Two Thirds of Britons Don’t Have Life Insurance

Life insurance is a policy that pays a cash sum to your loved ones if you die during the term of cover, yet many UK adults say they do not hold one. Recent FCA work suggests a large share of UK adults still have no life cover at all.

The gap matters because many of those uninsured adults are parents, homeowners or the main earner in a household. If you are weighing up whether to arrange cover, the useful question is not whether “most people” have it, but what your own family would need if your income stopped. Free Price Compare arranges life cover with our protection partner LifeSearch, and we draw on FCA and Association of British Insurers publications to keep our guidance current.

Last updated: August 2026

Written by the Free Price Compare editorial team | Reviewed August 2026

Why do two thirds of Britons skip life insurance?

Two thirds of Britons skip life insurance mainly for three reasons: they assume it is unaffordable, they believe they do not need it because of savings or workplace death-in-service cover, and they simply put the decision off. Around 66% of UK people report having no policy, according to independent guidance research surfaced in March 2026, and the Financial Conduct Authority Consumer Panel discussion paper published in August 2026 suggests the true figure could be higher, with up to 71% of adults holding no life cover. Cost is often overestimated. Entry-level term premiums for younger, healthy applicants can be relatively low at major UK insurers, well below what many assume. The bigger risk is not price but leaving dependants exposed if the household loses an income.

Workplace death-in-service benefit is real cover, but it usually pays a fixed multiple of salary and stops when you leave the job. If it is your only protection, a job change or redundancy can quietly remove it. Understanding what life insurance actually covers is the first step to deciding whether you have a genuine gap.

What are the main types of life insurance in the UK?

The main types of life insurance in the UK are level term, decreasing term, whole of life and over-50s guaranteed-acceptance cover, and each suits a different need. Level term pays a fixed lump sum if you die within a set number of years and is popular for family protection. Decreasing term reduces its payout over time to track a repayment mortgage, so it usually costs less. Whole of life covers you until you die whenever that happens and is often used for estate or funeral planning. Over-50s plans accept you without medical questions but cost more per pound of cover.

• Level term: a fixed sum assured across the whole term, for example £200,000 over 25 years. See our guide to level term cover for how it works.
• Decreasing term: the payout falls each year, matched to a shrinking repayment mortgage balance.
• Family income benefit: pays a regular monthly income rather than a lump sum, which some families find easier to budget with. Our family income benefit guide explains the trade-offs.
• Whole of life and over-50s: lifelong cover, with over-50s plans offering guaranteed acceptance but a smaller sum assured.

It also helps to know the difference between life insurance, which pays out on death, and critical illness cover, which pays if you are diagnosed with a defined serious condition. Many policies combine the two.

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How much does life insurance cost in the UK?

Life insurance costs in the UK start from around £5 to £6 a month for basic level term cover for younger, healthy applicants, based on 2026 comparison data from major insurers including Aviva, Legal & General, Royal London and LV=. As a rough guide for a healthy non-smoker, expect to pay in the region of £8 a month per £100,000 of cover, based on quotes from FCA-authorised insurers published in early 2026. A healthy 35-year-old non-smoker taking £200,000 of level term cover may receive quotes that are still relatively low, depending on the provider and application details. Actual premiums depend on your age, health, smoker status, the sum assured and the length of the term, so quotes vary considerably between applicants.

Figures are indicative and may change. Average life insurance costs are skewed by older applicants and larger sums assured, so individual quotes vary widely. Claim-paid rates on individual term policies remain high across the industry, so cheaper cover can still pay out reliably when the claim is valid.

How much life insurance do I need if I’m single or have a family?

How much life insurance you need depends on who relies on your income and what debts you would leave behind, not on a single national figure. A widely used starting point is cover worth around 10 times your annual income, plus any outstanding mortgage, then adjusted for savings and existing workplace cover. A single person with no dependants and no mortgage may need little or none, beyond enough to clear debts and cover funeral costs. A family with children and a repayment mortgage usually needs enough to clear the loan and replace lost income for years.

• Clear the mortgage: match the sum assured, or a decreasing term policy, to your outstanding balance.
• Replace income: add cover to fund living costs for the years your children remain dependent.
• Cover debts and funeral costs: include credit cards, loans and around the cost of a funeral.
• Subtract what you already have: deduct savings and any death-in-service benefit from work.

