurance:

1. Cover you require

How much cover you need depends on whether it’s a single or joint policy, your lifestyle and the stage of life you’re in. Your cover is the cash benefit your beneficiary or beneficiaries will receive if you pass away.

2. Policy type

There are two main types of life insurance, term and whole of life. Term insurance is cover for a set period of time, whilst whole of life is cover for the rest of your life.

3. Policy length

Also known as policy term, this is the length of time the policy will cover the insured person for, usually between five and thirty years for term or the whole of your life for whole of life cover.

4. Your age

Life insurance gets more expensive the older you get so it’s worth getting life insurance early on.

5. Your health and lifestyle

This includes a variety of factors, from whether you’re a smoker, to your family medical history, alcohol consumption, weight, occupation and fitness. Be prepared to answer a range of questions and have a medical exam.

Other factors that could affect the cost of life insurance include where you live, gender, your financial situation and your dependants.

If you want to reduce the cost of life insurance, it’s usually a good idea to take it out as early as possible, which is why life insurance for 30 year olds is popular, especially for those who have young children.

You could also get cheaper life insurance if you improve your health such as quitting smoking or losing weight, however this doesn’t happen overnight. Insurers will look at your lifestyle history, so you need to have made stable and long-term lifestyle changes to get the cost of your life insurance down.

mum writing in a notebook with her children

What is the cost difference between term and whole of life insurance?

There is usually a significant difference in the cost of term and whole of life insurance. Whole of life insurance is generally more expensive because a cash value builds up, and you’re paying for cover for the rest of your life, rather than for a set period of time like term insurance.

You can also buy whole of life insurance with no medical, which again, is more expensive but worth getting if you’re not in good health.

Term life insurance gets more expensive when you add critical illness cover to your policy because it pays out a cash lump sum if you are diagnosed with a critical illness.

There are different types of term life insurance and policy add-ons that can increase the cost of your life insurance, including critical illness cover, terminal illness cover and waiver of premium.

Terminal illness cover is often confused with critical illness cover in that people think they’re covered for critical illnesses but in fact their cover is for a terminal illness, which is very different.

A terminal illness is where the someone has been diagnosed with an illness that will lead to death. Terminal illness life insurance cover usually pays out if the person has less than 12 months to live.

Critical illness cover however pays out a fixed amount if you are diagnosed with a defined illness listed in your policy documents. The payout is usually less than your insurance cover if you were to die but can be helpful if you are unable to work or need to pay for treatment because of your critical illness.

Waiver of premium is a type of cover where the cost of your premiums are covered when you are unable to work due to a serious injury or illness.

The cost of both types of life insurance can differ greatly but there’s not a straightforward answer as to which policy type would be right for you.

Your decision should be based on your personal circumstances and the financial needs of your beneficiaries, as they are who you are protecting by taking out life insurance.

dad looking at his phone with his children

Tips for getting life insurance costs down

Getting the right life insurance in place is important but that doesn’t mean you have to choose the most expensive policy.

With so many different life insurance providers and policies available, we’ve compiled some top tips to help you get cheaper life insurance:

Shop around

Get a few different quotes and consider how much life insurance you need. Compare the policies you find and don’t be afraid to ask the providers questions, especially about the terms and conditions.

Get covered early

The earlier you take out life insurance the cheaper it’ll be, so get a good price early on and you should find yourself paying less in the long run.

Consider your lifestyle

If you’re thinking about getting life insurance to protect your family, whether that’s now or in the future, you should think about your lifestyle choices and how they can have a signifcant impact on the cost of life insurance.

Talk to a professional

To help you get the right type of life insurance and level of cover, it can be worth speaking to a financial advisor. A good financial advisor can not only save you money but also put your mind at rest that you’re making an informed decision.

Taking out a life insurance policy is an important decision because it involves protecting those you love the most.

The cost commitment is substantial so you should always do your research and make you understand everything before going ahead and taking out a policy.

