Do I need life insurance?
Key takeaways
Life insurance provides financial support for loved ones after your death
Consider your financial situation and number of dependents when choosing cover
The life insurance cover you need is a personal decision influenced by factors such as income, mortgage size, and family expenses
Who is life insurance most useful for?
Life insurance is most useful for people who have financial dependents or significant debts that would create a burden if they died unexpectedly.
There is no legal requirement to take out life insurance, but most people can benefit from putting some sort of financial protection in place:
Homeowners with a mortgage
If you have a mortgage, life insurance ensures that the loan can be repaid if you die, allowing your partner or family to keep the home without financial strain.
People with dependents
If you have children, a partner, or other relatives who rely on your income, life insurance provides money to cover living costs, childcare, education, and daily expenses — helping maintain their standard of living.
Couples with shared finances
Even if you don’t have children, many couples share rent, bills, or other debts. Life insurance can help your partner continue paying these costs without struggling.
Self-employed people or business owners
If your income isn’t covered by employer benefits, life insurance can replace lost income or protect your business interests for your family or partners.
Anyone wanting to cover final expenses
Even for those without dependents, a small policy can help cover funeral costs or outstanding debts, easing the financial stress on loved ones.
This video information is available as a Text Transcript
What type of life insurance should you consider if you decide you need it?
There are several different types of life insurance to suit various needs and budgets. Here's a quick rundown:
Level term life insurance
With this version, you decide how much cover you need at the beginning of the policy, and both premiums and the payout remain constant for the duration of the policy. It may be an option worth considering if you have children who depend on you financially. The downside is that it can be more expensive than other types, plus payouts may not be adjusted for inflation
Decreasing term life insurance
With this option, the amount paid out when you die goes down over time. It is commonly taken out to cover a repayment mortgage, with the payout decreasing over time in line with your mortgage balance. Premiums are generally cheaper than for ‘level term insurance’ and for some, it can be a cost-effective option
In the past three months (between January and March 2026, 36%
Increasing term life insurance
The potential payout rises every year by a fixed amount for the duration of the policy, helping to protect against inflation. This means higher payouts, but also makes it more expensive than level or decreasing term insurance
Our guide on life insurance policy types can help you decide which is most suitable for your circumstances.
When should you take out life insurance?
The best time to look for a policy is generally when you take on some form of financial responsibility.
For example:
When taking out a mortgage
A mortgage is a significant financial burden. Ensuring that their partner isn’t left to shoulder this alone is a key motivation for many people taking out life insurance.
A mortgage life insurance policy, or equivalent policy that would go towards covering mortgage costs can help surviving occupants of the house pay off the mortgage, ensuring that your family can stay in their home if you die.
When becoming a parent
If you have children, you should think about what their financial situation would be if you were to pass away. This is particularly important when children are young and depend on you financially.
An estimated 46,300 dependent children (aged 0-17) are bereaved of a parent each year. That’s 127 children newly bereaved each day.
A term (or “level term”) insurance policy could be a strategic choice, with the term set to cover the years you expect to be the primary provider.
When planning for the future
It’s also important to consider whether you may start a family in the future. Generally, life insurance policies are cheaper for young people meaning that purchasing a policy sooner rather than later could be a financially savvy move, whether that’s single or joint life insurance.
Premiums tend to be higher for older policyholders, so it may be wise to lock in a policy earlier in life.
How much does life insurance cost?
The price of your life insurance will vary, depending on which policy you choose and personal circumstances including your age and smoker status.
Policy Type | Average Cost |
|---|---|
Level term | £22.73 |
Decreasing term | £22.31 |
Remember that the cheapest option won’t necessarily be the best choice for you – always make a decision based on which product suits your needs.
How much life insurance cover do I need?
The amount of life insurance cover you need is a personal decision, influenced by factors such as income, mortgage size, and family expenses.
Our life insurance calculator can help you estimate the cover necessary to protect your loved ones.
How do I find the right life insurance policy?
MoneySuperMarket offers a platform to compare deals from UK life insurance providers, ensuring you find a policy that fits your needs and budget.
Frequently asked questions
Can I get life insurance if I have a pre-existing condition?
Having pre-existing conditions might affect your premiums, but won’t usually prevent you from obtaining cover. Insurers will ask about any pre-existing medical conditions you may have. It's crucial to be honest about your medical history to ensure your policy is valid.
Why do people not take out life insurance?
People often delay purchasing life insurance because they believe it is unnecessary if they are young and healthy. Additionally, some may not see the immediate need if they do not have a family or dependents, or might be prioritising other financial responsibilities.
Even if this applies to you, it might still be worth considering life insurance. Remember, the younger you are when you take life insurance out, the cheaper it tends to be – our data suggests that the average cost of life insurance for those aged 18-49, at £20.88
Do I need life insurance if I have a pension?
Having a pension does not necessarily mean you don't need life insurance. While a pension supports you during retirement, life insurance is meant to provide financial support to your dependents after your passing. Whether you need life insurance depends on your specific situation, such as having dependents, a mortgage, or other debts.
Is life insurance mandatory in UK?
No, life insurance is not mandatory in the UK.
How do I pay for my life insurance policy?
Life insurance premiums are typically paid monthly via direct debit. The cover amount you choose will influence the cost of your premiums.
Upon your death, beneficiaries can receive a lump sum or monthly payments. Some whole-of-life policies have an investment element, which can be accessed while you're alive, but it's advisable to seek professional advice before doing so.
Who doesn’t need life insurance?
If you're single with no dependents, or your partner and dependents are financially secure without your income, buying life insurance might not be necessary.
Other types of protection products (such as income protection or critical illness cover) may also be a more suitable product for some people than life insurance. These policies help you manage living costs if you’re unable to work.
Do I need life insurance for a mortgage?
It is not a legal requirement to have life insurance for a mortgage.
However, some lenders might ask for a mortgage life insurance policy to be in place. This type of policy is designed to help survivors pay off the mortgage and other expenses in the event of your death.
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Collette Shackleton
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Collette Shackleton is a highly skilled Content Writer who has over nine years’ experience creating helpful and engaging personal finance content for consumers. Collette shares her experience as a...
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Katie Bishop
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Katie Bishop is an author and journalist with a decade of writing and editing experience. She has previously worked as an economics editor at Oxford University Press, and her business and finance...
