When should I get life insurance?

Term life insurance is the most common type of life insurance – it lasts for a set number of years, known as the ‘term’. 

Depending on your circumstances, you might want a life insurance that goes towards paying off your mortgage if you die, decreasing term life cover could be a good option for this as the cover is designed to decrease over time, much like a mortgage. 

If you want a policy that leaves a specific lump sum to your loved ones if you die within the term, then level term life cover might be good for you as the cover amount you choose will stay the same throughout the policy term.

Alternatively, you might choose increasing term life insurance where your payout increases in line with inflation, but your premiums tend to increase as well.

There’s Whole of Life insurance too, which insures you for the whole of your life with no fixed term.

And of course all of these can be taken out as a joint life insurance policy which is usually cheaper than buying two policies, and you'll only have one premium to pay each month.

So those big life moments tend to be a good time to get life insurance which all sounds quite sensible, however there are one or two other factors we think you should consider too.

While you might not have the commitments that normally compel us to get life insurance, and because the common special life events like buying a home and having children are generally happening later in our lives ^{Footnote [1]} - it’s natural to take the ‘I’ll wait’ attitude to life insurance.

But because life insurance is based on your age when you apply, it means the younger you are, the cheaper the monthly premiums, if you buy a policy in your 20s you’re likely to pay much less.

While there isn’t really a specific age or time to take out life insurance it’s worth thinking about the scenarios that make us think about starting a policy. 

Picking up the keys to the first property you own is a real milestone for many of us and often the first serious financial commitment you make. Some people buy life insurance at this point to make sure the mortgage is paid off if you die before the end of the mortgage term, especially if you’re buying with a partner.

You’ll pay monthly premiums and you can choose the cover to run for the same amount of time as your mortgage. This is particularly important if you’re the main breadwinner and it’s your salary that pays the mortgage.

When you have that first baby you might be flooded with love and emotion and feel determined to protect them at all costs. 

Having children means you now have people that are dependent on you and often your income too, so making plans to support them financially if the worst was to happen, is very common at this stage in life.

A life insurance policy can provide your partner with a lump sum when you die that they can use to pay for things like the mortgage or loans, and general living costs.

Regardless of the age of your family, you may be looking for peace of mind that they’ll be able to maintain their current lifestyle without your income if you were to die. 

We offer level cover life insurance, also called family protection, that can help pay off an interest-only mortgage, or funeral, and living costs for your partner and children. The cover pays out a lump sum if you die during the policy term.

If you were to die without money reserved to cover your funeral costs then your loved ones may have to shoulder the financial burden at an already difficult time. A lump sum payout from your life insurance can be used to cover the cost of your funeral.

Aside from your age which has quite a bearing on the cost of your life insurance premium, there’s a few other things insurers take into consideration too:

• Your occupation – the insurer will need to know what you do for a living. Whether you’re a stunt man, or a librarian - some jobs are more high risk than others.
• Your lifestyle – this could relate to past or future travel, alcohol consumption or recreational drug use.
• Whether you’re a smoker – smokers are more likely to have health problems than non-smokers.
• Your health – the insurer will take into account relevant medical history, whether past or present.
• Your family medical history – you’ll need to tell the insurer about a family history of conditions that can be inherited.
• Your hobbies – some activities can carry an additional risk depending on the standard and frequency at which they’re practiced.

These are some of the things you declare when taking out your policy and it’s important to be as accurate as you can be so not to jeopardise receiving a payout in the future. 

There’s one other factor to consider as well, and that’s inflation. The cost of living, including energy prices, fuel costs, food, clothes, and holidays all rise over time and this is inflation. And it means the lump sum value of your policy now, won’t go as far in the future as everyday items will usually cost more to buy in years to come.

So for example, if you’ve insured £100,000 of cover over a 25 year term, it won’t buy you as much in 2048 as it would today! ^{Footnote [2]}

When taking out a life insurance policy, once you’ve decided how much cover you need based on your mortgage, other financial commitments and living costs you want to cover, you can opt to protect against rising inflation as well. Your monthly payments will be reviewed annually and may go up – but so will your potential payout if a claim was to be made.

Our easy to use calculator lets you model different cover amounts and makes it simple to get the right cover for you. ^{Footnote [3]}

If your policy still has a few years to run as you turn 50, you don’t need to do anything, just carry on paying the premiums. But if you took out your policy at a younger age or have decreasing term life insurance linked to your mortgage, you may find your policy is coming to an end as you near retirement age. 

The good news is there are plenty of dedicated over 50 life insurance policies that let you leave money for loved ones after you’ve gone. Alternatively, you can take out another term life insurance as the maximum age to start a policy with Aviva is 77.

We offer over 50 life insurance as a ‘whole of life’ cover which means it will protect you for the rest of your life rather than a set term. If you’re between 50 and 80 and a UK resident, the premiums will stop after 30 years or the policy anniversary following you 90th birthday, but the cover will continue at no cost to you.

What you pay each month will stay the same, and some people like to use the payout to help pay funeral expenses or give their family a small windfall.

It’s never too late, although most policies are designated for you up until 80 years old. It’s true that it becomes more difficult and expensive to begin a life insurance policy as you enter your twilight years but for many of us it’s worth paying a little extra for the peace of mind of having a policy in place.