If you’re aged 50-85, and think you need life insurance, SunLife offer affordable over 50 life cover with a guaranteed cash pay out for loved ones.

SunLife offers a range of straightforward and affordable products including over 50s life insurance, funeral plans, equity release, pet insurance, car insurance, home insurance, ISAs and Will writing services.

Here's the information that you need to know about who we are and the other companies that we work with in order to provide our products and services.

Who are SunLife?

Phoenix Life Limited trades as SunLife and is the provider of the Guaranteed Over 50 Plan, SunLife Insurance and the life insurance policy payment option for Funeral Plans. Phoenix Life Limited’s registered office is at 1 Wythall Green Way, Wythall, Birmingham, B47 6WG (registered in England, no. 1016269). 

SunLife Limited distributes financial products and services and is a company limited by shares, registered office: 1 Wythall Green Way, Wythall, Birmingham, B47 6WG (registered in England, no. 05460862). SunLife Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register (registration no. 769427).

You can contact us by post at SunLife, PO Box 1395, Peterborough, PE2 2TR or by phone on 0800 008 6060.

If you choose to add Funeral Benefit Option to your Guaranteed Over 50 Plan, Dignity Funerals Ltd arranges and provides the funeral services, registered office: 4 King Edwards Court, Sutton Coldfield, West Midlands, B73 6AP (registered in England and Wales, No. 00041598). Dignity Funerals Ltd is a member of the National Association of Funeral Directors.

Who provides the Funeral Plans?

Dignity Funerals Ltd arranges and provides the funeral services, registered office: 4 King Edwards Court, Sutton Coldfield, West Midlands, B73 6AP (registered in England and Wales, No. 00041598). Dignity Funerals Ltd is a member of the National Association of Funeral Directors.

The life insurance policy that pays for your funeral will be provided by Phoenix Life Limited, trading as SunLife.

Who provides My Smarter (ISA)?

My Smarter (ISA) is provided by Scottish Friendly Asset Managers Limited. Authorised and regulated by the Financial Conduct Authority. Details can be found on the Financial Services register, registration No. 188832. Member of The Investment Association. Registered Office: Scottish Friendly House, 16 Blythswood Square, Glasgow G2 4HJ.

Who provides the Will writing services?

Hugh James is authorised and regulated by the Solicitors Regulation Authority (SRA Number:303202).

The information contained on this website is based on Hugh James' understanding of the law of intestacy in England and Wales only as at April 2014. The law in Scotland and Northern Ireland is significantly different. This is for information purposes and is not intended to be legal advice.

Who provides Family Life Insurance?

SunLife Family Life Insurance is provided by Scottish Friendly Assurance Society Limited which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Details can be found on the Financial Services register (registration number 110002). Registered Office: Scottish Friendly House, 16 Blythswood Square, Glasgow G2 4HJ. 

Who provides SunLife Pet Insurance

SunLife Pet Insurance is arranged and administered by BDML Connect Limited. BDML Connect Limited is authorised and regulated by the Financial Conduct Authority (No. 309140). Registered in England and Wales Number 02785540. Registered Office: 45 Westerham Road, Bessels Green, Sevenoaks, Kent, TN13 2QB.

Who provides SunLife Home Insurance

SunLife Home Insurance is arranged and administered by BISL Limited and underwritten by a panel of insurers. BISL Limited are an intermediary authorised and regulated by the Financial Conduct Authority. Registered in England no. 03231094. Registered office Pegasus House, Bakewell Road, Orton Southgate, Peterborough PE2 6YS.

Who provides SunLife Car Insurance

SunLife Car Insurance is arranged and administered by BISL Limited and underwritten by a panel of insurers. BISL Limited are an intermediary authorised and regulated by the Financial Conduct Authority. Registered in England no. 03231094. Registered office Pegasus House, Bakewell Road, Orton Southgate, Peterborough PE2 6YS.