Insurance Curator 
The pandemic rewrote the rules of life insurance pricing across the UK. Covid-19 triggered a surge in claims and a sharp rise in new applications. Prices have gone up, but not for everyone. Some groups now pay significantly more, while others have seen their premiums drop. This article breaks down the winners and losers since 2020, and what the data tells us about the future. We also look at how cities like London, Manchester, and Birmingham have been affected differently.
Understanding these shifts can help you secure the right cover at the right price. For a deeper dive into how underwriting changed overnight, read our guide on How Covid-19 Changed Life Insurance Underwriting in the Uk: What Applicants Need to Know Now?.
The pandemic also accelerated digital transformation. Remote medicals, e-signatures, and Zoom appointments are now standard. Our article on Remote Medicals, E-signatures and Zoom Appointments: How Covid Accelerated Digital Life Insurance in the Uk explains how this sped up applications and cut costs for insurers.
Pre-Pandemic vs. Post-Pandemic Pricing: The Big Picture
Before Covid, life insurance premiums in the UK were relatively stable. Annual increases hovered around 3–5% for most age groups. Then came the first lockdown.
- In 2020, insurers paid out over £1.5 billion in claims, a record high.
- Underwriting immediately tightened. Many policies became more expensive for older applicants and those with underlying health conditions.
- By 2021, average premiums had risen by 10–15% for standard policies.
Why? Insurers saw a spike in mortality rates and had to adjust their risk models. They also added extra questions about travel, occupation, and prior Covid infections. The changes weren’t uniform—some demographics benefited while others paid the price.
The Winners: Who Saw Premiums Fall or Stay Flat?
Not everyone lost out. Several groups actually saw prices remain stable or even drop.
Young and Healthy Applicants
Insurers competed fiercely for low-risk customers. People under 35 with no pre-existing conditions found that premiums barely budged. Some providers even lowered prices to attract new business.
- Example: A 30-year-old non-smoker in London could get a 20-year term policy for £15 per month in 2019. In 2023, the same cover was still around £14–£16.
Digitally Savvy Consumers
The shift to online applications and remote medicals cut administrative costs. These savings were passed on to customers who used digital channels. Our article on Remote Medicals, E-signatures and Zoom Appointments shows how this trend permanently reduced fees.
Non-Smokers with a Clean Post-Covid Record
Applicants who never caught Covid, or had a mild case with full recovery, often got standard rates. Insurers quickly learned that long Covid was a bigger risk factor than the initial infection. People without long Covid symptoms saw no penalty.
The Losers: Who Got Hit Hardest?
Premium increases hit specific groups hardest. Understanding who pays more can help you prepare.
Older Applicants (50+)
Mortality rates during the pandemic were highest among over-50s. Insurers responded by raising premiums significantly.
- A 55-year-old in Manchester saw a 20–25% increase on a level term policy.
- Some providers introduced age limits for new policies, cutting off cover for those over 65.
People with Long Covid
Ongoing symptoms like fatigue, breathlessness, and heart issues now trigger higher premiums or outright declines. Our detailed guide on Life Insurance and Long Covid: How Ongoing Symptoms Affect Uk Applications and Premiums covers exactly what to expect.
Key Workers and NHS Staff
Ironically, those on the front line faced higher premiums. Insurers perceived higher infection risk. Some policies also included exclusions for pandemic-related deaths. For more, read Life Insurance for Nhs Workers and Key Workers Post-covid: Special Risks and Extra Protections.
Applicants Who Had a Covid Hospital Stay
A hospitalisation for Covid now appears on medical records. Extra questions, delays, and medical reports are standard. Our article Applying for Life Insurance after a Covid Hospital Stay: Extra Questions, Delays and Medical Reports details the process.
City-by-City Breakdown: London, Manchester, Birmingham and Beyond
Pricing shifts varied by location. Urban areas with higher infection rates saw bigger increases.
London
As the epicentre of the UK outbreak, London premiums rose faster than the national average. A 40-year-old in central London paid 18% more in 2022 than in 2019. However, competition among providers remains fierce, so shopping around pays off.
Manchester
Manchester saw a moderate 12% average increase. The city’s younger demographic helped keep prices lower than London. However, for older applicants in Greater Manchester, increases hit 20%.
Birmingham
Birmingham experienced a 15% rise on standard policies. The city’s diverse population meant some ethnic groups faced higher rates due to statistical risk profiling. This has raised concerns about fairness.
Smaller Cities and Rural Areas
Rural areas like Cornwall or Cumbria saw smaller increases (5–8%). Lower population density meant lower infection rates. Insurers also factored in lower claim frequencies.
Future Trends: What’s Next for UK Life Insurance Prices?
The pandemic’s effects will linger for years. Here are the key trends shaping the market.
Personalised Pricing Will Get More Granular
Insurers are using data from wearables, GP records, and lifestyle apps. The healthiest customers will get discounts, while those with risk factors pay more. This is a double-edged sword.
- Winner: Tech-savvy, health-conscious individuals.
- Loser: Those without access to digital health tracking.
Long Covid Will Remain a High-Risk Marker
Underwriters now treat long Covid similarly to chronic conditions like diabetes. Premiums will stay elevated until medical understanding improves. Read our deep dive on Life Insurance and Long Covid.
Exclusions and Waiting Periods May Evolve
Some policies still contain pandemic clauses. Watch out for small print. Our guide on Covid-era Policy Small Print: Exclusions, Waiting Periods and Clauses to Watch out for explains what to avoid.
Group Life Cover Changes
Employer-provided group life insurance saw similar shifts. Employees in high-risk sectors (healthcare, transport) may have reduced cover. Check your benefits with Covid-19 and Group Life Cover: What Employees and Employers Across the Uk Should Check Now.
Resilience Planning Grows
Families are now actively using life insurance as part of pandemic preparedness. Our article Preparing Your Family for the Next Pandemic: Using Life Insurance as Part of a Resilience Plan offers practical steps.
How to Navigate Today’s Market
Whether you’re in London, Manchester, or anywhere in the UK, take these steps:
- Compare quotes from at least three providers.
- Be upfront about any Covid history—hiding it can void your policy.
- Consider a policy with guaranteed premiums that won’t rise with age.
- Look for providers that still offer digital-only discounts.
For those interested in using life insurance as a wealth-building tool, the book The Hidden Secret to Wealth with Cash Value Life Insurance is a top-rated resource (4.5 stars). It explains how cash value policies can serve as a retirement vehicle.
Also check out How the Wealthy Would Grow YOUR Money (5-star rating) for a deep dive into using life insurance for tax-free retirement.
Final Thoughts
The pandemic permanently shifted UK life insurance prices. While some groups saw increases of 20% or more, others escaped relatively unscathed. The key takeaway: shop around, disclose everything, and consider your future health risks.
The market will continue to evolve. Staying informed is your best defence. Keep reading our content pillar on Life Insurance after Covid-19: the New Normal for regular updates.