The Top Life Insurance Providers
In this guide
- What is life insurance?
- Our top 10 life insurance providers
- How does life insurance work?
- How much life insurance do I need?
- FAQs
What is life insurance?
Take out life insurance and your nominated loved ones will get financial assistance (potentially in the £1,000's) should you pass away while holding an active policy.
In other words, life insurance can even ensure your dependents won't have to compromise on their standard of living if you die at a relatively young age.
The price you pay for this peace of mind can vary massively between individuals. Your age, health, plus the type of cover you opt for are all important variables.
In this article, we're going to explore 15 life insurance providers, answer some common questions surrounding life insurance, and dive in to the different types of cover available.
Our top life insurance providers
There are a host of life insurance providers out there. So, to help you choose the right provider for you, take a look at the table below to discover our list of the top 15 life insurance providers in the UK.
| Provider | Defaqto rating | Cover offered | % of claims paid* |
|---|---|---|---|
| Zurich | 5 stars | Level, decreasing, and increasing | 98% |
| Aviva | 5 stars | Level, decreasing and increasing | 99.4% |
| Liverpool Victoria (LV=) | 5 stars | level, decreasing and increasing | 97% |
| AIG | 4 stars | Level and decreasing | 98% |
| Legal & General | 5 stars | Level and decreasing | 98% |
| No rating | Level and whole-of-life | 95% | |
| 5 stars | Level and decreasing | 99.5% | |
| 5 stars | Level, decreasing and increasing | 99% | |
| No rating | Level and increasing | 99% | |
| Nationwide | 4 stars | Level and decreasing | N/A |
| Post Office | 3 stars | Level, decreasing and increasing | N/A |
| Vitality | 5 stars | Level and whole-of-life | 99.6% |
| Co-op | 2 star | Level and decreasing | N/A |
| Churchill | 3 stars | Level and decreasing | 98% (AIG) |
| Direct Line | 3 stars | Level and decreasing | N/A |
Here's a closer look at the top 10 providers in the above table:
1. Zurich
Zurich Insurance Group Ltd is a Swiss-based insurance company with its headquarters based in the city of its name. According to Forbes' Global 2000s list compiled in 2021, it's the 112th largest public company globally. Zurich offers insurance products for individuals, businesses and corporate customers.
Zurch offers level, increasing, and decreasing cover, and you can add critical illness cover if you wish. Zurich's polices are available to those aged between 16 and 83, and premiums start at £5 per month.
Reviews: On TrustPilot this provider scored 3.9/5
2. Aviva
Headquartered in London, Aviva plc is a multinational insurance company. It boasts a customer base of approximately 18 million across its primary markets in the United Kingdom, Ireland, and Canada. Aviva provides of life and pensions services, and is the largest general insurer in the UK.
Aviva offers level and decreasing cover, with the option to add critical illness cover. Aviva is a provider that happily offers joint policies. To get cover you must be aged between 18 and 77.
Reviews: On TrustPilot this provider scored 4.2/5
3. Liverpool Victoria (LV=)
Founded in 1843, Liverpool Victoria now operates under the trading name 'LV='. LV= are among the largest insurance companies in the UK and provide a wide array of insurance and retirement products.
You can open a level or decreasing policy as long as you're aged between 18 and 84. Policy terms can range from 5-50 years, so there's plenty of flexibility. LV also offers cover for critical illness as an optional extra.
Reviews: On TrustPilot this provider scored 4.6/5
4. AIG
American International Group, Inc. is an American multinational finance and insurance firm that has existed for over a century. The company employs close to 50,000 people worldwide.
AIG offers level, increasing, and decreasing policies, as well as joint policies. You can open an AIG policy if you're aged between 17 and 86.
Reviews: On TrustPilot this provider scored 1.4/5
5. Legal & General
London-based Legal & General Group plc, often referred to as Legal & General, is a multinational financial services and asset management company. The company offers a comprehensive range of products and services, including investment management, lifetime mortgages, pensions, annuities and of course, life assurance.
