Direct Line is largely known for car insurance but it does offer life insurance products. Like its other insurance products, Direct Line's life insurance products do not appear on comparison sites. That means the only way to obtain a life insurance quote is through the website or over the phone. But is it worth the extra effort to contact Direct Line to get a life insurance quote? In this article, I look at the different types of life insurance offered by Direct Line, how much these cost and how they compare to the rest of the market. I also explain why it may be worth speaking to a life insurance specialist*, for free, before making a decision.
About Direct Line
Direct Line started out providing car insurance in 1985. Over the years, the business has extended to provide other insurances such as Home, Pet, Travel, Business and Life insurance. Today, Direct Line is one of a number of brands like Green Flag, Churchill and Privilege that sit within the Direct Line Group.
Direct Line's Life Insurance with Critical 3 is a 5 star Defaqto rated product while the Decreasing Life insurance product received a 3-star defaqto rating. The Over 50s life insurance receives a 5-star defaqto rating
Direct Line life insurance
Unlike some of the other insurances provided by Direct Line, the life insurance is underwritten and provided by AIG Life Limited UK which is the UK life insurance arm of AIG, Inc. The life insurance policies are priced to include the commission that AIG pay to UK Insurance Business Solutions, the regulated company through which business is transacted when you buy your life insurance with Direct Line.
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Types of life insurance you can buy with Direct Line
Direct Line offers four solutions to suit the most common requirements of those seeking life insurance. The policies are designed to protect families, mortgages and funerals The four policy types available are:
- Level Term Assurance
- Decreasing Term Assurance
- Critical 3 Illness Insurance
- Over 50s Life Insurance
Direct Line offers a £10,000 advance payment on life insurance claims if your term life insurance claim has been agreed upon but is held up for legal reasons so that you can receive this sum of money in as little as five days.
Direct Line Level term assurance
This is life insurance that maintains a consistent level of insurance over a specific period of time and if death happens before the policy expires, the sum insured is paid out. This type of policy is most commonly used to provide a benefit to the deceased family and/or to pay off debts. The cost of the policy remains the same throughout the policy term. Direct Line's policy includes a terminal illness benefit (which is an industry-standard) that will pay the death benefit early if the policyholder is deemed to have less than 12 months to live by a medical consultant.
Direct Line Decreasing term assurance
This is reducing life insurance that is specifically designed to protect a repayment mortgage where the level of insurance reduces in line with a repayment mortgage. The policy has a built-in guarantee to pay off the remaining balance of a repayment mortgage as long as the amount and the number of years match the mortgage when the policy starts. The cost of the policy is usually lower than that for a level-term policy and it does not change during the life of the policy making it easier to budget for. Direct Line's policy also includes a terminal illness benefit so the death benefit can be paid early if the policyholder is deemed to have less than 12 months to live by a medical consultant.
Direct Line Critical 3 Illness Insurance
AIG provides unique serious illness insurance that pays out your chosen level of insurance as a lump sum if you were diagnosed with cancer, heart attack or stroke (subject to specified severities). You must survive for at least 14 days after your diagnosis to make a valid claim. If instead, death occurs before this time period then the death benefit would be paid. This type of insurance can be added to either a level or decreasing term insurance. There is an additional cost for this and it remains the same throughout the term of the policy. If you make a claim on the Critical 3 Illness policy, your life insurance will be unaffected and will continue to provide you with protection against any future death or terminal illness. The Critical 3 Illness Insurance is removable at any time but cannot be reinstated once it is removed.
Although this illness insurance may seem like it protects far fewer illnesses than a traditional critical illness cover policy (i.e only 3 conditions), it is worth noting that the majority of claims (upwards of 70%) made on traditional critical illness policies are for these 3 illnesses (cancer, heart attack or stroke).
Direct Line life insurance and critical 3 illness summary
| Level Term Assurance | Decreasing Term Assurance | Critical 3 Illness Insurance | |
| Min age at entry | 17 years old | 17 years old | 17 years old |
| Max age at entry | 75 years old | 75 years old | 75 years old |
| Max age at expiry | 85 years old | 85 years old | 85 years old |
| Minimum numbers of years | 3 years | 3 years | 3 years |
| Maximum number of years | 50 years | 50 years | 50 years |
| Type of premium | Fixed and guaranteed for the duration of the policy | Fixed and guaranteed for the duration of the policy | Fixed and guaranteed for the duration of the policy. This insurance can be removed and then the life insurance premium will continue. |
| Ownership | Joint and Single Life options available | Joint and Single Life options available | Joint and Single Life options available |
| Terminal Illness Benefit | Yes | Yes | Not applicable as included with the associated life insurance. |
| Additional Benefits | Access to Smart Health (see later in the article) | Access to Smart Health (see later in the article) | Access to Smart Health (see later in the article) |
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Direct Line Over 50s life insurance
This type of life insurance does not require the applicant to answer any medical questions and offers a death benefit upon death whenever that happens for the rest of your life. It usually provides less insurance for the cost due to the fact that it is a lifelong policy. It is commonly used to provide for funeral expenses or to leave a gift to your chosen beneficiary. If you stop paying for your Over 50s life insurance, you'll still be covered in the event of your death as long as you've made at least half the payments on your policy from when your insurance started up until your 90th birthday. It guarantees to pay at least half of the insurance amount if this is the case. This can be useful if you are worried about your ability to continue paying the premiums into later life. You are guaranteed to be accepted as long as you are between the ages of 50 and 85 (81 if you are a smoker).
