Protection for the years your family needs it most.
The short answer
Term life insurance is a policy that pays a fixed or changing lump sum if the insured person dies during a set term, such as 25 years. If they survive the term, the cover ends and nothing is paid. It is usually the simplest and lowest-cost way to protect a mortgage, an income or young children.
Who this cover may suit
- You have a mortgage or other debts someone else would inherit.
- Children, a partner or relatives rely on your income or your care.
- You want protection for a defined period at a predictable premium.
- Your employer cover would end if you changed jobs, or is too small.
When to consider another option
- You want a guaranteed payout whenever you die — look at whole of life cover instead.
- Nobody depends on you financially and you have no debts to pass on.
- You mainly want an income if you are too ill to work — that is income protection, a different product.
How it works
Tell us about you
A few simple questions about your age, health and what you want to protect.
Choose amount and term
Pick the cover shape — level or decreasing — and how long it should last.
Review real options
See options from insurers based on your answers, with a person to help if you want one.
How term life insurance works
You choose three things: how much the policy pays (the sum assured), how long it lasts (the term) and its shape — level, decreasing or increasing. You pay a monthly premium, usually fixed for the whole term. If you die during the term, the insurer pays the sum assured to your estate or, if the policy is written in trust, straight to the people you choose. MoneyHelper sets out the main types of life cover and how each works. [2]
Because term cover only pays within a defined window and has no cash-in value, it usually costs far less than whole of life insurance for the same amount. That is why it is the most common way UK households protect a mortgage and young family. Our full guide to what term life insurance is goes deeper on the mechanics.
| Term life insurance | Whole of life | Over-50s plan | Death-in-service | |
|---|---|---|---|---|
| Pays out | If you die within the term | Whenever you die | Whenever you die, after a waiting period | If you die while employed |
| Typical purpose | Mortgage, income, children | Inheritance Tax, legacy | Funeral costs, small legacy | Employee benefit |
| Medical questions | Yes | Yes | Usually none | Usually none |
| Relative cost for the same cover | Lowest | Highest | High per £ of cover | Paid by employer |
| Ends when | Term expires | Never (while premiums paid) | Never (while premiums paid) | You leave the job |
Level, decreasing or increasing?
Level cover keeps the same payout throughout — often chosen for family income needs or an interest-only mortgage. Decreasing cover falls over time, roughly tracking a repayment mortgage, and usually costs less. Increasing cover rises each year to help keep pace with inflation, with premiums rising too. Compare all three in our cover types guide.
| Shape | Payout over time | Often used for | Premium |
|---|---|---|---|
| Level | Stays the same | Family income, interest-only mortgage | Fixed |
| Decreasing | Falls across the term | Repayment mortgage | Usually lowest, fixed |
| Increasing | Rises each year | Protecting value against inflation | Rises over time |
What shapes the price
Premiums depend on your age, health, nicotine use, occupation, the sum assured, the term and the cover shape. The FCA’s market study into pure protection found competition in the market generally works well, while noting many households remain underinsured. [3] We never show a made-up price: real premiums only come from insurers based on your answers. Our guide to term life insurance costs explains each factor.
Answer every application question accurately. Under the Consumer Insurance (Disclosure and Representations) Act 2012 you must take reasonable care not to misrepresent, and careless or deliberate mistakes can reduce or remove a payout later. [6] Honest answers are what make the ABI’s 97.9% claims-paid figure apply to you. [1]
Getting the money to the right people
Without a trust, a payout usually joins your estate: your family may wait for probate, and the money can count towards Inheritance Tax, which GOV.UK explains is usually charged above £325,000. [4] A policy written in trust can pay directly to your chosen beneficiaries. HMRC explains how trusts are taxed. [5] Our trusts guide walks through the choices.
A family choosing term cover
Fictional family: Chloe, 36, and Marcus, 38, two children aged 3 and 6, a £220,000 repayment mortgage with 24 years left. Marcus has death-in-service of 2× salary. No prices are shown because real premiums depend on underwriting.
- Mortgage layer
- Joint decreasing cover, £220,000 over 24 years
- Family layer
- Two single level policies until the youngest is 21
- Employer cover
- Counted, but not relied on — it ends if Marcus moves job
- Trust
- Each policy written in trust for the surviving parent and children
The mortgage would be cleared and the household funded while the children grow up. They plan to review the cover at any remortgage or change in income.
Term life insurance at a glance
What works well
- Usually the lowest-cost way to buy a large amount of cover.
- Fixed premiums make budgeting predictable.
- Can be shaped to a mortgage or to the years children depend on you.
What to watch
- Pays nothing if you outlive the term.
- No cash-in value at any point.
- Level cover loses real value to inflation over long terms.
Employer death-in-service cover is valuable but MoneyHelper notes it typically ends when you leave the job. [7] If a claim is ever disputed, the Financial Ombudsman Service handles complaints about insurers free of charge. [8]
Matching the term to your life
The right term is usually the length of the commitment you are protecting, not a round number. MoneyHelper’s guidance on whether you need life insurance starts from the same place: what would the money need to do, and for how long. [10] A 25-year term chosen because it sounds standard can leave a family exposed in year 26 — or have you paying for cover you stopped needing years earlier.
| Commitment | Typical term | Shape often chosen |
|---|---|---|
| Repayment mortgage | Years left on the mortgage | Decreasing |
| Interest-only mortgage | Years left on the mortgage | Level |
| Children until independence | Until the youngest is 21–25 | Level or family income benefit |
| Income replacement for a partner | To planned retirement age | Level |
| Inheritance Tax on gifts | 7 years from the gift | Level (gift inter vivos) |
Common mistakes to avoid
The FCA’s Consumer Duty requires insurers and intermediaries to act in good faith and help customers make informed decisions — but the choices still sit with you. [9] The mistakes we see most often: choosing the cheapest premium without checking the cover shape, leaving a policy out of trust so the payout waits for probate, forgetting to review cover after a remortgage or a new child, and relying on employer death-in-service that ends when the job does. [7]
Reviewing cover at a remortgage
Fictional couple: Priya and Tom, both 41, remortgaging to a £180,000 repayment mortgage over 20 years. Their original decreasing policy has 12 years left and £95,000 of cover remaining. No prices are shown because real premiums depend on underwriting.