Level and decreasing are the two types of life insurance policies offered by Legal & General to those aged 18-77. You can also add critical illness cover. Policies start from just £5 per month.
Reviews: On TrustPilot this provider scored 2.8/5
6. Aegon
Aegon N.V. offers in life insurance, pensions, and asset management. The company is based in The Hague, Netherlands and has a workforce of over 20,000 employees.
Aegon offers level and whole-of-life cover, as well as optional critical illness cover. To open a policy you must be between the ages of 18 and 83. As an added boon, Aagon customers also get access to 'Policy Plus' - a support service which allows you to book online health appointments.
Reviews: On TrustPilot this provider scored 3.3/5
7. Royal London
With its subsidiaries, The Royal London Mutual Insurance Society Limited is largest mutual insurer in the UK. The group manages funds totaling over £150 billion. The collective businesses within the group has approximately nine million insurance policies on its books.
With Royal London you can choose level or decreasing cover if you're aged between 18 and 70. The provider also offers critical illness cover at an additional extra cost.
Reviews: On TrustPilot this provider scored 4.1/5
8. Scottish Widows
Based in Edinburgh, Scottish Widows is a life insurance and pensions company that operates as a subsidiary of Lloyds Banking Group. The company offers a wide range of products including life assurance and pensions.
Scottish Widows provides level, increasing, and decreasing cover to those aged 18-79, with critical illness cover an optional extra.
Reviews: On TrustPilot this provider scored 1.2/5
9. Standard Life
Standard Life is a prominent UK-based company specialising in life assurance, pensions, and long-term savings. It is currently under the ownership of the Phoenix Group.
The firm offers level and increasing policies, available to those aged up to 70 years old. Critical illness cover can also be added to Standard Life policies.
Reviews: On TrustPilot this provider scored 2.2/5
10. Nationwide
Nationwide Building Society is a British mutual financial institution and is officially the world's largest building society boasting over 16 million members. Nationwide is is headquartered in Swindon, and offers a massive range of financial products besides life insurance.
Nationwide offers level and increasing cover, as well as cover for critical illness. It's worth knowing that Nationwide's level cover is available to those aged between 18 and 77, while decreasing policies are available to those aged 18 and 74.
Reviews: On TrustPilot this provider scored 1.7/5
How does life insurance work?
If you're in possession of an active life insurance policy when you pass away, your nominated loved ones will be paid a cash lump sum. This will apply as long as you met the terms and conditions of your policy during your lifetime. For example, you'll need to have kept up with your monthly or annual premiums, and you can't have ever missed a payment.
It's also worth knowing that some life insurance providers will typically refuse payouts if a death occurs to suicide or a 'reckless act'. When it comes to any type of insurance, it's vital you read and understand every detail of your policy wording.
While life insurance can give you peace of mind that your loved ones will be financially stable after you're gone, you shouldn't open a policy on a whim. That's because if you can no longer afford your premiums in future and have to cancel it, you'll no longer be covered. You also have to think very carefully about the type of cover you need, in addition to the length you'd like to be covered for.
How much does life insurance cost?
Your age, health, and the type of cover you're looking for will all have an impact on the cost of your life insurance policy.
However, to demonstrate the cost of a typical level-cover policy, we compared the cost of the cheapest cover for a 10 year level-term policy worth £250,000. We compared prices for a single 35 year old, 50 year old, and a 70 year old on three major comparison websites.
For the purposes of the research we assumed the applicants were male, with average height and weight, non-smokers, light drinkers, with no individual or family medical complications. Prices exclude critical illness cover.
| Comparison website | Premium (35 year old) | Premium (50 year old) | Premium (60 year old) |
|---|---|---|---|
| MoneySupermarket | £9.16/mth | £25.21/mth | £90.08/mth |
| GoCompare | £8.90/mth | £28.06/mth | £84.07/mth |
| CompareTheMarket | £8.18/mth | £26.16/mth | £70.80/mth |
What does life insurance cover?
