8 reasons you’re paying too much for life insurance

Life insurance costs an average of £29.26 a month, according to the insurance broker LifeSearch, which looked at more than 134,000 policies sold in 2024.

But are you paying more than you need to? We look at the most common reasons your premiums might be higher than necessary and how to keep costs down in 2025.

Member exclusive: get cover via LifeSearch - and a gift card

Choose life insurance, health insurance, income protection and/or critical illness cover via LifeSearch and get a £50 John Lewis gift card.

Get a quote

Policy must be active for 90 days before gift card is issued. T&Cs apply.

1. You didn't shop around

If you went with the first quote you found, you’re likely overpaying. Life insurance premiums can vary significantly between providers, so it pays to shop around. 

Comparison websites such as Comparethemarket.com, Confused.com, Go.Compare, LifeSearch and MoneySuperMarket can help you compare quotes quickly.

It’s also worth checking with specialist brokers who can access deals not listed on mainstream sites. Remember, the cheapest policy isn’t always the best, so focus on finding cover that meets your specific needs.

Our insurance experts rated the policies of six of the UK's largest insurers. Find out what we thought in our guide to the best life insurance in the UK.

2. You bought more cover than necessary

Overestimating your financial needs can lead to paying for more cover than you need.

Before choosing a policy, follow these four steps:

1. Assess your family’s needs Think about the financial support that your loved ones would need to cover essential expenses, including mortgage payments, outstanding debts, funeral costs and everyday living costs.
2. Consider income replacement A general rule is to choose cover that can replace your income for a set number of years. This provides immediate financial support for your family. Also, take into account any other income sources they might have.
3. Factor in specific debts If you have significant debts, such as a mortgage, look for a policy that decreases over time as you pay off the loan. This helps ensure that your family isn't left with any outstanding balances.
4. Review your cover regularly Major life events such as marriage, having children or buying a home can change your financial responsibilities. Adjust your cover as needed to ensure your policy still meets your needs.

Find out more: can you have more than one life insurance policy?

3. You chose the wrong policy type

Term life insurance typically costs less than whole-of-life cover, but many people still opt for whole-of-life without fully understanding the implications.

Term life insurance covers you for a set period, such as 20 or 30 years. If you die during the term, your beneficiaries receive a lump sum. If you outlive the term, the policy ends with no payout.

• Decreasing term cover is linked to a debt, such as a mortgage. The payout reduces over time as you pay off the debt. It’s usually the cheapest option.
• Level term cover keeps the payout the same throughout the term. Premiums are higher, but the payout is fixed.
• Increasing term cover adjusts for inflation, so the payout grows over time. This type costs more, but protects against rising costs.

Whole-of-life insurance pays out whenever you die, as long as you keep up with the premiums. It guarantees a payout, but the premiums are much higher because it’s certain to pay out at some point.

If you only need cover for a specific period (e.g. until your children are financially independent or your mortgage is paid off), a term policy might be enough.

• Find out more: what is life insurance? The different types of policy explained.

4. You're still paying smoker rates

If you were a smoker when you took out your life insurance, you’re likely paying significantly higher premiums. 

In one case, we found that a smoker would pay 124% more each month compared with a non-smoker, and almost £9,000 more over the life of the policy.

Even if you've since quit, insurers usually require you to have been smoke-free for at least 12 months to be reclassified as a non-smoker. Some insurers may want to see two, five or even 10 years of no smoking before adjusting your premiums. It’s not just cigarettes that count – vaping, nicotine patches and gum are also considered nicotine use. 

If you have quit smoking or vaping, ask your insurer to reassess your premiums. However, if your current provider doesn't reduce your rate, it could be worth shopping around for a new policy.

If you’re thinking about quitting, help is available. Visit NHS Smokefree and ASH (Action on Smoking and Health) for free advice and support.

• Find out more: life insurance for smokers.

5. Your job or hobbies aren't as risky any more

Not all jobs are treated equally by life insurance providers.

If your work involves risks such as working at heights, handling explosives or deep-sea diving, your premiums are likely to be higher.

This is usually due to the increased chance of injury or death. Construction workers, armed forces personnel, pilots and professional athletes might see higher premiums. Hobbies such as skydiving, motorcycling or extreme sports can also be deemed risky.

But if your circumstances have changed since taking out your policy, such as switching to a lower-risk job, your premiums may be reassessed. 

6. You overlooked workplace life insurance

Some employers provide life insurance as part of their benefits package, sometimes at no extra cost. This can be a simple way to secure cover without paying additional premiums.

However, employer-provided life insurance might be a fixed amount, such as one or two times your salary, which may not cover all your financial obligations.

It’s worth checking whether you need to top up your cover to ensure your dependents are fully protected.

• Find out more: income protection insurance.

7. Your health has improved

If you’ve lost weight, improved your fitness or managed a medical condition more effectively since taking out your policy, you could potentially secure a lower premium.

Insurers assess your health at the time of application, so if it's improved, it’s worth asking your insurer to reassess your policy. You may be required to provide updated medical information or undergo a health check.

Some insurers will discount your premium for keeping fit. For example, with Vitality you can earn up to 30% off your premiums if you’re active and lead a healthy lifestyle. 

• Find out more: many life insurance providers offer ‘perks’, but are they worth it?

8.  You didn’t start early enough

The cost of life insurance typically increases as you age, mainly because younger people are seen as lower risk. While you can’t go back in time, it's helpful to know that the longer you wait, the more you might pay.

Our research found a noticeable price difference for a level term policy worth £300,000. A 30-year-old non-smoker might pay around £117 annually, while the same cover for a 50-year-old could cost £580 – a difference of £463 each year.

If you have not yet taken out life insurance, it may be worth exploring your options sooner rather than later.

• Find out more: best private health insurance providers.