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5 of the best life insurance companies in the UK

4 mins read
by Unbiased Team
Last updated Friday, May 3, 2024

Life insurance can be useful as it offers peace of mind for you and your family. We look at how life insurance works, the different types available and the best UK providers.

Life insurance is something that few of us like to think about, but it can offer peace of mind.

The best life insurance policy for you will depend on many factors, including your circumstances and budget.

In this article, we’ll explain:

  • What is life insurance and how does it work?

  • What are the difference types of life insurance?

  • What are the best life insurance companies in the UK?

What is life insurance, and how does it work?

Life insurance is a policy that pays out when you die, giving your family financial support after you’ve passed away.

Depending on the type of life insurance policy you take out, your family will either receive a lump sum or scheduled payments from your insurer.  

Life insurance can be used to cover mortgage payments or outstanding debts.

If you own a business, you can use life insurance to create a contingency plan, and to manage inheritance tax (IHT)

Most policies require you to pay a certain amount each month to guarantee a payout if you die while you’re insured.  

On average, the cost of life insurance in the UK is £38 per month, and the amount of cover is £152,000, according to iam INSURED.

Any life insurance policy payout depends on the information you provide about your lifestyle and health.

What are the different types of life insurance? 

There are many types of life insurance, but they broadly fall into four main categories.  

Term life insurance

Term life insurance is in place for a limited time, and the amount to be paid out depends on whether the insured person dies during that period.  

You can get decreasing, increasing, and level-term policies.

A decreasing policy means the money paid out falls over time, so it can be used to pay off mortgage debt, while the payout rises with an increasing policy.

With a level-term policy, the payout remains the same.

Whole life insurance

As the name implies, this policy lasts your whole life, and premiums are generally much higher. 

Whole life insurance has two types: balanced cover, which allows you to guarantee the cost of payments and premiums for your whole policy, and maximum cover, where payments are linked to an investment fund and can change over time. 

Joint life insurance

Joint life insurance policies cover two people under one policy and are ideal for couples.  

The payout structure is slightly different, as you can get a first death and second death policy.

For first death policies, one person gets a payout when their partner dies but loses their policy, while second death policies offer one payout when the couple are both deceased. 

Over 50s insurance

Life insurance policies generally become more expensive as you get older. 

Over-50s insurance policies tend to have guaranteed acceptance, but also strict terms around payments and the qualification period (also known as a moratorium).

Learn more: can I have more than one life insurance policy? 

What are the best life insurance companies in the UK? 

The best life insurance provider for you depends on what your needs are. 

While you’re doing your research, consider the coverage you require, your budget, and your age.  

A useful measure to consider is ‘life insurance rates,’ which tell you the percentage of life insurance claims paid out by a life insurance provider.

Some claims may not be paid due to an issue such as the policyholder giving inaccurate medical information. 

The UK’s insurance providers with some of the best rates (and well-reviewed on Trustpilot) are below.

  • What they offer: Aviva’s life insurance policies include critical illness cover, over 50s, income protection and term life insurance. 

  • Average payout rate: Aviva’s claim settlement rate in 2023 was 99.3%. 

  • Trustpilot rating: 4/5 (based on over 34,000 reviews) 

  • What they offer: LV’s life insurance policies include joint cover, critical illness and level and decreasing term life insurance. 

  • Average payout rate: 97% of claims were paid by LV= in 2023.

  • Trustpilot rating: 4.4/5 (based on around 71,000 reviews) 

Royal London 
  • What they offer: Royal London’s life insurance policies include whole life, level and decreasing term life insurance. 

  • Average payout rate: In 2022, Royal London paid 99.9% of claims received. 

  • Trustpilot rating: 4.1/5 (based on nearly 2,000 reviews) 

  • What they offer: Vitality provides whole life, term, joint cover, over 50s and family life insurance policies

  • Average payout rate: In 2022, Vitality paid 99.7% of claims.  

  • Trustpilot rating: 4.2/5 (based on nearly 40,000 reviews) 

  • What they offer: Zurich provides level, decreasing and increasing term life insurance policies. 

  • Average payout rate: Zurich paid out 98% of claims in 2022. 

  • Trustpilot rating: 4/5 (based on over 2,500 reviews) 

Looking for expert advice?

As with any major financial decision, it's a good idea to get financial advice.  

An insurance broker can look at your circumstances and financial goals to recommend the best life insurance products for your needs.

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Unbiased Team
Our team of writers, who have decades of experience writing about personal finance, including investing, retirement and pensions, are here to help you find out what you must know about life’s biggest financial decisions.