An individual life insurance policy will cover the death of the policyholder. Meanwhile, a joint life insurance policy will cover two partners. Under a joint policy once a partner has died, the policy will no longer continue.
Not all types of death will be covered under a life insurance policy. If you intentionally take your own life, or you die from a risky or criminal activity, it's unlikely your policy will cover you.
Payments from a life insurance policy may cover funeral expenses, any debts from the individual who has passed, plus other associated costs. For example, if you die when you still have a mortgage, a life insurance policy might make a contribution towards repayments. If you were still working, then your policy may also pay your beneficiaries a monthly sum to compensate for the loss of household income (this is called a family income benefit policy).
How much life insurance do I need?
The best way to calculate how much life insurance you need is to use an online comparison tool. That way, you'll be able to enter details and compare polices that you're offered from different providers. You'll also have a say in how much you'll need your policy to pay out upon your death.
When using a comparison tool to compare quotes you'll likely be asked questions about your financial dependents, whether your family have any debts, your level of savings, outstanding mortgage, plus any other relevant information about your finances. For example, you may be asked if your employer offers a death-in-service benefit.
Your answers to all of these questions will have a big impact on the cost of your policy. Other important factors will include your age, current health (including any pre-existing conditions), and whether or not you're a smoker.
While there's no exact science and we aren't giving a recommendation, we've heard it said that the amount of life insurance you need should cover 10-12 times your annual income. That's assuming you're the highest earner in your household. If you aren't, then you may wish to accept cover that is cheaper, but less generous. If you have any questions or uncertainty regarding how much cover to take out, talk to a financial advisor to discuss your individual situation.
When comparing life insurance on a comparison website, ensure you're always truthful and upfront in your answers. If using more than one tool, make sure you enter the same exact details into every site you use so can accurately compare policies.
Types of insurance
There are various types of life insurance out there: level-term, decreasing term, increasing term, family income benefit, over 50's, and whole-of-life.
Let's take a look at each of these types of cover, and explore how they differ from one another:
1. Level-term.
A level-term life insurance policy is the most popular type of cover available. If you select this type of cover your beneficiaries will paid a lump sum if you die (as long as your policy term was still active). The general purpose of this type of cover is to ensure your loved ones won't fall into financial difficulty if you die at a relatively young age. It almost goes without saying, but the longer your desired fixed term, the more you'll have to pay.
Under level-term policies, the sum paid to your loved ones will be a fixed sum. For example, under a level-term policy, you may opt for a typical 25-year term which pays out £250,000 upon death.
It's important to note that once your term ends, if you're still alive (and hopefully you are!), you'll no longer be covered. You also won't get any of your premiums back.
While you may wish to opt for a long term policy, it can be tricky to get level-term insurance cover once you turn 80.
2. Decreasing term.
Decreasing term life insurance is designed specifically to cover your mortgage should you die while you still have a balance to pay off. If you opt for a decreasing term life insurance policy, your dependents will get a lump sum, but the size of the lump sum will decrease over time.
Generally, the amount of cover you have reduces every time you make a mortgage payment. This is why this type of cover is usually far cheaper than level-term policies.
3. Increasing term.
An increasing term life insurance policy works just like decreasing cover with one main exception: The value of any payout your loved ones receive will increase each year in line with inflation. Typically this increase will be linked to the Retail Price Index.
The main benefit of this type of policy is that you needn't worry about the potential payout being eroded by future inflation.
4. Family income benefit.
Family income benefit is another type of life insurance that's generally cheaper than level-term policies. Under a Family Income Benefit policy you can choose an annual payment amount, plus a length of time that you want to be covered for.