Direct Line over 50s life insurance summary
| Direct Line Over 50s Life Insurance | |
| Policy description | A life insurance policy that pays a lump sum when you die whenever that may happen. Most commonly used to pay funeral expenses or leave a small gift. |
| Minimum age at entry | 50 years old |
| Maximum age at entry | 85 years old (81 for smokers) |
| Monthly premium range | £5 - £100 per month dependent on age and amount of insurance. |
| Maximum amount of insurance | £15,000 |
| Qualifying period | Death due to an accident in the first 2 years - 3 x premiums paid can be claimed.
Death not due to an accident in the first 2 years - 1.5 x premiums paid can be claimed. Death after 2 years - full benefit will be paid. |
| Application | There is no medical assessment and no need to disclose your health at the application stage. |
| Protected insurance amount | If you stop paying your premiums, you will continue to be protected as long as you have paid premiums for at least half the years from when you started the policy until your 90th birthday. The amount that is paid may be adjusted. |
Direct Line - additional benefits with life insurance
It is quite commonplace for life insurance policies to provide some extra features that are often referred to as 'Living Benefits'. These benefits can be accessed during your lifetime and add immense value to a policy in addition to the payout in the event of a claim. Through Direct Line, your AIG life insurance policy will provide you with a benefit called Smart Health.
Direct Line AIG Smart Health benefit explained
| Smart Health Benefit | How it works |
| 24/7 telephone and video access to a UK-based GP | Your prescription medicine will be delivered via next-day delivery nationwide (if ordered by 1pm) and same-day delivery in London (if ordered before 3pm). |
| Best Doctors® second medical opinion | Get expert medical opinions from world-renowned specialists. |
| Mental health support | Speak to a mental health specialist whenever you need to. |
| Regular health checks | Get a personalised report to improve your general health. |
| Nutritionist consultation | Book a consultation with a nutritionist on the Smart Health website and get a dedicated diet or healthy eating plan. |
| A four or eight-week personal fitness programme | Discover easy-to-follow exercise plans tailored to your overall health and fitness needs. |
Will Direct Line help me to choose the right life insurance for my needs?
No, they won't. Direct Line does not provide financial advice and as such it does not provide advice to recommend the most appropriate type of life insurance for you and your family. Instead, the purchase process is made through a series of choices that are offered to its customers online or over the phone. The online process and the telephone advisers are not able to help you to make the decisions.
However, the Direct Line website does provide some general information on various topics such as "How much does a funeral cost?"; "Life insurance for new parents" and "Dying without a will". There is some valuable information that provides some guidance here but consumers really need to explore all areas to ensure they end up buying what is right for them.
How much does Direct Line life insurance cost?
The life insurance product through Direct Line, provided by AIG is a good one and provides you with additional benefits and features that make it useful whilst you're living too (read on for more on these). However, AIG's product is available to buy through many life insurance brokers so you have to look at the merits of buying it via Direct Line.
Existing Direct Line customers will be attracted to the possibility of a multi-policy discount if they also buy their life insurance through the company. If you already have car or home insurance with Direct Line, the website indicates that you will receive a 7% discount on your monthly payments.
How good is the Direct Line multi-policy discount?
Below we have compared the cost of buying level life insurance through Direct Line with and without a multi-policy discount and compared this with the cost of the same AIG life insurance bought through a life insurance broker. All costs are fixed for the duration of a policy.
Cost of £250,000 Direct Line level life insurance over 25 years for a non-smoker compared with cheapest broker premium
| Age |
Standard Direct Line monthly premium
|
Direct Line Multi-policy discounted monthly premium | Cheapest broker premium | Monthly saving by using a broker^ |
Total saving using a broker over 25 years
|
| 30 year old | £12.67 | £11.78 | £8.62 | £3.16 | £948.00 |
| 40 year old | £23.83 | £22.16 | £18.09 | £4.07 | £1,221.00 |
| 50 year old | £59.48 | £55.31 | £44.49 | £10.82 | £3,246.00 |
^ This is the difference between the discounted monthly premium through Direct Line and the cheapest life insurance premium that we could find with a reputable insurer.
The example shows it can be possible to buy an equivalent life insurance policy cheaper via a life insurance specialist (a broker), even after applying the Direct Line multi-policy discount. A specialist insurance broker* will also provide free advice on the best type of life insurance for your needs.