- Gap found
- The old policy no longer matches the new mortgage balance or term
- Options compared
- Top up with a second policy, or replace with one £180,000 decreasing policy over 20 years
- Health check
- Replacing means new underwriting at age 41; keeping the old policy avoids that
- Decision
- Kept the old policy and added a smaller top-up layer, both written in trust
The mortgage is fully matched again. Reviewing at life events — remortgage, new child, salary change — keeps cover honest.
Keep exploring
Frequently asked questions
What is term life insurance in simple terms?
It is a policy that pays a lump sum if you die during a set period — the term — that you choose when you take it out, for example 20 or 25 years. You pay a regular premium, usually fixed. If you die within the term, the insurer pays the agreed amount to your estate or to the beneficiaries of a trust. If you are still alive when the term ends, the cover stops and nothing is paid back. Because it only covers a defined window and builds up no cash value, it is usually the lowest-cost way to protect a mortgage, an income or young children.
How much term life insurance do I need?
Start with what the money would need to do: clear the mortgage and other debts, replace income for a number of years, fund childcare or education, and cover funeral costs. Then subtract savings and any existing cover, such as death-in-service from an employer. The estimator on this page uses a simple, visible formula — mortgage plus yearly take-home income multiplied by the years you choose — as a starting point. It leaves out inflation, tax and changing family needs, so our full needs guide walks through a more complete household calculation before you apply.
How long should term life insurance last?
Most people anchor the term to their longest financial commitment. That might be the remaining years on the mortgage, or the years until the youngest child is financially independent, often around 21. Some choose the later of the two. A longer term generally means a higher premium, while a term that ends too soon can leave a gap exactly when the family is still depending on you. Our guide to how long life insurance should last compares the common approaches, including matching the mortgage, matching the children and splitting cover into layers with different end dates.
Is term life insurance worth it?
It depends on whether anyone would be financially worse off if you died. If a partner, children or a mortgage depend on your income or your care, term cover can replace that support for the years it matters most, usually at a lower cost than other forms of life insurance. If nobody depends on you and you have no debts to pass on, it may not be a priority. Protection insurers paid 97.9% of claims in 2025, according to the Association of British Insurers, which shows that honestly applied policies do what they promise.
What is the difference between term and whole of life insurance?
Term life insurance only pays if you die within a set period, and ends with no payout if you survive it. Whole of life insurance pays whenever you die, as long as premiums are maintained, so a claim is certain. That certainty makes whole of life far more expensive for the same amount of cover. Term cover is typically used to protect a mortgage, income or children during their dependent years. Whole of life is more often used for legacy planning or to help fund an expected Inheritance Tax bill. Some households combine both for different purposes.
Should term life insurance be written in trust?
For many families, yes. Without a trust, the payout usually forms part of your estate, which can mean waiting for probate and, depending on the estate’s size, counting towards Inheritance Tax, usually charged above the £325,000 threshold. A policy written in trust can pay directly to the beneficiaries you choose, often much faster and often outside your estate. It also gives you control over who receives the money, which matters for unmarried couples and blended families. Trust wording matters, so consider legal advice where circumstances are complex.
Can I get term life insurance without a medical?
Usually, yes. Most UK term life applications are decided from the answers on the application form alone, without any medical examination. Insurers may ask for more evidence — such as a report from your GP, a nurse screening or a medical exam — if you are older, ask for a very large amount of cover, or disclose a health condition. Over-50s plans are the exception in the other direction: they typically ask no health questions at all, but cover amounts are smaller and a waiting period applies before the full payout is available. Whatever the process, answer every question accurately: under the Consumer Insurance (Disclosure and Representations) Act 2012 you must take reasonable care not to misrepresent, and careless answers can reduce a payout years later.
What happens if I stop paying my term life insurance?
Term life insurance has no cash-in value, so if you stop paying premiums the cover simply ends — there is nothing to withdraw and nothing is refunded. Most insurers allow a short missed-payment window, often around 30 days, before the policy lapses, and some let you restart within a set period if you catch up. If money is tight, it is usually better to speak to the insurer or an adviser before cancelling: options can include reducing the sum assured or shortening the term to lower the premium, rather than losing protection entirely. If you cancel and reapply later, you will be older and your health may have changed, so new cover will usually cost more and may come with exclusions.
Sources
- Association of British Insurers — Protection insurers pay out £7.84 billion in claims in 2025 (2026-06-29)
- MoneyHelper — What is life insurance? (2026-09-28)
- Financial Conduct Authority — MS24/1.5 Market Study into the Distribution of Pure Protection Insurance Products: Final Report (2026-09-21)
- GOV.UK — How Inheritance Tax works: thresholds, rules and allowances (2026-09-28)
- HM Revenue & Customs — Trusts and Inheritance Tax (2010-11-08)
- legislation.gov.uk — Consumer Insurance (Disclosure and Representations) Act 2012 (2012-03-08)
- MoneyHelper — Life insurance through work (2026-09-28)
- Financial Ombudsman Service — Complain about a financial business (2026-09-28)
- Financial Conduct Authority — Consumer Duty (2022-07-27)
- MoneyHelper — Do you need life insurance? (2026-10-01)