‘Why my £16 life insurance policy isn’t enough to protect my family anymore'

At 29, I was immortal. I raced mountain bikes, stayed out too late and sometimes forgot to brush my teeth. I also bought a house and ticked a box that said my partner would get £200,000 to cover our mortgage if I died. It added £16 a month to our bills. And that was that – I set up the direct debit and forgot all about it.

15 years later, life is very different. We live in a bigger house, and have four young children to fill it. Suddenly that £200,000 payout doesn’t seem like a fortune any more.

I’m what the insurance industry calls ‘underinsured’. But, as I’ve discovered, working out how much protection your family needs can be confusing and potentially expensive.

Here’s how I reviewed our cover, looked at the different options available and ended the tug-of-war in my mind between ‘safety first’ and ‘don't waste money’.

Please note that this article is for information purposes only and does not constitute advice. Please refer to the particular terms and conditions of an insurer before committing to any financial products.

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Are you underinsured?

The problem isn’t unique to me. Research commissioned by the Financial Conduct Authority (FCA), as part of its pure protection market study, found that 58% of UK adults do not hold a protection product such as life insurance, critical illness cover or income protection. 

The FCA says cost, uncertainty about products and difficulties engaging with the buying process can all put people off taking out cover.

LifeSearch, a life insurance broker, told Which? that, while finding comparative quotes online is easier than ever, understanding what kind of cover you actually need is the hard part. 

‘Many people don’t actively decide against taking out cover – they simply never reach a point where they feel confident enough to act,’ said Justin Harper from LifeSearch. 

• Find out more: best life insurance 2026.

Why I started reviewing my cover

One of the things that prompted me to revisit my policy was how much our circumstances had changed since I first took it out. 

When I first bought life insurance, all I really needed it to do was clear the mortgage if I died. Now we have four children, bigger monthly outgoings and far more people depending on our income.

If, like me, you have children under the age of 16 (or under 20 if they are in approved full-time education or training), then the government will pay an initial lump sum of £3,500, should you or your partner die. 

Those entitled to the higher rate can receive a £3,500 lump sum followed by 18 monthly payments of £350. 

While that support may help, it's unlikely to replace a long-term income or cover major household costs for years to come. 

• Find out more: bereavement support and widow's pension.

What happens if you're unable to work?

The real problem for my partner and me – and I suspect a lot of couples with dependents – is not that one of us might actually die, but that we could be unable to work through injury or illness. 

It’s also much more likely to happen. According to the latest figures for the Office for National Statistics (ONS), a 50-year-old woman has a 0.35% chance of dying in the next 12 months, while a man of the same age has a 0.53% chance.

Meanwhile, the chance of being off work for two months or more is 11%, and there’s a 6% chance of getting a serious illness. That’s according to data from Drewberry, an insurance broker, and is based on a 50-year-old non-smoker. 

While my partner and I both have workplace benefits that would continue to pay us in the event of sickness, both would run out after about a year.

• Find out more: what is life insurance? The different types of policy explained. 

What are the main insurance options?

There are several types of protection insurance available, but for my family the most suitable products to consider were critical illness cover and income protection. 

Critical illness cover pays out a tax-free lump sum if you’re diagnosed with a serious medical condition that's listed in your policy, such as cancer, a heart attack or a stroke.

Income protection insurance is a policy that pays out if you're unable to work because of injury or illness. It’s not prescriptive like critical illness cover, and pays out regularly to replace a portion of your income. It does not cover redundancy. 

The FCA survey found that while 22% of people have privately arranged life insurance, only 10% of respondents have critical illness cover and just 6% have income protection. Those figures are from privately arranged cover, and don't include employer benefits.

• Find out more: best income protection insurance 2026.

How we reduced our cost of cover

In an ideal world, we’d have both these kinds of cover, and it would pay out millions, should the worst happen.

After weighing up the different options, we eventually decided to keep our existing life insurance policy and take out income protection insurance. 

Should my partner or I be unable to work through illness or injury, it would pay £2,000 a month for the next 17 years. It costs £15 a month.

Here are the solutions we found to lower our premiums. It’s important to note that this isn’t insurance advice and that you should use a financial adviser or insurance broker for your own advice.

We chose a shorter policy term

We opted for an income protection policy that expires after a specified period – 17 years, in our case.

To keep the premium as low as possible, we specified it should run until our youngest is 21, by which time he should be through university. Whether that's long enough to find a job and stand on his own feet is a subject for another article.

Choosing a shorter policy term helped reduce the monthly premium, although it also means we'll need to review whether we still need cover when the policy ends.

We checked our workplace benefits 

As a teacher, my partner would get a year’s pay if signed off work by the GP, and I’d be eligible for around six months at Which?.

That meant we could defer when the income protection payments would start, should we become ill. This drastically reduced our premium.

Checking what benefits your employer already provides could help reduce the amount of additional cover you need to buy. 

• Find out more: how much is statutory sick pay?

We reviewed our existing policies

Some policies allow you to make adjustments to the terms or payments, even years after signing up. This is often without the policy having to be underwritten again, a process that can cause more expense. 

Our original life insurance policy was designed to pay off our mortgage, but while the amount we borrowed ticked down over time, the insurance coverage did not. We’re not changing ours, as the savings wouldn’t be worth it, but it’s an option for bigger policies.

• Find out more: do I need life insurance for a mortgage?

Look for policies with added benefits

Some medical insurance policies reward you for staying healthy, and while this doesn’t usually result in reduced premiums, it does sometimes generate rewards. 

Our insurer Vitality rewards us for doing exercise, helping out at Parkrun, having our blood pressure monitored, joining Weight Watchers and loads more. 

• Find out more: best private medical insurance 2026.