Guide
Life insurance and inheritance tax
Why writing a policy in trust can keep the payout outside your estate.
Read guideCompare life insurance quotes
Compare UK life insurance policies to protect your family's finances. Fixed premiums, straightforward cover, and help choosing the right amount and term.
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Run a full market comparison before you commit. It takes about five minutes and there's no obligation to apply.
How life insurance works
Life insurance pays a tax-free lump sum, or in some cases a regular income, to your family or estate if you die during the term of the policy.
Most UK policies are either level term, where the cover amount stays the same, or decreasing term, where cover reduces roughly in line with a repayment mortgage.
Premiums are based on your age, health, smoker status, the cover amount and how long you want the policy to run, and they are usually fixed for the whole term.
What affects the cost of life insurance
- Your age when the policy starts
- Smoker status and lifestyle
- Health history and family medical history
- Cover amount and how it's structured
- Policy term in years
Why compare life insurance with us
Fixed premiums
Level term policies lock in the same monthly cost for the whole term.
Written in trust
We explain how to keep the payout outside your estate and inheritance tax.
No medical needed for many
Many applicants are accepted based on a health questionnaire alone.
Cover from £1 a day
Basic term cover for younger, healthy applicants can be very affordable.
Typical monthly premiums by age
Indicative UK pricing for a non-smoker taking out £150,000 of level term cover over 20 years.
| Age | £150,000 cover | £250,000 cover | £400,000 cover |
|---|---|---|---|
| 25 | £6 - £9 | £9 - £13 | £13 - £19 |
| 35 | £8 - £12 | £12 - £18 | £18 - £27 |
| 45 | £16 - £24 | £25 - £36 | £38 - £55 |
| 55 | £38 - £55 | £58 - £82 | £88 - £125 |
Cost by policy type
Typical monthly cost for a 35-year-old non-smoker, £200,000 cover.
| Policy type | Typical term | Monthly cost |
|---|---|---|
| Decreasing term (mortgage) | 25 years | £9 - £14 |
| Level term | 20 years | £11 - £17 |
| Joint life, first death | 20 years | £16 - £24 |
| Whole of life | Lifetime | £45 - £90 |
Expert advice
Our team reviews UK life and health insurers, underwriting approaches and policy wording throughout the year.
“The single biggest mistake we see is people buying decreasing cover to match a mortgage but forgetting their family also needs an income, not just the house paid off.”
life insurance: pros and cons
Pros
- Tax-free lump sum for your family
- Premiums fixed for the whole term
- Can be written in trust to avoid inheritance tax and speed up payout
- Affordable for younger, healthy applicants
Cons
- Pays out on death only, not on illness
- Premiums rise sharply if you apply later in life
- Cover ends at the end of the term with nothing returned
How to choose life insurance
The cheapest premium is not always the best policy. Check these points before you apply.
- 1
Work out the right cover amount
A common rule of thumb is 10 times income plus outstanding debts, adjusted for your circumstances.
- 2
Match the term to your need
Align the term with your mortgage or until your youngest child becomes financially independent.
- 3
Consider writing it in trust
This can keep the payout outside your estate for inheritance tax and speeds up access to funds.
- 4
Check guaranteed vs reviewable premiums
Guaranteed premiums cost slightly more but cannot be increased by the insurer later.
Compare life insurance
See what's available for your business today. It takes just minutes.
How to compare life insurance
It takes a few minutes and comparing will not affect your credit score.
1. Tell us a bit about you
Your age, health, smoker status and roughly how much cover you need.
2. See matched quotes
We shortlist UK insurers who price your circumstances competitively.
3. Compare the full policy
Cover level, exclusions and claims record — not just the monthly premium.
4. Apply directly with the insurer
You complete underwriting and set your start date, usually within a few days.
Things to watch out for
Non-disclosure of health or lifestyle information is the most common reason claims are declined.
Cheaper reviewable premium policies can rise significantly at review, unlike guaranteed premiums.
Cover with no trust in place forms part of your estate and can be subject to inheritance tax and probate delays.
Our life insurance service
We compare life insurance from established UK insurers so you can see premiums, cover levels and exclusions side by side.
Comparing is free, and we will say plainly if a policy you already hold looks competitive.
Getting started
1
Gather your health history
Insurers ask about medical history, family history and lifestyle — accuracy matters at claim time.
2
Work out how much cover you need
Think about your mortgage, dependants and how long you'd need an income replaced for.
3
Answer underwriting questions honestly
Non-disclosure is the most common reason genuine claims are later declined.
Why choose Grow Your Business?
Wide choice of providers
We compare a broad range of UK providers so you can find the option that actually fits how your business operates.
Exclusive offers
We work hard to bring you exclusive deals, switching incentives and cashback where they're available.
Simple and fast
It takes just a few minutes to compare with us — and the deal you find could be well below what you pay today.
Types of life insurance
The right structure depends on your circumstances, budget and what you're protecting.
Level term
Cover amount and premium stay the same throughout — good for family income protection.
Decreasing term
Cover falls over time to track a repayment mortgage balance, keeping premiums lower.
Whole of life
Cover runs for your entire life rather than a fixed term, often used for inheritance tax planning.
Joint life, first death
Covers two people under one policy, paying out on the first death only.
Providers we compare
Logos are shown for identification. We are not affiliated with every insurer listed and do not compare the whole market.
Legal & General
Aviva
Vitality
Bupa
AXA Health
Royal London
Zurich
LV=Comparing with us is a no-brainer
“Setting it up in trust meant my kids would get the money within weeks, not months.”
Daniel, father of two, Leeds
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Read guidelife insurance FAQs
Do I need a medical for life insurance?
Often not. Many UK insurers accept applicants based on a detailed health questionnaire, though a GP report or medical may be requested for higher cover amounts or certain conditions.
What happens if I stop paying premiums?
Your cover lapses, usually after a short grace period, and you would need to reapply at your current age and health if you wanted cover again.
Is a life insurance payout taxable?
The payout itself is tax-free, but if the policy is not written in trust it can form part of your estate and be subject to inheritance tax.
Can smokers get life insurance?
Yes, but premiums are typically 50 to 100% higher than for non-smokers, reflecting the increased health risk.
Written by the Grow Your Business editorial team · Updated 26 July 2026