# How to compare life insurance in the UK

> Insurance · Last updated 4 July 2026

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## Quick answer

Compare life insurance on cover amount, term length, joint vs single policies, and whether you need decreasing cover for a mortgage. Level term is cheapest for pure family protection — whole-of-life is for inheritance planning, not day-to-day cover.

Life insurance pays out if you die during the policy term. Most families need level or decreasing term cover — not investment-linked whole-of-life. Compare like-for-like sums assured and check trust wording for faster payouts.

## Key facts

- Level term: fixed payout if you die within the term
- Decreasing term: payout falls with mortgage balance — cheaper for repayment mortgages
- Joint policy pays once on first death; two singles can be cheaper and more flexible
- Writing in trust can keep payouts outside your estate for IHT and speed up payment

## How much cover

Common rule of thumb: 10× annual income for families with dependants — adjust for debts, childcare years and existing cover from employers.

## Frequently asked questions

### Does life insurance pay on terminal illness?

Many term policies include terminal illness benefit at no extra cost — check the policy summary.

## Primary source

https://www.gov.uk/life-insurance

## Related

- [Life insurance basics](https://moneyguide.org.uk/insurance/life-insurance-basics/)
- [Term vs whole-of-life](https://moneyguide.org.uk/compare/term-life-vs-whole-of-life-insurance/)
- [Featured offers*](https://moneyguide.org.uk/offers/#compare-life-insurance)

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Independent UK money guidance from [Money Guide](https://moneyguide.org.uk). Information only — not regulated financial advice.