Comparing the market for life insurance policies takes a strategic approach. After all, there are hundreds of providers. To get the most comprehensive cover it helps to narrow the playing field. That’s what we’ve done here at Claybrooke for our updated list of the best insurance firms across the UK for 2019.
It’s never been easier to find the best plans and prices for high-level cover. For this update, we’ve analysed all the major insurers, pitted them against each other using a combination of data from insurance policies and the data by the Fairer Finance consumer help groups customer experience data.
Only the larger insurance firms cover all types of insurance policies. Some of the niche providers have great deals as well though. You’ll be surprised to see some familiar names from the high street make it onto this year’s list of the top life insurance firms.
The three most popular types of life insurance people search for are:
- Term insurance
- Whole of Life Insurance
- Over 50s Plan
So that’s where we focused our research on to come up with ten of the best insurance companies and the plans they offer that’s both providing value to customers and giving consumers a comprehensive policy.
To help understand what the policies offer, continue reading below for a quick overview of how life insurance plans work, so you know which chart to reference to narrow your choice of providers down to ten, rather than all thirty, which is less than 10% of all the providers we compare for our customers.
Top 10 Life Insurance Companies UK By Type:
Best For Term Life Insurance
Term Life Insurance is ideal for mortgage protection. It can be linked to your mortgages remaining value, whereby, the sum insured lowers each year as you’ll have paid more towards your outstanding balance. Your premiums won’t though. They’re still lower because they’re tiered though. If you have ten-years left to run on your mortgage, a ten-year fixed term would be ideal. If you’re just buying your home, you can set up term life insurance for whatever your mortgage terms are. The less you owe towards your mortgage, the less the premiums will be.
The Best Over 50s Life Cover
These are hard to categorise as the best as the plans are often ridiculously overhyped. These are the most basic of plans, they lock you in for life, and you won’t get a penny if you miss a payment.
Nonetheless, there are people who need them. Those are people with health problems who’d struggle to afford the monthly premiums on term or whole of life policies due to the medicals. Sometimes, existing health problems make it difficult to obtain any type of cover and that’s the only time the guaranteed life plan for over 50s may be worth it.
Don’t approach it lightly though. Do the math before taking the plan out. The Government have a handy life expectancy calculator that’s supposed to be used for pension planning. There’s no harm checking how long you’ll be paying into this plan for with it too though.
To give an example, let’s take Sunlife’s scenario on their how much will it (theoretically) cost page.
A 60-year old male paying £20 per month would guarantee a pay-out of £4,444. The life expectancy tool estimates that a 60-year old male will live another 26 years. Paying £20 per month for that many years would total £6,240. More would have been paid in than is being returned. Not exactly solid financial planning. But, it can have its place if you really are struggling to get any sort of life insurance in place. (Notice Sunlife didn’t make it to the top ten list)
Best Whole Of Life Cover
Whole of Life cover guarantees a cash lump sum pay-out to your loved ones, whenever you die. There’s no expiration on this like there is with term life insurance. Term life cover does not have a cash-in value so if you live past the term of the policy, you get nothing back. That’s for financial protection only.
Whole of Life cover is more appropriate for forward financial planning. Such as arranging this level of cover, writing it into Trust, thereby ensuring it’s paid out tax-free, helping to avoid the most hated tax in Britain – Inheritance Tax, aka, the Death Tax, which is currently around 40% of an entire estate. It is advised to get financial advice from an independent financial advisor to ensure your Trust is set up efficiently.
Best Means Based on What’s Covered for a Baseline Price…
Insurance quotes for life cover factor in personal circumstances and those can add premiums. The majority of plans and providers in the charts above are providing comprehensive levels of cover – not just the basics. But there will be factors that influence the price the plans are offered at.
Some of the things that add weight onto the premiums include:
- What age you are at the time of application
- What your financial circumstances are like
- Current and past medical problems
- If you work in a medium to high risk profession e.g. scaffolding
Bottom line is this: There’s no fixed rate that applies to every application. All applicants are assessed as individuals. Even for joint policies, the two applicants are assessed individually and offered plans tailored to the needs of two. That’s why when you check comparison sites for quotes, they state a ‘from’ rate and never an actual price.
The charts above can be used as a quick reference to give you a shortlist of life insurance providers who will be able to offer some of the best levels of cover at affordable prices, with many being able to tailor the plans to suit your individual needs.
For yourself to research policies, plans, and prices, quotes from ten of the best above will get you some good quotations. An alternative is to let us do even more of the heavy lifting and compare over 300 of our partner providers to guarantee you top-of-the-line plans and premiums within your budget.
Understanding Life Insurance
When you buy life insurance, you buy you and your family peace of mind. Life insurance is for your family’s financial protection.
Term cover may only cover the cost of your mortgage, but the primary reason to have it in place is to protect your family from losing their home, should a wage-earner not be around to bring in a salary to pay the mortgage.
Term cover can be depreciating in line with the remaining balance on the mortgage. That’s the most affordable type of life insurance. Note the payments don’t drop each year. Just the payout, but that’s reflected over the term of the policy, which brings the premiums down.
Whole of Life cover is for leaving aside a fixed sum upon your death. The amount to be paid to your family is agreed at the outset, and the premiums will be payable for the rest of your life until the policy is paid out to your family.
Whole of Life cover is best for ensuring there is a fixed amount of money being left to your family.
Over 50s life insurance is the same as a guaranteed life cover plan. They’re tailored to those over the age of 50 who are likely to have health problems. Often, for general term life cover, there’s a lot of medical questions in the application. Any previous diagnosis of a health concern will often increase the price you’re quoted. Don’t be tempted to lie as that invalidates the policy, resulting in no payment being made when it’s required.
