A simples guide

Is it cheaper to take out a life insurance policy while I’m young?

The simple answer to this question is yes it is likely to be cheaper to take out life insurance when you are younger because you are generally healthier and a lower risk for the insurer.

Why might you buy life insurance when you’re young?

Even as a young adult, there are likely to be reasons why you should take out some form of life insurance; Do you have a family, and would the family struggle if the worst happened and they no longer had your income to support their lifestyle? What about your mortgage – might that need to be covered? If this can’t be paid for would they have to leave your family home and deal with the grief of losing a loved one? Life insurance could offer you peace of mind that your loved ones would be taken care of and not have to worry about finances at such a difficult time.

How much cheaper can it be?**

Life insurance is based on a number of factors such as your age, your health, whether you’re a smoker or not and as well as things like how much cover you want and how long for. So all of these can contribute to the final price you could pay per month. But our research has shown the average price of a premium:

  • For a 20 year old is £8.19 per month.
  • At age 30, the cost rises to £13.75 per month.
  • 40 year olds pay on average £20.52 per month.
  • By age 50, the difference is more marked, costing £25.71 per month.

**Our average life insurance premiums are based on all our customer quotes for each age group stated, covering a mixtures of needs, personal circumstances, types and levels of cover. All average premiums are based on comparethemarket.com data from April 2015 to March 2016 where the customer has clicked through to buy from the life insurance provider. You may find a cheaper or more expensive quote based on your personal circumstances.


Will I need to do anything?

Some life insurance providers may conduct health underwriting on life insurance applications. Which could mean they need a report/letter from your doctor or you may need to go for a medical depending on the insurer. Even though you are young, insurers may also ask some questions about your lifestyle and medical history. Based on these answers, they can make a better decision about the cost of your premium or whether or not they want to insure you.

How long should I buy cover for and how much?

If you are buying life insurance to support your children (if you have any) if you were to pass away, then you may want cover to last until they are no longer dependent on your income , which may be at age 18, or at age 21 to 23 if they go to university. You may want to purchase cover for longer than this if you also want to ensure your spouse/partner would still be supported financially in the future.

In this instance, a good way of calculating how much cover you need is to work out the income your family would need and multiply this by the number of years your family would be dependent. So for example if your youngest child reaches 21 in 20 years’ time, and your family would need an additional £10,000 per year, you might want £200,000 of cover.

You may also want to buy life insurance to ensure your mortgage or a debt is paid off so that your family don’t have to worry about this.

In this case you should think about how much you owe and what the repayment period is set at and take out life insurance to cover this amount and time .

Life insurance is very personal to you and your family and can be tailored to suit your needs. We have a handy cover calculator that could help you work all of this out.

What else should I consider?

Other issues you should consider when buying life insurance include:
Do you want critical illness cover included? For a slight increase in your premium, your life insurance could also pay out a lump sum if you are diagnosed with one of a number of specified critical illnesses. These vary by provider so be sure to check which illnesses are covered.

If both you and your spouse/partner need life cover, check if it’s cheaper to buy a joint policy rather than two policies in single names. However, do make sure it’s right for you as if one of you does pass away a joint policy will end after one pay out. And in the worst case scenario, if you were both to pass away together, again there would just be one pay-out instead of two – so make sure that this would not leave your family in a difficult position.

If you smoke, or have used any tobacco product in the last 12 months, your premium may be higher than a non-smoker, and you’ll have to let the insurance provider know or your policy will be invalid.

Do you have death-in-service cover at work, and how much is this? If you have this benefit, it could reduce the amount of life insurance you need, but remember it may not cover all of your requirements and does stop when you leave an organisation.

So if you think it might be the right time to take out a life insurance policy, why not start a quote and see how little your premium could be.

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