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Compare term life insurance

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What is term life insurance?

Term life insurance is designed to pay out a set amount of life insurance if you die during a pre-agreed period of time. The amount you’re covered for and the length (or term) of your policy is agreed when you take out the cover. If you die within the term of the policy, your beneficiaries should receive the agreed sum, provided you have kept paying your premiums. 

Term life insurance is one of the most commonly bought life insurance policies. Here’s how to find a plan that works for you. 

What does ‘term’ mean? 

The term is the amount of time your policy runs for. You’ll agree on this with your insurance provider before you take out the policy. With term cover, your beneficiaries should receive a payout if you were to die before the policy expires.  
However, it’s possible to receive a payout while you’re alive - for example, if you have terminal illness cover. Under this type of policy, you could be paid a lump sum if you’re diagnosed with a condition that means your life expectancy is less than 12 months, for example. 

What is term life insurance for?

 Many people choose to take out a policy to help others cover ongoing costs, like a mortgage. But it could be used to help pay off debts, cover funeral costs or to support your family if you were to die unexpectedly. 
Life insurance acts as a financial safeguard for the people you love, who might struggle financially if something should happen to you. If you’re the main breadwinner, think about how your family would cope without your income. 
Life insurance could also be useful even if you don’t earn a salary. For example, if you’re a stay-at-home parent, it could help with the burden of childcare costs.

What types of term cover are there?

The two types of term life insurance are level term and decreasing term.  

  • Level term – gives you a fixed amount of cover for as long as the policy is in place. A level term policy might be useful for paying off the outstanding capital on an interest-only mortgage, bills or other debts.
  • Decreasing term – the potential payout gets lower over time. Because of this, it’s typically cheaper than level term life insurance. The idea is that, if you die, your dependents will have enough to repay the mortgage or help cover living expenses. It gives you the reassurance that if the worst happens, your dependents will be able to stay in the family home. The length of decreasing term life insurance is usually the same as your mortgage, so you might want to consider this type of cover if you have a repayment mortgage.   

Frequently asked questions

Which type of term cover is best for me?

It depends on your circumstances and the type of financial burdens you want to cover. It could also depend on the type of mortgage you have. For example, decreasing term cover wouldn’t be suitable if you have an interest-only mortgage, as it wouldn’t cover the outstanding balance you need to pay back. 
If you don’t have a mortgage, level term cover could be used as a legacy pot for your family, or to pay off any other outstanding debts.  
Before you decide on which type of cover is best for you, work out what you want the pay-out to be used for.  

How much cover do I need?

You need to work out what expenses your family would have if you weren’t there. Think of any savings, investments and assets you’ll leave and weigh them up against the ongoing living expenses your family might have to face.  
If you have a death in service benefit as part of your employment package, factor this in when deciding how much you want your term cover to be.  
Our life insurance calculator is a good starting point to give you an idea of how much cover you might need.  

How long should my life insurance cover last?

That’ll depend on what you want the cover for. You could choose life insurance based on how long your children might need financial support if you were to die. Or you could take out cover that lasts as long as your mortgage. 

What happens if I die before my decreasing term policy ends?

If you die within the term of a decreasing term policy, and you’ve kept up repayments, then you should get a pay-out for your dependents. 

What happens when the term ends?

Hopefully, when the term of your policy comes to an end, you’re still alive and well. But it does mean that if you die after the policy expires, there won’t be a pay-out. If you still want life insurance once the term has ended, you’ll need to take out a new policy. 
If you have level term cover, you might be able to add a renewable option when you first take out your policy. This can only be added at the very beginning of a new policy, not once it’s active. It’s an optional add-on that lets you renew your cover when the time comes, instead of arranging a new policy. There’s no need to undergo another health check either. 
Just bear in mind that a renewable option is only available for level term policies and not all providers offer it.  

Are there policies that last for the whole of my life?

Yes. These are known as life assurance policies, or whole of life policies. Unlike term policies, these don’t expire. They tend to be more expensive than term insurance products.  
Learn more about whole of life insurance

How much could a policy cost?

There are a number of factors that will affect the overall price of your policy. These include:

  • Your medical history
  • Your lifestyle, including whether or not you smoke
  • Your job
  • Your age
  • The sum you want to be insured for
  • The policy length

A lot depends on your personal circumstances and lifestyle. Each insurance provider has a different way of looking at these factors, so you’ll find that quotes vary. That’s why it’s a good idea to shop around and compare different quotes.  

How can I find the right term cover for me?

Compare with us and we could help you find the right term cover at a price that suits you.  
Term life insurance doesn’t have to be expensive. On average, 51% of our customers could get a quote from £9.81[1] a month for cover up to £175K.  
Not sure about the type of cover you want? Give the friendly team at Lifesearch a call. They can offer expert advice and help you figure out what you need.  
Give them a call on 0800 072 1147 

[1] 51% of our customers were quoted less than £9.81 per month for their life insurance for a 10-year term, up to £175k worth of cover and no critical illness cover in March 2024.

What do I need to get a quote? 

To get a term life insurance quote, you’ll need to give us a few details, including:

  • Date of birth
  • Lifestyle habits, including whether you smoke
  • How long you want the cover for
  • How much cover you want 
  • The type of policy you want  

The list of quotes we send will also show you optional extras like critical illness, so you can choose whether to add them to your policy or not. 

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Why use Compare the Market? 

Get a quote in less than 4 minutes[2] 

[2] Correct as of March 2024.

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Author image Tim Knighton

What our expert says...

“Like any insurance, it’s crucial that you shop around before taking out life cover. Never assume that your bank or building society will offer you the best deal... Be completely honest in your answers to all the questions on the application, including your medical history, otherwise the policy could be worthless.”

- Tim Knighton, Life, health and income protection insurance expert

Page last reviewed on 16 JANUARY 2024
by Tim Knighton