For those who are left feeling uninsurable because of past and present medical problems, over 50s guaranteed life cover may be suitable. However, we would advise you use a specialist broker to compare the whole of the market, which includes policies that aren’t advertised on mainstream websites or available on the high street. Specialist brokers work directly with underwriters and can help you obtain life insurance for many circumstances.
You’ll have seen the over 50s plans advertised on the TV with the likes of Michael Parkinson emphasising the “no medical” aspect, the simplicity and it costing as little as £4 a month etc. Simplicity is the only selling feature these plans have. The premiums are higher and the payouts lower in most cases, but there will be something left over, which is always better than nothing. If you can obtain term cover or whole of life cover, those are better terms and prices. The guaranteed element of over 50s cover tend to decrease the value for money offered by the policies.
What Happens After You Buy Life Insurance?
When you purchase a life insurance policy, you enter into a legal contract between you, ‘the insured’, and, ‘the insurance company’, the firm you took the policy out with.
As it is a contract, there are terms attached to the policy. The majority of providers will issue the terms in advance before you agree to take the policy, and after you have accepted the offer, you’ll generally find there’s a 30-day grace period for you to change your mind without paying any premiums should you choose to cancel.
Definitely check the terms of any life insurance policy the instant the official documents arrive. Scrutinise them to ensure you know what’s covered and what’s not.
Understanding the terms of life insurance policies is critical to ensure you have the right level and type of cover. Advice will definitely help, and with us, we offer it free as standard to ensure our customers get the best price for a life insurance policy that covers their every need.
There’s no point taking out an over 50s life plan because you’re 52 years old if you’re in good health. You’d get a better deal on term life insurance and for the premiums you’d pay for the guaranteed element of an over 50s plan, it may even be possible to put a whole of life insurance policy in place for much the same price or less. More if you want to increase the total sum you’re insured for, such as a £150,000 fixed pay-out.
For a mortgage protection policy, you’ll want to ensure you have the correct number of years. If you have 10-years remaining on your mortgage, it should be a ten-year term policy linked to your mortgage and depreciating each year in line with the value of your outstanding balance. It could cost more to take out a five-year term policy to be renewed five-years later for another fixed term, as you could have developed ill-health which will increase the premiums.
Another thing worth considering on mortgage protection policies is critical illness cover, or income protection. Often, it’s ill health that leads to financial difficulty and not the death of someone in the family.
How Much Cover is Enough Cover?
This depends on your financial commitments and what you want to ensure is paid, so your family won’t be in financial turmoil.
For homeowners, the bare minimum would be a mortgage protection policy (Term Life Insurance) for the outstanding balance on your mortgage.
For families though, that won’t be enough cover. Some advice goes along the lines of the simplest formula to work out how much cover you need is to multiply your household income by ten, and that’s the amount of life insurance cover you need.
Consider a new-born in a single-parent family. What’s the total cost? Research tells us that the total cost of a lone-parent raising a child from birth to 18 years of age is £187,120. That’s just over £10,000 per year. So, for a family of four – two parents and two kids, one aged 10, the other 12, requiring an average £10,000 per year up until their 18th birthday, you’d be £80,000 + £60,000, totalling £140,000. Then add the mortgage onto that if that’s applicable.
Add on whatever you estimate funeral expenses to be. A traditional burial is estimated to be £4,257. A cremation, £3,311.
Then there’s the issue of outstanding debt. How much is owed? And covering for the loss of you or your partners income.
It’s easy to see that the figures soon add up, so your figure is likely to be lower than you actually need. For example, if your ideal figure is £300,000, the premiums may be too high to comfortably afford, therefore, you’d need to prioritise what would need covered by your life insurance policy.
To bring your costs down, you could eliminate outstanding debt, provided you had a plan in place to pay down outstanding balances. There’s nothing to stop you having more than one policy, therefore, a term insurance policy could be the budget option to ensure the mortgage is taken care of and a separate term policy to cover the cost of raising children.
For grandparents, the costs are often much different. Sometimes it’s an over 50s guaranteed plan to ensure the end of life costs are met, other times it’s financial planning for grandkids. Ensuring that each are left with perhaps a little something to put towards owning their own home. Or, they may have both. An over 50s plan to cover burial costs and another insurance policy to leave cash behind to their family.
How much is life insurance roughly going to cost?
It’s impossible to price exactly due to there being so many variables because of the individual nature of application assessments. However, instead of just stating the same as almost everywhere else does – It depends, which is useless…
Here’s a ballpark figure…
Data obtained from a survey in 2015 estimated the average term life policy for a 38-year-old male in good health to be £10.31 per month on a 25-year term policy for a sum insured of £100,000. If that person was a smoker, the premium would almost double to £20.14 per month.
To get the best out of our top insurance providers and plans, you need to know a few things.
- The type of cover that would be most suited to your personal circumstances
- The amount of cover you would need your plan to cover
- Any special circumstances that could affect your policy such as existing illnesses, working in a risky occupation, a family history of certain medical conditions, your lifestyle etc.
The providers and plans shown on our charts have some exceptional policies and rank highly for customer experiences. However, they are all terrible at explaining the terms of the policies. Transparency is an industry-wide problem for the insurance sector and that’s where we step in. Our comparison, quotation and advisory service is free to consumers. We have partnerships with all the major insurance firms and a range of niche insurance providers catering to high-risk policies.
Get in contact today for straight-forward advice, without any obligation.