How much does Direct Line over 50s life insurance cost?
When searching for the cost of over 50s insurance with Direct Line, you will choose the monthly premium that you wish to spend. This will provide you with an amount of insurance that is available for that cost.
Cost of Direct Line over 50s life insurance for a non-smoker
| Based on a monthly premium of: | Lump sum payable on death for non-smoker buying Direct Line Over 50s life insurance at age: | |||
| 50 | 60 | 70 | 80 | |
| £20 | £7,777 | £4,923 | £2,522 | £1,322 |
| £30 | £11,362 | £7,163 | £3,847 | £2,050 |
| £40 | £14,780 | £9,327 | £5,177 | £2,784 |
| £50 | not available | £11,492 | £6,508 | £3,517 |
All premiums are correct as of June 2022
Cost of Direct Line over 50s life insurance for a smoker
| Based on a monthly premium of: | Lump sum payable on death for smoker buying Direct Line Over 50s life insurance at age: | |||
| 50 | 60 | 70 | 80 | |
| £20 | £4,635 | £2,748 | £1,587 | not available |
| £30 | £7,101 | £4,208 | £2,396 | £1,107 |
| £40 | £9,568 | £5,668 | £3,223 | £1,489 |
| £50 | not available | £7,129 | £3,992 | £1,875 |
All premiums are correct as of June 2022
Does Direct Line offer a gift when you buy your life insurance?
As with many of the other insurance products that you can buy through Direct Line, life insurance purchases qualify for an e-gift card. A letter is issued to you 6 months after you start your policy as long as all your payments are up to date and there has been no claim. You then have a further 6 months to redeem your gift.
Direct Line gift card offer - Level or Decreasing term life insurance
The value of the eGift card issued for the purchase of a level or decreasing term assurance policy is subject to the cost of your policy.
Direct Line Gift Card Offer - How it works
| Monthly premium for the life insurance | Gift Card Value |
| £5.00 - £10.00 | £35 |
| £10.01 - £20.00 | £60 |
| £20.01 - £30.00 | £120 |
| £30.01+ | £180 |
The e-Gifts available to choose from are:
- Amazon.co.uk Gift Card
- Love2Shop code
- M&S e-Gift Card
Direct Line gift card offer - Over 50s life insurance
The eGift card for this type of policy purchase has a flat £100 value. It is not linked to the cost of your policy.
The e-Gifts available to choose from are:
- £100 Amazon.co.uk Gift Card
- £100 Love2Shop code
- £100 M&S e-Gift Card
Why can’t I compare Direct Line life insurance on a comparison site?
Direct Line's products do not appear on comparison sites. The only way to obtain a life insurance quote is through the website or over the phone. There are a variety of reasons that Direct Line provides for this. However, one of the main reasons is that they do not wish to dilute the customer journey. There are no renewals with life insurance so there is no need for the usual annual price check to see if you're on the best rates. Direct Line's current life insurance provider is AIG Life Limited UK but the company has been affiliated with other product providers in the past and the current deal with AIG is set for 5 years from summer 2019.
It is good practice to review your life insurance at key stages of your life such as, getting married, having children, and taking on debt and Direct Line points this out on its website. However, what isn't clear is how Direct Line would service you if they no longer have a relationship with the company that provides your life insurance.
Direct Line reviews
Trust Pilot
Direct Line is rated 3.8 out of 5 stars by Trust Pilot where it ranks 88 out of 94 ranked companies in the 'Insurance Company' category. 59% of the reviews rate it as Excellent while 21% rate it as Bad. Over 17,000 customer reviews on Trustpilot reflect the experience of customers across all of Direct Line's insurance products and not only the life insurance products.
Direct Line’s claims paid for life insurance
The claims history for life insurance policies sold by Direct Line is a little difficult to pin down as the company providing the insurance has changed over the years.
The current provider for life insurance, AIG has a very good claims history and paid 99% of life insurance claims in 2022 and 100% of the over 50s life insurance claims. The claims information for AIG's Critical 3 illness product isn't available as this is a fairly new contract and the claims experience will be built up over time.
How to get the best rates for Direct Line life insurance?
As described in this article, Direct Line costs are only available directly via the website or by telephone. The rates are calculated based on your age, smoker status, health and lifestyle if you wish to buy a term policy. For over 50s life insurance, the rates are calculated using your age and smoker status only. The analysis didn't find the cost of life insurance, even with the multi-policy discount to necessarily be the cheapest in the market but it isn't far from it.
If you are unsure about the type, amount or time over which you wish to arrange your life insurance, you may not feel confident buying Direct Line's life insurance. There is no advice offered to provide peace of mind in this respect. You may wish to explore an advised route to arranging your life insurance and this may even be less costly - the comparison prices in this article are taken from a specialist life insurance broker that provides free advice. If you wish to take this route, you can arrange a callback from a specialist life insurance adviser by completing this form*. If you do decide to take out a policy you will also receive up to £100 cashback.
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
