Life insurance types explained: most UK cover is either term cover (level, decreasing, increasing or family income benefit), whole of life, or an over-50s plan.
The names describe two things: how long the cover lasts, and what the payout does over time. This page is a map, with a short description of each type and a link to the page that goes into it. Sorting the types against your own circumstances is something an FCA-authorised broker handles by telephone, free, after a request made via the form on this page.
Life insurance types at a glance
Legal & General's types guide (19 June 2026) opens with a simple split: "there are two main types of life insurance: term life insurance and whole of life insurance". Almost everything else in the table below is a variation on one of those two, or an add-on to them. Each row follows the Legal & General and Aviva guides listed under Sources; a particular policy's own terms decide the detail.
| Type | How long it lasts | What the payout does | Read more |
|---|---|---|---|
| Level term | A set number of years | Stays the same | Level term life insurance |
| Decreasing term | A set number of years, often a mortgage term | Falls over the term | Decreasing term life insurance |
| Increasing term | A set number of years | Rises over the term; Aviva links the rise to inflation | Increasing term life insurance |
| Family income benefit | A set number of years | A monthly income for the rest of the term, in Aviva's plan | Family income benefit |
| Whole of life | Your whole life | Pays on a valid claim whenever you die, in L&G's description | Whole of life insurance |
| Over-50s plan | Your whole life | A fixed sum that does not rise with inflation, in L&G's plan | Life insurance for people over 50 |
| Joint or single | Either of the above | Joint pays once; single pays for one person | Joint life insurance |
| With critical illness cover | Added to a life policy | Can also pay if you are diagnosed with a covered illness | Life insurance with critical illness cover |
Life assurance is another name you will see: Legal & General notes that whole of life cover may also be referred to that way; life insurance and life assurance are explained on their own page.
Term cover: level, decreasing, increasing and family income benefit
Term life insurance pays out only if you die during the term you chose. Level, decreasing and increasing are three ways the sum can behave across that term. For how term cover compares with the other main type, see term vs whole of life.
Level term. Legal & General describes a level policy as one where "the cash sum stays the same throughout your policy term, and your monthly premiums will remain the same unless you make a change to your policy". The same guide lists the mortgage, childcare and school fees among the costs the money might meet, and Aviva's guide to types of life insurance (updated 3 August 2026) calls level term family protection insurance. The level term page covers how it works.
Decreasing term. Here the sum reduces over the term, which is why it is often tied to a repayment mortgage. Legal & General says the cash sum decreases "roughly in line with the way a repayment mortgage decreases", and that this type will generally cost less than an equivalent level policy. See decreasing term cover, and level or decreasing term for a mortgage if you are choosing between the two.
Increasing term. The sum rises over the term. Aviva says that with increasing term life insurance "your payout increases in line with inflation but it does mean your premiums generally increase as well". How each rise is worked out is set in the policy terms, and the increasing term page covers the indexes and limits in use.
Family income benefit. Instead of one lump sum, this pays a monthly income. Aviva's key features document for its YourLife Plan Family Income Benefit (EDCO0871-0126, January 2026) says it is designed to support your family by "paying a monthly benefit if you die or have a terminal illness" during the policy term. The family income benefit page explains the mechanics, and family income benefit against level term compares the two.
Whole of life and over-50s plans: cover for your whole life
Whole of life cover has no end date. Legal & General's guide describes it as lifetime cover that pays out on a valid claim whenever you die, so long as the premiums are paid, and says its cost reflects the fact that the insurer expects to pay a claim at some point. The whole of life page covers how it works, and types of whole of life insurance covers the variations, such as guaranteed or reviewable premiums.
Over-50s plans are a whole of life product aimed at older applicants. Legal & General describes its plan as for "UK residents aged 50 to 80", with guaranteed acceptance and no medical questions, and lists "full cover after one year" among the features. The same guide gives two cautions: the premiums you pay might exceed the cash sum, and the cash sum is fixed and will not rise with inflation. Those are one insurer's terms, not a rule for every plan; life insurance for people over 50 goes through what is sold.
Single or joint life cover, and critical illness cover added to life cover
These two choices sit on top of the types above rather than being separate products.
Joint or single. A single policy covers one person. Aviva says a joint policy covers you and a partner on one policy, can be bought on a level, increasing or decreasing basis, and that "joint policies only pay the full cover amount once". Aviva adds that the policy then ends, with no cover left for the surviving partner; Legal & General describes the same first-death basis. Which suits a couple depends on circumstances: see joint or single life insurance.
Critical illness cover. Rather than waiting for a death, this can pay a lump sum on a diagnosis of a condition the policy names. Legal & General says its critical illness cover "can be added for an additional cost" to its level and decreasing life insurance, and that the person must survive for 14 days from diagnosis. Its cover is for specified illnesses only, and the illness must meet the insurer's definition. See life insurance with critical illness cover; critical illness cover has its own page too.
Income protection, which pays a regular income if illness stops you working, is a separate kind of policy; types of income protection policy covers it, and critical illness cover compared with income protection explains the difference.
Which type of life insurance pays the largest amount?
No type pays more by its nature. The amount is the sum you choose when you apply, and the type decides what happens to it afterwards: it stays level, falls, rises, or comes as a monthly income. Legal & General describes its over-50s plan as a way to leave a small cash sum, while Aviva's family income policy pays its monthly benefit for the remaining term, so the total depends on when the claim is made.
Price follows the shape of the cover. Legal & General says decreasing cover will generally cost less than an equivalent level policy, and that increasing cover is likely to cost more than level or decreasing. The sum that suits your household is a separate question: how much life cover you need works through it. To see how each type prices up for you, a broker can go through quotes when you request a call through the enquiry form.
Frequently asked questions
What is the most common type of life insurance?
Aviva calls term life insurance the most common type: it lasts a set number of years and pays out only on a successful claim. Within term cover, the popular forms it lists are decreasing, level and increasing.
How many types of life insurance are there?
There is no fixed count, because insurers group them differently. Legal & General starts from two main types, term and whole of life, and then lists decreasing, level, increasing, critical illness cover and over-50s plans within or alongside them.
Can I have more than one type of life insurance?
Yes. Aviva says you can have more than one type of policy at the same time. Whether a second policy suits you depends on what each is meant to cover.
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Sources
- Legal & General, Types of life insurance (19 June 2026), read 26 October 2026. legalandgeneral.com/insurance/life-insurance/definitions
- Aviva, Types of life insurance (last updated 3 August 2026), read 26 October 2026. aviva.co.uk/insurance/life-products/life-insurance/knowledge-centre
- Aviva, YourLife Plan Family Income Benefit key features (EDCO0871-0126, January 2026), read 26 October 2026. protection.aviva.com