Life Insurance Calculator

Life insurance pays a tax-free lump sum, or sometimes an ongoing income, to your chosen beneficiaries if you die during the policy term — the whole purpose is to remove the financial burden a death would otherwise leave behind, whether that is an outstanding mortgage, lost income, or the cost of raising children. This calculator estimates what cover would cost based on your age, health and the term you choose, using the same actuarial approach UK insurers themselves rely on.

Why the Same Cover Costs 100x More at 70 Than at 18

Life insurance pricing follows a genuinely steep curve with age, and it is not a gentle, steady increase — the actuarial base rate per £100,000 of cover rises from a small fraction of a pound a month at 18 to well over a hundred pounds a month by the late sixties, an increase of more than a hundredfold across a working lifetime. This reflects genuine mortality data: the probability of death within any given policy term rises considerably faster in later decades than it does between, say, 25 and 35. This is the single strongest argument for arranging life cover earlier rather than later if you know you will want it eventually — locking in a rate while young captures decades of a dramatically lower premium for the whole term of a level policy.

The Same £200,000 Cover, Three Different Ages

At age 25, £200,000 of level term cover (before any term or health adjustment) works out to roughly £5.20 a month at the base rate. The identical £200,000 at age 45 rises to around £21 a month. By age 65, the same cover reaches roughly £216 a month — over forty times the 25-year-old’s rate, for exactly the same amount of protection. This is the clearest possible illustration of why arranging cover decades before it might be needed, rather than waiting, captures such a dramatically lower rate for the entire term of a level policy.

The DIME Method: A Structured Way to Pick a Number

Rather than guessing a round number, a widely used approach works through four categories: Debt (everything owed besides the mortgage, from credit cards to loans), Income (a multiple of annual salary to replace lost earnings, commonly 10 times or more), Mortgage (the full outstanding balance), and Education (the estimated cost of raising or educating any children to independence). Adding these together, then subtracting any existing cover or savings already in place, gives a considered total rather than an arbitrary figure. This calculator lets you enter your own target cover amount directly, but working through DIME first, even roughly, produces a far more defensible number than picking a cover level that simply feels reasonable.

It is worth revisiting this calculation periodically rather than setting a cover level once and never reviewing it — a mortgage balance shrinks over time, income can change, and children eventually become financially independent, all of which mean the DIME total that was accurate five years ago is very often no longer the right figure today.

Level, Decreasing, or Whole of Life — Picking the Right Shape

Level term cover pays a fixed amount regardless of when death occurs within the term, suited to needs that do not shrink over time, such as income replacement or funding children’s education. Decreasing term cover reduces over time to mirror a repayment mortgage balance, and is correspondingly cheaper, since the insurer’s maximum exposure falls each year alongside the actual mortgage owed. Whole of life cover has no fixed end date and pays out whenever death occurs, at a considerably higher cost reflecting the certainty of an eventual payout rather than the possibility of outliving a fixed term. Family income benefit pays an ongoing monthly income rather than a lump sum, which can suit households that would find managing a large sum less practical than a steady replacement income.

Many households end up combining more than one type rather than choosing a single policy for every need — decreasing term matched precisely to a repayment mortgage, alongside a separate level term policy sized for income replacement, is a common and sensible combination that matches each type of cover to the specific need it is best suited for.

Why Term Length Isn’t Simply “Longer Costs More”

Term length affects premium in a way that is not simply linear — a shorter term under 10 years is priced lower than the standard rate, reflecting less cumulative risk exposure, while a longer term over 30 years is priced meaningfully higher, since a longer window inherently carries more chance of a claim occurring within it at any starting age. Choosing a term that genuinely matches the underlying need — the remaining mortgage term, or the years until children are financially independent — rather than an arbitrary round number, keeps the cover aligned with an actual need rather than paying for protection beyond when it is genuinely required. If a serious diagnosis, rather than death, is the risk you are most focused on covering, our Critical Illness Calculator covers that separately, and our Income Protection Calculator addresses ongoing income loss from illness or injury rather than death specifically.

Frequently Asked Questions

Important Information

This calculator provides an estimate for general information purposes only and does not constitute insurance or financial advice. Actual premiums depend on full underwriting by the insurer. For advice specific to your circumstances, consult a qualified financial adviser. See our Disclaimer for further information.