Cost of life insurance

The average life insurance cost depends on many unique factors that depend on your lifestyle, age, occupation and overall health, however you have a certain amount of say in what you pay.

life insurance options

How much cover do I need?

How much you pay for life insurance per month will depend on your personal circumstances and how much cover you need. Remember there are a number of factors that will affect your monthly premiums:

  • the amount of cover you need
  • the type of policy (the length and whether it is a single or joint policy)
  • the life insurance term
  • your age
  • your health 
  • your lifestyle - including whether or not you're a smoker

The simplest way to estimate how much life insurance cover you may need is to use our calculators.

Different types of insurance carry different costs

During the initial stages of an application, you will be asked which kind of life insurance you want. Usually, your options will be decreasing term, level term and increasing term policies. When finding out what life insurance costs, this decision will have a large effect.

Decreasing cover option

Decreasing cover option is typically used for covering loans like capital and interest repayment mortgages. With Decreasing policies, the amount the policy pays out goes down during the policy, along similar lines to how the remaining balance you owe on your loan goes down. Of the three main term policy types, decreasing policies tend to carry the lowest premiums.*

Check that the rate at which the payout of your decreasing term insurance policy reduces is appropriate for the % interest rate of your loan.

(For example, Post Office decreasing cover option is appropriate for loan interests up to 8%)

Level cover option

Level cover option provides a cash lump sum upon your death which your beneficiaries can use to settle debts, a continued contribution to their lifestyle or to spend however they wish.

This type of life insurance could be used to provide a cash sum for your family or to help cover an interest only mortgage.

Increasing cover option

Increasing cover option operates in a similar way as a level cover option. However, with increasing cover option the payout increases annually to help mitigate the effects if inflation and protect the value of the payout over time. For this reason, increasing cover option premiums go up each year and this type of policy tends to have the highest monthly premiums.

*Importantly, this will all be determined by the needs and circumstances of the individual. It is entirely possible that one person’s decreasing term policy has higher monthly premiums than another person’s increasing term policy.
For decreasing and level term insurance policies, how much you pay for life insurance each month will remain the same throughout the policy. There are insurance policies whereby you pay initially low premiums that increase with time, however these can end up being very expensive as time goes by.

life insurance

How do I calculate my premiums?

When the application is made, the amount of monthly premiums payable will be calculated based on the cover amount you'd like, whether you'd like a single or a joint policy, the length and type of cover and your personal circumstances, for example age, health, lifestyle, family history and occupation.

Since it’s difficult to determine an average life insurance cost for everyone, you will need to assess what your personal needs and circumstances are to get an accurate life insurance estimate. Considerations may be your mortgage, your cost of living, how much your life insurance costs will be dictated by the type of insurance you need, the size of the payout you want and your existing savings or saleable assets. As a rule of thumb, the lower the payout, the lower the monthly premiums.

Life insurance premiums are also based on the risk the policy holder poses to the insurer. Therefore, the higher the risk, the higher the premiums. More detail is given on what is considered higher risk below, or you can take a look at our guides and articles.

Average cost of life insurance

There isn’t an average cost of life insurance. If you think about the needs you currently have and compare them to those of your parents or children, they will probably differ wildly. However, you may both want the same type of insurance policy.

The important factors that insurers will need to know about your health include:

  • age
  • height
  • weight
  • status as a smoker or non-smoker
  • family medical history
  • lifestyle concerns (such as alcohol consumption)
  • any known diseases or disorders
  • whether you have or have had diagnosed mental health issues.

This isn’t an exhaustive list, and different insurers will vary in which of these they ask for and the level of scrutiny that they require.

Your profession may also play a role when assessing risk for an insurer. Someone whose job involves working in dangerous environments - such as around explosives - will find that how much they pay for life insurance each month is higher than (for example) a primary school teacher.

How can you improve your life insurance estimate?

If you want to reduce how much you will pay for life insurance per month, you might need to do some projections for the time at which you take out your policy. For example, if you are a smoker and you quit smoking the week before taking out a life insurance policy, this is very unlikely to have a positive effect on your premiums. Most insurers will require you to have been an ex-smoker for at least a year before it will be reflected in your premiums. (Bear in mind that ‘smoking’ includes all nicotine products, including patches and e-cigarettes.)

The same logic applies to all lifestyle habits. If you were to reduce your alcohol intake or lose weight, the amount you could pay for premiums may be less when you look at policies than it would have been if you hadn't made those changes. It’s important that you do this before taking out a life insurance policy, as it is very difficult to alter the size of your premiums once a policy is taken out.

There are things that you can control and things you can’t. Your age, for example, is (unfortunately) only going to move in one direction. As it is also likely that you will suffer fewer health problems at a younger age, your premiums may be lower the earlier you take out a life insurance policy.

Do bear in mind, though, that term life products have a defined lifetime. Since life insurance policies only pay out upon your death, taking out a thirty-year policy on your 18th birthday will hopefully not be advisable, even if the premiums are attractively low at this time.

Life insurance will have different costs depending on what stage of life you’re at and what your financial situation is. If it is something you are considering, then use our life insurance calculator a few times, altering the variables that you have control over, to find out the type and amount of cover you need. From this, you could to be able to judge the average cost of life insurance for you.

If you’re convinced that you need life insurance, then consider a life cover policy from the Post Office.

Ways to get covered

Post Office Life Insurance

Choose between level, decreasing or increasing term insurance, each designed to offer you peace of mind based on your circumstances.

Find out more

Post Office Over 50s Life Insurance

If you're aged between 50 and 80 Post Office could help you to leave your family the gift of a cash sum or help towards your funeral costs

Find out more


Optional extras with your Post Office Life Insurance

Post Office Children's Cover

Get extra cover for your little ones and financial peace of mind that your children are covered, by adding the optional children's cover to your Post Office Life Insurance.

Find out more

Post Office Critical Illness Cover

Get extra protection and financial peace of mind by adding the optional critical illness cover to your Post Office Life Insurance.

Find out more

Still have questions?

You can find more information on life insurance by visiting Post Office Life Insurance guides and articles.

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