When should I get life insurance?
From the types of life insurance to what factors go into premiums, explore what life insurance may mean for you.
When life’s big moments happen, like starting a family or buying your first home, your thoughts may drift to life insurance.
And while you may know that life insurance gives some level of financial protection for family if the worst happens, you may feel overwhelmed with what’s available. Or, more importantly, you might not be sure which policy best suits your needs.
What sort of life insurance should I get?
This depends on what would benefit you and your family most. But here are the most popular options:
- Level term life insurance lasts for a set number of years. This may be an option if you'd like the cover amount you choose to stay the same throughout the policy term.
- Decreasing term life insurance is available if you'd like a policy to help pay off the mortgage if you die. Although it's not limited to paying back the mortgage. It could also help with debt repayments. As it's designed to decrease over time, it can also be a cost-effective option.
- Whole of life insurance covers you for the whole of your life with no fixed term such as an over 50 life insurance policy.
For most types of life insurance, you can take it out as a joint policy. Doing so can be cheaper than buying two policies and you'll only have one monthly premium to pay. However, another way would be to each take out a separate policy. So when there’s a pay out for one person their policy will end – but the second person’s policy will continue. The cost of two policies will generally be higher than a joint policy.
These policies don’t accumulate cash in value, and have no savings or investment element. If you choose to cancel or the policy ends, you won’t receive any payout. They will only pay out once, and, if you stop payments, your cover ends.
To learn more, check out our article that explores different types of life insurance in greater detail.
How much life insurance do I need?
How much life insurance you need will depend on how much your family will need to live on, to help pay off the mortgage (alongside any other debts) on your death.
Figuring out these costs may feel overwhelming, and it may be worth checking out our life insurance calculator, but there are life moments that can help you figure out how much life insurance cover you’ll need.
When should I get life insurance?
When buying a home
Buying a home can be as intense as it’s exciting. And as you’re planning everything from home décor to meeting your neighbours, it’s worth finding time to explore your life insurance options.
Taking out decreasing term life insurance, for example, could give you confidence that your mortgage will be paid off if you die before the end of the mortgage term.
You can choose the cover to run alongside the term of your mortgage and pay a monthly premium, either on your own or jointly with your partner. Finding cover that meets your needs is particularly important if you’re the main earner whose salary pays the mortgage.
If you have an existing mortgage, more than one mortgage, or in the process of re-mortgaging, it’s important to check your repayment plan for helping you calculate how much life insurance you’ll need.
When starting a family
Starting a family may involve a whirlwind of emotions, planning and practicalities.
For some, this life moment lends itself well to thinking carefully about how best to protect a growing family. And although your to-do list may seem endless (it probably is), exploring life insurance could be an important step to protecting your family's financial future.
Depending on the type of cover, like level term life insurance, your policy could give your loved ones a lump sum when you die. This could help them pay for the mortgage, loans, and general living costs.
When calculating how much life insurance you may need, having a solid grasp of your family's monthly living costs (now and those projected in the future) could help you choose the right cover.
When family rely on your income
Whether you're welcoming new members into your family or encouraging them to fly the nest, ensuring their financial stability when you die could help lessen their hardships.
And while family dynamics shift over time, you may want confidence to know that those who depend on your income could help to keep their current lifestyle if you've passed away.
Exploring our level term life insurance, also called family protection, may give you confidence in your family's future as it can help pay off:
- an interest-only mortgage
- loans and debts, outside of your mortgage
- funeral costs
- living costs for your partner and children
Also, a working estimate of each of these costs can form part of your strategy when you’re working out which life insurance policy best covers your needs and how much you'll need. Level term life insurance and decreasing cover, for example, pays out a lump sum if you die during the policy term.
When you’re worried about the cost of your funeral
Although prices range, a funeral may cost in the thousands. The risk of dying without money set aside to cover these costs is that family (and friends) may have to shoulder the financial weight of the funeral during an already challenging time.
But having life insurance in place means that a lump sum payout could be used to help cover these costs. And although it may be troublesome, thinking about your funeral arrangements for the future may help you factor in costs for how much life insurance you'd need.
What can affect the cost of life insurance?
All insurance products have factors that impact premiums.
These can include (but aren't limited to) your:
- age - this is a big one. Generally, life insurance premiums are less expensive for younger people (looking at you 20 somethings) because they're expected to live longer and less likely to be ill. So, the longer you wait to get life insurance, the more expensive it may be.
- lifestyle - how you live may impact your insurance premiums. They may look at whether you travel extensively, how much alcohol you drink and whether you use recreational drugs. Smoking is another factor insurers will consider since smokers are more likely to have smoking related health issues than non-smokers. And, as part of your lifestyle, insurers may also be curious about your hobbies. Some activities, like extreme sports, carry additional risks depending on how (and how often) they're practiced.
- medical history - insurers will likely review your medical history, past and present, for any pre-existing condition. They'll also review your family's medical history, for any inherited medical concerns.
These are some of the things you'll declare when taking out your policy. And it's important to be accurate and truthful - any inconsistencies could put at risk receiving your payout in the future.
What about inflation?
As you sit at the kitchen table, trying to balance your budget, you may have noticed your bills increasing. One factor that can affect your life insurance is inflation.
This challenge of managing your budget may continue over the years. Inflation causes the cost of living – including energy prices, fuel costs, and everyday essentials like food and clothing – to rise over time. This means that the lump sum value of your policy today might not have the same purchasing power in the future. In other words, £100,000 today may not buy as much in 2049 as it does in 2025.
With most life insurance policies, you have the option to increase your cover amount in line with inflation. This way, the lump sum amount retains its value over time. However, this may also mean that your monthly payments will increase.
Do I need to change my life insurance when I turn 50?
Whether you took out your insurance policy at a younger age or have decreasing term life insurance, you may find that your policy is ending as you near retirement age.
If your policy still has a few years to go as you turn 50, then simply carry on paying your premium.
But if you're at the end of your life insurance term and need a new policy, there are dedicated life insurance policies for over 50s. You could also take out a further term life insurance policy with Aviva before you're 78 years old.
Our over 50 life insurance is offered as 'whole of life' cover, which means it will protect you for the rest of your life rather than a set term. If you're a UK resident aged between 50 and 80, your premiums will stop after 30 years or the policy anniversary following your 90th birthday. The cover will continue with no cost to you.
Be aware that over 50 life insurance can't be taken out on a joint life basis. Depending on how long you live, you could pay more in total premiums than the total cover amount. There is no cash in value at any time. The cover amount is fixed and inflation can reduce its value over time.
Next article
Pre-existing medical conditions and life insurance
From the application process to premiums, here’s what you need to know.
Related articles
