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3 in 10 adults can’t afford life insurance – here are 4 easy ways to save money on yours

3 in 10 adults can’t afford life insurance – here are 4 easy ways to save money on yours

Aug 4, 2023

In the last few months, the news headlines have been dominated by the cost of living crisis. Supply chain issues following the pandemic and the war in Ukraine have contributed to steep rises in the prices of food, fuel, and energy.

Indeed, according to the Office for National Statistics (ONS), the cost of food rose by an eye-watering 17.4% in the year to June 2023.

In addition, the Bank of England (BoE) has increased interest rates from 0.1% in November 2021 to 5.25% as of August 2023. This has seen the cost of borrowing rise sharply, meaning many millions of mortgage holders are paying significantly more. The BBC reports that 1 million households will see their mortgage payments jump by £500 a month by 2026.

These combined issues mean that many households are having to make economies. Now, Cover magazine report that almost one-third (29%) of adults aged between 18 and 40 cannot afford to take out life insurance.

Read on to find out more about why millions of people feel they can’t afford the protection they need, and four ways you can cut the cost of cover.

Almost half of 18- to 40-year-olds do not have life insurance

Research among 2,000 UK adults aged between 18 and 40 found that nearly half (48%) of this age group did not have life cover.

The study also found that 1 in 5 adults (20%) reportedly had “no money to spare” with the ongoing cost of living crisis.

The poll, reported by Cover, also found that many people had cancelled protection during the cost of living crisis. The main reasons that adults cancelled their life insurance policies were:

  • Rising costs of food (38%)
  • Rising cost of energy (36%)
  • Increasing rents (26%)
  • Salaries not keeping track with inflation (26%).

Of those who did have life insurance, more than half (53%) said they took out cover to provide a lump sum to support their family if they died, while 2 in 5 (39%) took out cover to pay off their mortgage. 27% of respondents took out protection to cover funeral costs.

Alistair Rose, managing director of the firm who commissioned the research, said: “The cost of living crisis is affecting all of us and it’s forcing people to make incredibly difficult decisions around their budgets.

“This research highlights that the current economic situation isn’t just affecting day-to-day financial choices, but also difficult decisions that will have a lasting impact on entire families.”

Protection provides a valuable safety net and ensures your loved ones will receive vital financial support when they need it the most. So, even if finances are tight, it’s important to try and put some protection in place if you can.

If you think you’d struggle to fit an extra protection payment into your budget right now, it’s important to remember that the cost of cover is likely to be significantly less than you think.

Life insurance is available from as little as £6 a month – less than a couple of cappuccinos or your Netflix subscription. For just a few pounds a month, you can give yourself and your loved ones the peace of mind that you could continue to pay your mortgage, rent, or bills in the event that something happened to you.

To help you save money on your cover, here are four easy ways to reduce the cost of your life insurance and other protection.

1.Shop around for cover

There are dozens of providers of life insurance in the UK, from specialist insurers to high street banks and even supermarkets. So, the first way to save money is to shop around for cover and not simply accept the first quote you receive.

For example, if you arranged your mortgage through a high street lender (perhaps your bank) or the estate agent you bought the house from, you may have also received a protection quote.

However, this might not represent the best value for money for the life insurance, Critical Illness cover, or income protection that you need. Some banks, for example, will only sell their own life insurance, meaning you may pay more than if you had compared prices from a range of insurers.

We can help you to compare prices easily and quickly.

I’m Insured is an independent insurance broker and we’re here to help you to find you the best quotes online and to reduce the cost of your monthly insurance premiums.

Our service is fast, free, and secure. Complete a few details and we’ll scour the market for you to find the specialist life insurance or other protection you need at the best possible price.

You can compare cheap life insurance quotes from household names such as Aviva, Legal & General, and Scottish Widows so you don’t pay any more than you need to for the cover you require.

Shopping around for cover could help you to significantly cut the cost – or you could find you benefit from more cover for your budget.

2.Stop smoking

Being a smoker could increase the risk that you’ll suffer ill health, or you’ll contract a serious medical condition at a younger age. Consequently, while insurers will offer life insurance to smokers, you will pay more for your cover – and significantly more in some cases.

Here’s an example. Leading insurer Aviva says that a 35-year-old non-smoker, who wants £150,000 of mortgage protection or decreasing life cover to last for 25 years, would pay £8.61 a month.

If that same person was a smoker, they would pay £14.24 a month.

That’s an additional £1,689 in premiums across the term of the policy.

Most insurers will offer you “non-smoker” terms if you haven’t smoked for a year or more. So, if you can quit, it will enable you to save a significant amount on your life insurance.

3.Reduce the amount of cover

In most cases, some protection will be better than no protection at all. So, if you can’t afford the level of cover you ideally need, you could consider reducing the sum assured to bring the premium within your budget.

Taking out a lower amount of cover will likely make the protection more affordable – and you could always take out additional protection in the future as your financial situation improves.

Use our online life insurance quote service to establish what protection you may be able to secure for the budget you have available. Some life insurance is better than none!

4.Take a joint-life policy

When you take out protection, you normally have two options:

  • Single-life cover, where the protection covers one individual
  • Joint-life cover, where the policy will pay out on the “first event” and then end.

Single-life cover can often provide you with more protection and has a range of other benefits.

However, joint-life cover is often cheaper than taking out two separate single-life policies. It can therefore be a cost-effective way to arrange your cover.

Read more about the benefits of single-life cover and why it can be a useful option.

Get a life insurance quote now

As independent life insurance experts, we can help you to find the cover you need at the lowest possible price.

Our online life insurance quote system is quick and easy to use, and will instantly compare the costs of life insurance between many of the UK’s leading insurers.

We can also help you to find specialist life insurance – perhaps because you have a pre-existing medical condition or if you live in the Isle of Man or the Channel Islands.

Get a life insurance quote now.


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