How to Save Money on Your Life Insurance Policy: 5 Practical Ways
Published 8th of October 2012·Updated 16 April 2026
Reviewed by: Reviewed for accuracy April 2026
You can reduce the cost of your life insurance by comparing quotes across multiple providers, choosing the right policy type for your circumstances, and reporting any positive lifestyle changes such as stopping smoking. Premiums for the same level of cover can vary by 40 per cent or more between insurers, so shopping around consistently delivers real savings.
Short Summary
Level term life insurance is the cheapest way to cover a specific financial obligation such as a mortgage. Premiums are fixed for the policy term and the payout is a set lump sum.
If you stopped smoking more than 12 months ago and have not updated your insurer, you may be entitled to a significantly lower premium. Ex-smokers can pay 40 to 50 per cent less than current smokers for equivalent cover.
Comparison sites such as Compare the Market and MoneySuperMarket compare dozens of life insurance providers simultaneously. Always check that the policy details (not just the premium) match what you need.
Two single-life policies can cost less than one joint policy for couples. It is worth getting quotes for both arrangements before buying.
Which type of life insurance is cheapest?
Level term life insurance is typically the most affordable option. It pays a fixed lump sum if you die during the policy term (usually 10, 20 or 25 years) and premiums stay the same throughout. A healthy 35-year-old non-smoker can secure £200,000 of level term cover for 25 years for around £10 to £15 per month, depending on the insurer.
Decreasing term insurance is even cheaper. The payout reduces over time, in line with a repayment mortgage balance, making it purpose-built for mortgage protection. Whole of life insurance costs significantly more because it pays out whenever you die, with no end date; it suits people who want to leave a guaranteed inheritance or cover an inheritance tax liability.
| Policy type | Payout | Premium | Best suited for |
|---|---|---|---|
| Level term | Fixed lump sum | Low to moderate | Mortgage, income replacement |
| Decreasing term | Reduces annually | Lowest | Repayment mortgage |
| Whole of life | On death (no expiry) | High | Inheritance planning |
| Over 50s guaranteed | Fixed lump sum | Moderate | Funeral costs, small legacy |
Should I get a joint policy or two single policies?
Couples often assume a joint policy is cheaper, but this is not always true. A joint policy pays out once (usually on the first death) and then ends, leaving the surviving partner with no cover. Two single policies pay out independently on each partner's death, providing twice the total protection.
Get quotes for both options from comparison sites before deciding. For couples where one partner is significantly older or has a health condition, the price difference between single and joint policies can be substantial.
How do I compare life insurance quotes?
Use at least two comparison sites to get a broad view of the market. Compare the Market, MoneySuperMarket and GoCompare all allow you to compare life insurance policies side by side. The comparison sites do not cover every insurer; companies such as Vitality and some specialist providers may need to be approached directly.
When comparing, pay attention to:
- The policy term (make sure it covers your mortgage or financial obligation)
- Exclusions (pre-existing conditions and activities such as extreme sports are commonly excluded)
- Whether the policy includes terminal illness benefit (this pays out early if you are diagnosed with a terminal illness; most standard policies include it at no extra cost)
- Whether premiums are guaranteed or reviewable (guaranteed premiums stay fixed; reviewable premiums can increase)
How do I pay only for the cover I actually need?
Check whether you have death in service benefit through your employer. Many workplace pension schemes include a death in service payment of two to four times your annual salary, which reduces how much life insurance you need to buy separately.
Check your existing policy documents for add-ons you did not knowingly select. Critical illness cover, waiver of premium, and accident cover can all inflate your premium. If you want critical illness cover, compare it as a standalone policy; buying it separately often works out cheaper, and you can check the definitions more carefully.
The standard guideline is to cover ten times your annual salary, but your actual need depends on your mortgage balance, the number of dependants, and any other assets your family could rely on. An online life insurance calculator from MoneyHelper can help you estimate the right figure.
Can lifestyle changes reduce my premium?
Yes, significantly. If you stopped smoking more than 12 months ago, you should contact your insurer or apply for a new policy as a non-smoker. Smokers typically pay 40 to 50 per cent more for the same cover than non-smokers of the same age and health profile. On a policy paying £100,000 of cover, the annual saving can be £500 or more.
Weight also affects premiums. Insurers use your body mass index (BMI) alongside other health factors. If your BMI has fallen significantly since you took out your policy, getting new quotes may produce meaningfully lower premiums.
Note that your age at the time you take out a new policy will also be higher than when you took out your existing one, which increases the cost. Run the numbers on both side before cancelling an existing policy; in some cases, staying with your current provider is still the right decision.
FAQ
Is it worth switching life insurance to a cheaper policy?
Potentially, but check the new policy carefully before cancelling the existing one. Never cancel your existing cover until the new policy is confirmed in force. If your health has changed since you took out the original policy, a new insurer may charge more or exclude certain conditions, even if headline premiums look lower on comparison sites.
Will I need a medical examination to get life insurance?
Most standard life insurance applications require only a written health questionnaire. For higher levels of cover (typically above £500,000) or if you have significant pre-existing conditions, the insurer may request a GP report or a medical examination. This is arranged and paid for by the insurer.
How much life insurance do I need?
A common starting point is ten times your annual salary, plus enough to pay off your mortgage. If you have young children, factor in the cost of childcare or the income a surviving partner would need for the years until the children are financially independent. MoneyHelper's life insurance calculator at moneyhelper.org.uk helps you work through the numbers.
Can I get life insurance with a pre-existing medical condition?
Yes, though premiums will likely be higher or certain conditions may be excluded. Specialist insurers including The Exeter, Vitality and British Friendly are more experienced at covering people with complex health histories. An independent financial adviser or a specialist life insurance broker can approach these providers on your behalf and is often worth using if standard comparison sites return high quotes.
What happens to my life insurance if I stop paying?
Most policies lapse if you miss more than one to two monthly payments. The cover ends and the insurer keeps the premiums already paid. There is no cash surrender value with term life insurance. If you are struggling to pay, contact your insurer before missing a payment; some will allow a payment holiday or a temporary reduction in cover.