Term life insurance vs Whole of life insurance
Side-by-side comparison, when-to-use-each guide, and instant conversion. Reviewed for 2026.
Protecting a mortgage, covering dependants while young, income replacement during working years.
Guaranteed estate planning (inheritance tax mitigation), specific wealth transfer goals.
| Aspect | Term life insurance | Whole of life insurance |
|---|---|---|
| Payout guarantee | Only if death within term | Guaranteed whenever you die |
| Monthly cost | £10-25 (healthy 30s) | £80-300+ (same person) |
| Best for | Mortgage protection, family income | Inheritance tax planning, specific estate use |
| Surrender value | None | Yes (some products) |
| Complexity | Simple | Complex (often mis-sold historically) |
Frequently asked
Do I need life insurance?
If anyone depends on your income (partner, children, elderly dependants), yes. If you have a mortgage: yes (to pay it off). If you're single with no dependants and no mortgage: probably not. The fundamental question: if you died tomorrow, who would be financially harmed?
How much life insurance do I need?
Common rule: 10× annual salary. More precisely: sum needed to pay off mortgage + replace income for dependants until they're financially independent. A 35-year-old earning £40k with a £200k mortgage and two young children might need £500k-600k of cover.