The Numbers Don’t Lie
Every year, thousands of UK families receive life insurance payouts that keep roofs over their heads and bills paid. In 2024, UK life insurers paid out a record £5.32 billion in death claims alone. The industry-wide acceptance rate exceeded 97%, meaning the overwhelming majority of claims were paid in full.
Despite this, the FCA’s Financial Lives Survey consistently shows that over half of UK adults have no life insurance whatsoever. That leaves millions of families one unexpected tragedy away from serious financial difficulty.
What Does Life Insurance Actually Cost?
One of the biggest misconceptions about life insurance is that it is expensive. In reality, a healthy 30-year-old non-smoker can get £200,000 of level term cover for around £8 per month. Even a 40-year-old non-smoker typically pays under £20 per month for the same level of cover.
To put that in context, most people spend more each month on streaming subscriptions, takeaway coffee, or their mobile phone contract than they would on a policy that could pay their family a six-figure sum.
The average cost across all ages and risk profiles is £20.82 per month for £150,000 of cover. For a detailed breakdown by age and smoker status, see our life insurance cost guide.
| Age | Non-Smoker | Smoker | Cover |
|---|---|---|---|
| 25 | £5–7/mo | £10–15/mo | £200,000 |
| 30 | £7–10/mo | £15–22/mo | £200,000 |
| 40 | £14–20/mo | £30–45/mo | £200,000 |
| 50 | £35–55/mo | £70–110/mo | £200,000 |
When Life Insurance Is Essential
Life insurance is not for everyone, but for many people it is genuinely essential. You should seriously consider cover if any of the following apply to you:
- You have children or other dependants – Your family relies on your income for housing, food, childcare and education. Without your earnings, how would they manage?
- You have a mortgage – Your mortgage is likely the largest debt your household carries. Mortgage life insurance ensures it gets paid off if you die.
- Your partner depends on your income – If you and your partner share financial responsibilities, the loss of one income could be devastating.
- You have debts that would pass to your estate – Personal loans and credit cards can eat into what you leave behind.
When You Might Not Need It
Life insurance may not be a priority if you are single with no dependants, have no significant debts, and already have enough savings or assets to cover funeral costs. However, even in these circumstances, buying a policy while young and healthy locks in very low premiums for the future when your circumstances may change.
The Bottom Line
Calling life insurance a waste of money ignores the reality of what it does. For a relatively small monthly outlay, you guarantee that the people you love are protected financially if the worst happens. The 97% claim acceptance rate proves the system works. The £5.32 billion paid out in 2024 shows that real families benefit every single day.
The real waste is leaving your family without a safety net when one costs less than your Netflix subscription.