< Life Insurance

Think you can't afford life insurance? You're not alone

Nearly half of young families are uninsured

By Remy Maisel

With no shortage of monthly outgoings, like rent and transport costs, families who are feeling squeezed might think life insurance is an expense you can opt out of, at least for now. 

In fact, in a partnership with YouGov, we recently discovered that nearly half of families with children aged 0-4 don't have life insurance – and of those, 44% said they would like it, but can't afford it at the moment. 

However, life insurance may not be as expensive as you think. Most of those who do have cover reported paying £10-19.99 per month or less in premiums. Premiums can vary with different types of cover, but here are some ways to keep them down:

4 ways to get affordable cover

  1. Only pay for the term you need
    There are two basic types of life insurance: whole of life cover and term life insurance. Whole of life cover continues until the policyholder passes away, whenever that may be. A term policy covers the policyholder for a specific period of time.

    Though it might sound like a no-brainer to be covered for your whole life, this type of policy is typically more expensive than term policies. There's usually a period of time that it makes sense to have covered, such as the length of your mortgage or how long you expect to have financial dependents.

  2. Consider decreasing cover
    Decreasing cover is a type of term life insurance. With decreasing cover, the value of your policy gradually reduces over the policy term until it reaches £0 – however, your premiums never change. Because this cover is typically for the length of a mortgage, people tend to think of it as mortgage life insurance.

    You can choose to cover only what you need – the amount and duration of the loan. As the cover amount reduces over time, premiums tend to be lower than for level or increasing term insurance. If you have a family, you can have peace of mind that if anything were to happen to you, they could stay in the family home. However, this may not be the cover you want if you are looking to maintain your family's lifestyle should anything happen to you as the cover amount decreases over time.

  3. Stop smoking and get healthy
    Your life insurance premium is impacted by your lifestyle and health. One lifestyle choice that can have a noticeable impact on your premiums is smoking, so you could consider quitting before you take out your policy. Remember to answer any questions on the application honestly, as you may be asked to have a medical exam. Think of it as a good opportunity (and a good incentive) to get healthier, and make it less likely that anyone will be claiming your policy anytime soon.

  4. Take advantage of Aviva's Free Parent Life Cover
    If you have a child under 4 years old, we'll offer you one year of free life insurance – but 90% of our survey respondents didn't know that was available. 

    "To help new parents be better prepared in case the worst happens, Aviva offers a year of £15,000 worth of life cover for each parent for every one of their children up to the age of 4 years. Completely for free and without the need to purchase anything. It's simple, easy and cover starts as soon as the plan has been set up,” says Paul Brencher, Life Insurance Managing Director.

    Although £15,000 may not cover all of the family's outgoings if the policyholder were to pass away, and Free Parent Life Cover lasts one year, Paul notes that it does provide at least some backup until parents can find a suitable policy that's more long-term and has a higher level of cover. Paul also emphasises that life insurance is not as expensive as many people think: "On the contrary, it is possible to get life insurance starting from as little as £5 a month. That's less than two takeaway coffees."