The average cost of life insurance has fallen in recent years thanks to a number of factors including increased competition, advances in medical science and streamlined application processes. Whether you need life insurance to cover your mortgage or replace your income for your dependents so that they can maintain their lifestyle, you may wish to stick to a budget and limit how much you spend on it.
In this article, we explain how much life insurance cover you can get based on a £10 per month budget as well as where to buy it. We also explain how you can get up to £100 cashback*.
What are the different types of life insurance?
Life insurance provides a lump sum of money that you can leave to your intended beneficiaries if you die before the specified end date of your policy - often referred to as the policy 'term'. There are many different types of life insurance; mortgage life insurance may decrease in line with a loan or repayment mortgage, some life insurance policies are designed to increase with inflation, and some will end on a specific date (with no payout if you survive the policy term) while other policies continue for the whole of your life (paying the agreed sum of money when you eventually die).
For a more detailed explanation of the different types of life insurance, read our article "Types of life insurance explained".
For the purposes of this article, we focus on the most popular type of life insurance known as 'Level term assurance', which pays out a guaranteed sum of money in the event of your death within the agreed policy term.
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How long do I need life insurance cover for?
For most people, the length of the policy is simply determined by the reason they need the insurance. For example, those wishing to cover an outstanding loan on their property will usually choose a policy term that matches the years remaining on their mortgage. Those looking to provide protection for their families would usually choose a policy term that sees their youngest child into adulthood.
Working out how long you need life cover for
| Reason for life insurance | How to work out the length of life cover needed^ |
| Mortgage |
|
| Family |
|
| Debts |
|
| Inheritance tax |
|
| Funeral costs |
|
^this is guidance to get you started and you may need to consider your personal circumstances
We provide a more detailed explanation of life insurance and how to choose the right policy term in our article "How long should I take out life insurance for?". But as a guide, the longer the policy term the more expensive it is.
How much life insurance can I get on a £10 per month budget?
The table below provides a guide as to how much life insurance you can get based on a premium of £10 per month. For the purposes of the quote, we have assumed that the individual is a healthy non-smoker of varying age with a policy term of 20 years. You can see from the figures that a 25-year-old can get 15 times more life insurance cover than a 55-year-old, based on a £10 per month premium. In other words, the younger you are when you buy life insurance, the more you can get.
| Age | Premium | How much level term life insurance can you get for £10 per month? | Insurer |
| 25 years old | £10 per month | £500,000 | Legal & General |
| 30 years old | £10 per month | £355,000 | Legal & General |
| 35 years old | £10 per month | £250,000 | Aviva |
| 40 years old | £10 per month | £150,000 | Vitality |
| 45 years old | £10 per month | £95,000 | AIG |
| 50 years old | £10 per month | £60,000 | Vitality |
| 55 years old | £10 per month | £30,000 | Vitality |
| 60 years old | £10 per month | £18,000 | Scottish Widows |
- Quotes based on a 20-year policy term and on the assumption that the individual is healthy and does not smoke
- Level life cover means the cover amount will remain the same for 20 years (Decreasing term life insurance costs less so the level of cover for £10 will be higher)
- Level life cover will usually include terminal illness cover so that it pays out early if the insured person has less than 12 months to live
If you have a health condition or partake in a dangerous sport or occupation you may have to pay more if the insurance company considers you a higher risk. In almost all cases, once you have applied and received an offer of life insurance, you can ask the insurer to reduce your monthly premium to your budget of £10 or any other amount that suits you. Your cover amount which is usually referred to as the sum assured will be reduced and adjusted to suit your budget.
Which life insurance company offers the most life insurance cover for £10 per month?
There is not one specific life insurance provider that offers the most life insurance cover for £10. Life insurance costs are tailored to each individual and their specific medical and personal circumstances. In addition, life insurance companies are constantly changing their monthly premiums so it is always best to shop around to ensure you get the most amount of life insurance cover for your money.
It is also important to consider what level of cover you need as a young person with no health problems may not even need to spend £10 per month for the amount of cover they need. Average life insurance costs increase with your age but if you start a policy when you are young, you can fix the price for 20, 30 or 40 years depending on your requirements. Although there are some life insurance calculators online that can work out the level of cover that you need, they should only be used as an indicator as they don't allow for your unique circumstances and priorities.
We would recommend that you speak to an independent life insurance specialist* as they have access to the whole of the market and will be able to run the comparison quotes on your behalf and provide you with advice as to which company is best and why to give you peace of mind. They can also discuss other personal insurance that you may wish to incorporate such as critical illness cover.
Additionally, if you contact the insurance specialist via the link above, you will qualify for up to £100 cashback when you take out a policy. Simply click on the link and complete the short form to get a callback at a time that suits you, with no obligation to take things further.
If a link has an * beside it this means that it is an affiliated link. If you go via the link, Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. The following link can be used if you do not wish to help Money to the Masses and do not wish to qualify for the cashback referred to in the article - LifeSearch