Free Price Compare works with our protection partner LifeSearch to help match cover to real household needs rather than a generic multiple. If your main worry is losing your income to illness rather than death, it is worth reading about income protection insurance, which pays a monthly income if you cannot work.

Not sure how much cover you need?

Compare quotes and see what different sums assured cost each month.

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Is life insurance worth it, or a waste of money?

Life insurance is worth it if anyone would struggle financially when you die, and less useful if nobody depends on your income and you have no debts. The value is not in the monthly premium but in what your family avoids: a forced house sale, unmanageable debt, or years without your income. Because entry-level term cover starts from around £5 to £6 a month for younger, healthy applicants, the cost of protecting a mortgage or young family is often smaller than a single streaming subscription. Where it is poor value is over-insuring, paying for cover you do not need, or holding a policy long after the children have left home and the mortgage is repaid.

A common concern is that premiums are money paid for nothing if you never claim. That is how insurance works: you pay a modest sum to remove a large risk. The Financial Conduct Authority regulates the market, so policies must be sold clearly and claims handled fairly. If you already hold cover and think you were overcharged in the past, our note on refunds for overcharged policyholders is worth a look.

Can I have more than one life insurance policy?

Yes, you can hold as many life insurance policies as you like in the UK, and many people deliberately run more than one. A typical approach is a decreasing term policy sized to a repayment mortgage, plus a separate level term or family income benefit policy to replace lost household income. Splitting cover this way lets each policy do one job and can be cheaper and clearer than a single large policy. Each insurer will still ask about existing cover when you apply, and you must answer honestly, but there is no legal limit on the number of policies.

Layering policies also helps as your needs change. You might add cover when you have a child, then let a shorter policy expire once the mortgage is repaid. If you have ever had a policy cancelled by an insurer, you generally must declare that on future applications, so keep your paperwork. For homeowners specifically, it is worth understanding how life cover differs from mortgage payment protection insurance, which covers repayments if you cannot work rather than paying out on death.

Explore whole-of-life and term cover

Why is over-50s life insurance more expensive than term cover?

Over-50s life insurance is more expensive per pound of cover because it guarantees acceptance without medical questions, so the insurer prices in the higher risk of an older applicant. Current over-50s examples for £100,000 of cover are generally higher than standard term cover because acceptance is guaranteed and medical questions are usually not required. That is well above the cheapest term quotes because guaranteed-acceptance plans cannot decline you or load the price for poor health, and cover typically continues for life rather than a fixed term.

These plans usually pay a fixed lump sum aimed at funeral costs or a small legacy, and most include a waiting period, often one to two years, before natural-cause claims are paid. If you are in good health and under 50, a standard life insurance or life assurance policy will almost always give more cover for your money.

What affects your life insurance premium?

Your life insurance premium is set mainly by your age, health, smoker status, the sum assured and the term length, with your occupation and hobbies sometimes playing a part. Age and smoking have the largest effect: premiums rise steeply the later you apply, and smokers usually pay noticeably more than non-smokers for the same cover. A longer term and a larger payout both increase the monthly cost, while a healthy medical history can keep it low. Insurers may add a clause such as a waiver of premium, which keeps your policy running if you cannot pay due to illness.

• Apply younger: locking in level term cover early fixes a lower monthly price for the whole term.
• Be honest on health: non-disclosure is the most common reason valid claims are questioned.
• Choose the right term: match cover to when your dependants will no longer rely on your income.
• Consider adding critical illness: combined life and critical illness cover pays out on diagnosis of a defined condition too.

Digital consent tools are also speeding up applications: e-signatures on medical data consent mean underwriting can be quicker than it once was. Free Price Compare sources its guidance from FCA and ABI publications and arranges cover through our protection partner LifeSearch.

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• Refunds For Overcharged Life Insurance Holders
• Should I Get Income Protection Insurance?-Free Price Compare
• E-Signature Speeds Up Medical Data Consent | FreePriceCompare
• What is life insurance? – FreePriceCompare
• Life and Critical Illness Cover | FreePriceCompare

Information correct as of 18 August 2026. Prices, tariffs, policy details and providers change frequently, so please check the latest details before making a decision. This article is for general information only and does not constitute financial advice. Free Price Compare is authorised and regulated by the Financial Conduct Authority (FCA).