11 min Read
18 Jun 2019

Written by Andy

How much does £250,000 life insurance cost and where best to buy it?

How much does £250,000 life insurance cost The most popular question I used to get asked in relation to life insurance was 'How much does £100k of life insurance cost?' However, with the rising cost of living in the UK combined with average UK house prices now standing at £226,798, more and more people are asking how much does £250,000 life insurance cost?

In this article we explain what life insurance is, why you need it, what you need to consider when buying life insurance and where best to get life insurance quotes. We also compare the cost of life insurance quotes for £250,000 for a smoker and non-smoker and explain the cheapest way to buy life insurance in the UK.

What is life insurance?

Life insurance is a policy that can provide a lump sum or monthly benefit if you die or become terminally ill (and are likely to die within 12 months). The money is paid to your dependents upon death or alternatively, you can nominate who you wish to receive the money by completing a trust form.

The proceeds of a life insurance policy can help to pay off your mortgage or other financial commitments such as loans or credit cards. A life insurance policy can also provide a lump sum or monthly benefit that will help to replace the loss of your earned income.

Which life insurance policy is right for you?

Level term insurance

The life insurance amount remains the same throughout the term of the policy, at the end of which the life cover will cease. Good for paying off an interest-only mortgage or where you want to provide a set lump sum for your dependents.

Decreasing term insurance 

The life insurance amount reduces throughout the term of the policy, at the end of which the life cover will cease (sometimes referred to as mortgage decreasing cover or mortgage protection assurance). Good for covering a reducing debt such as a loan or repayment mortgage.

Whole of life insurance 

The life insurance amount is provided for the whole of the insured person's life and will pay out in the event of death whenever that occurs. Premiums must be paid up until death and so there is no set term. As the payout is guaranteed, a whole of life policy can often be more expensive than level term insurance. Good for covering a potential inheritance tax liability.

Over 50's life insurance

A life insurance policy for people aged 50 and over. There is no underwriting, meaning you are guaranteed to be accepted. Good for those with complex medical issues and who are only looking for a small amount of life cover

Family income benefit

The life insurance amount is paid monthly, tax-free, instead of a lump sum in the event of death. As the benefit is paid monthly, the potential payout reduces each month and so as a result, the premium you pay from outset will be less. Good for those looking for a cost-effective way to insure a partner's income.

Joint life insurance 

The life insurance is typically payable upon death of either of the policyholders. Often referred to as a 'Joint life, first death' policy, spouses can take out a joint policy, knowing that if either of them die, the insurance will pay out to the surviving partner. Good for covering joint assets such as mortgages or loans.

We go into more detail about the different types of life insurance in our article 'Best and cheapest life insurance in the UK'.

Do you need life insurance? What you need to know

There are many reasons why you might be considering buying life insurance but it is important to understand when it is and isn't needed. Life insurance should be used to ensure that the people you leave behind are not financially affected by your death. If you are thinking of buying life insurance purely to leave a pot of money to someone, then you should also consider saving or investing the money as an alternative, as insurance can get expensive and if you cancel the premiums before you die, then the policy will not pay out.

Questions you should ask yourself when considering buying life insurance

To understand whether you need life insurance you should ask yourself the following questions:

  • Do people rely on you financially?
  • Does anyone rely on your income?
  • Have you got any debts, such as a loan or mortgage?

If your children, partner or other family members rely on you financially or if you have debts, then it is likely that your family will benefit from you having life insurance.

If life insurance isn't for you, what should you buy?

If you do not have any debts (such as loans, credit cards or a mortgage) and you don't have any dependents then you may be better off considering other types of insurance.

Income protection or critical illness insurance are policies that are designed to pay you in the event of you being unable to work or upon diagnosis of a particular illness, meaning that you benefit from the money when you really need it and you can continue living a good quality of life. Check out our articles 'Best and cheapest critical illness cover in the UK' and 'Income protection - do you really need it?' 

What can affect the cost of life insurance quotes?

Life insurance premiums are based on a number of factors and the cost of your life insurance will take into account the following:

  • the amount of life insurance cover you require
  • the type of life insurance policy you are applying for
  • the term of the policy (the length of time you want to take the policy for)
  • your age (but not your gender)
  • your current health
  • your lifestyle (including any dangerous activities and how much you drink)
  • whether you smoke or not (including whether you vape)
  • your family history

How much does £250,000 life insurance cost for non-smokers?

Below we have produced a table which shows the monthly premiums for £250,000 life insurance over 25 years for a non-smoker. We look at Level term insurance, decreasing term insurance and family income benefit and show example quotes for a 25, 30, 35, 40, 45, 50 and 55 year old.

Monthly cost of £250,000 life insurance (non-smoker)

Age Level term insurance Decreasing term insurance
Family income benefit
25 £6.76 £5.84 £6.26
30 £8.54 £7.21 £6.45
35 £11.38 £8.82 £7.92
40 £16.40 £12.12 £10.42
45 £27.79 £19.32 £14.81
50 £42.52 £29.73 £23.37
55 £74.04 £52.37 £38.76

Quotes are based on non-smoker rates over a 25 year term

How much does £250,000 life insurance cost for a smoker?

Below we have produced a table which shows the monthly premiums for £250,000 life insurance over 25 years for a smoker. We look at Level term insurance, decreasing term insurance and family income benefit and show example quotes for a 25, 30, 35, 40, 45, 50 and 55 year old.

Monthly cost of £250,000 life insurance (smoker)

Age Level term insurance Decreasing term insurance
Family income benefit
25 £10.87 £8.75 £7.82
30 £14.86 £11.13 £9.50
35 £21.97 £15.51 £12.95
40 £34.10 £23.83 £19.93
45 £63.04 £40.46 £32.31
50 £104.12 £71.18 £54.20
55 £174.67 £124.18 £92.44

Quotes are based on smoker rates over a 25 year term

How to guarantee the cheapest life insurance quotes for £250,000

The best way to guarantee the cheapest life insurance quotes in the UK is to speak to an independent specialist. There are plenty of online life insurance calculator's that can give you a basic 'guideline' price, but they are unable to tailor a quote to your individual circumstances.

An independent specialist will be able to:

  • Search the whole of the market (Online life insurance comparison sites do not always check the whole of the market, meaning you could be missing out on the cheapest quotes)
  • Give independent advice on the best type of policy and ensure that you are purchasing the correct amount of cover
  • Help complete your application forms as well as chase up the application with the insurance company
  • Understand your medical history and put you in touch with the insurance company that will provide the best quotes post-underwriting (for example, the cheapest insurer may increase your premiums based on your answers to the health questions, whereas another may not. The cheapest pre-underwriting quote, therefore, is not always the best)
  • Help you to complete a trust form to ensure the proceeds are paid to the right people and without the need to pay inheritance tax or go through probate

We have personally vetted the services of a specialist insurance broker that will be able to do all of the above for you. The firm employs strong ethics and will only ever offer a policy if it is the best policy to suit your needs; something we witnessed for ourselves when we visited their offices recently. To speak to an adviser, with no obligation to take things further, just fill in the form via the above link. If you do decide to take out a suitable life insurance policy you will also qualify for £50 cashback.

Looking for a financial adviser near you?

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