For example, you may choose a £5,000 annual payment for 15 years. So, under this cover if you died 1 year into your policy term, your beneficiaries would receive £5,000 per year for the remaining 14 years of the term. However, if you died 13 years into the policy, then they'd receive just two £5,000 annual payments. If you're still alive once your term has expired, your loved ones wouldn't receive anything.
5. Over 50's.
Over 50's life insurance, as it's name suggests, is life insurance for those aged 50+. These policies are generally quite expensive, and if you must keep on paying the regular premiums until you die. If you don't, or you miss a repayment, then you'll no longer be covered, and you won't get back any proportion of the premiums you've paid in.
With over 50 life insurance, there's also a chance the payout upon your death will be less than the amount you've paid in. Plus, these policies will rarely pay out if you die within 2 years of taking out the policy.
Over 50s policy providers often guarantee acceptance to those aged up to about 85 years old. However, this does vary by provider.
6. Whole-of-life.
Whole-of-life life insurance is generally a very expensive option. That's because it's targeted towards those who are likely to have an expensive inheritance tax obligation upon their death. Because of this, whole-of-life insurance is designed to cover any inheritance tax bills.
Unlike fixed term policies, whole-of-life insurance doesn't have an end term. It ends when you die (or when you stop paying premiums).
FAQs
What happens if my life insurance provider goes bust?
If your life insurance provider ceases trading you or your loved ones won't be short-changed. That's because under such a scenario the Financial Services Compensation Scheme will step in to find another insurer to take over your policy. If you need to make a claim before a new insurer is found, then you'll still be covered under the rules of the FSCS.
Should I choose guaranteed or reviewable premiums?
Life insurance providers typically offer you the choice of paying a 'guaranteed' or 'reviewable' premium.
A guaranteed premium means that your policy will never go up in price. It will be fixed for the entire duration of your life insurance policy.
Reviewable premiums, meanwhile, CAN change in price. This is why if you opt for a reviewable premium, you may find your monthly payments will be smaller than a guaranteed plan. However, the flip-side is that reviewable premiums typically increase as you get older. Reviewable premiums are usually reviewed every 5 years or so. This means that if your health worsens during this period, you may have to pay a much higher monthly sum to keep your policy active. This is no limit as to how much reviewable policies can increase by.
What happens if I have a health condition?
When you apply for a life insurance policy it's important to be as honest as you possibly can. If you don't, you're unlikely to be covered should you suffer a future illness.
Always disclose any health conditions that you're asked about.
If you have a health condition that impacts your expected lifespan, you might discover that your insurance quotes are on the high side. Some providers may simply decide against offering you insurance.
While there isn't much that can be done about this (unless you're over 50 and opt for a guaranteed over 50 plan) if you do have a medical condition, then you may wish to speak with an insurance broker who may be able to put you in touch with a specialist provider.
Should I go for a single or joint policy?
If you go for a level-term life insurance policy then you can choose a single or joint policy.
While a joint policy might be a cheaper option than two single policies, it's worth knowing that the cover will stop once you, or your partner dies (unless the term ends before either of you die). While a joint policy might be a good idea if you're only interested in leaving a lump sum to your partner, if you have other dependents then a single policy may be more appropriate.
Can I switch policies?
Yes. It is possible to switch life insurance policies which is why, if you already have a policy, it's worth checking on a comparison website to discover whether you could save a bob or two by moving providers.
You may also make a saving if your circumstances change in future. However, as we (sadly) can't reverse aging, the only positive change you can realistically make to your life expectancy is if you go from being a smoker to a non-smoker. If this applies to you then it's worth contacting your provider to see if they'd be happy to reduce your premium. (Do note that to be classified as a 'non-smoker' some providers will require you to have been nicotine-free for a set number of years.)
Disclaimer: Before making decisions about life insurance, conduct you own research and consider speaking with an independent broker. This content should not be considered financial advice. Life insurance providers listed in this article are not necessarily endorsed by NimbleFins.