Halifax Life Insurance Review 2025

Halifax is a well-established British insurer, with roots going back to 1853 and now operating as part of the Bank of Scotland. Halifax offers a range of financial services including banking products, insurance, and mortgages.

What types of life insurance does Halifax offer?

Halifax Life Insurance gives policyholders and their loved ones financial peace of mind, so that should the worst happen, any subsequent financial obligations or burdens will be met.

We will go into more detail below, but the life insurance products Halifax offers include: level term policies, decreasing term life policies, increasing term life policies, and whole of life policies.

Level Term

The level term policies offered provide a fixed coverage payout and a guaranteed premium throughout the policy period. This allows you to know exactly your premium expenditure for the policy’s duration, which can be fixed into your budget.

Decreasing Term Life

This product is suitable for those with long-term loans or mortgages, and those looking to protect their dependents from any outstanding debts in the event of their death. The payouts decrease over time, eventually reaching zero. This works in tandem with your mortgage, for example, which also decreases as you repay it.

It is important to note that while most other life insurance providers have a predetermined decrease rate for this type of product, Halifax allows you to choose the rate at which your policy decreases. This gives you the flexibility to decide how and when your cover reaches zero.

Increasing Term

Halifax’s increasing term life coverage is a good option for those concerned about the long-term impact of financial markets on their life insurance payout. With Halifax’s Increasing Term cover, your payout will increase annually in line with inflation. You might typically see increases from a minimum of 2% up to a maximum of 10%. However, it’s important to note that your premium will also increase.

It’s important to note here that if this coverage is selected, premiums increase at a rate of 1.4 times the percentage increase of your benefit. Other insurers may match the increase of benefits and premiums rather than applying a premium increase in excess of the benefit increase.

Whole of Life

The policies mentioned above have a maximum age limit, at which point the policy expires and coverage ceases. There is no cash-in value, and therefore no premiums will be returned. If you are looking for more guaranteed life insurance cover, you can opt for Whole of Life cover, which lasts until your death.

Typical Coverage Conditions and Offerings of Halifax Life Policies:

• Minimum Coverage Limits: £25,000
• Maximum Coverage Limits: £15m-£25m, depending on policy chosen
• Maximum Age of Coverage (unless choosing whole of life coverage): 79
• Policyholder’s children are also protected, up until the age of 22. They have a maximum payout amount of £25,000 or fifty percent of the policyholder’s payout, whichever is lower.
• Policies will not pay out in the event of suicide or self-inflicted injury that occurs within 12 months of policy inception.
• Applicants must reside in the UK
• Policyholders’ children are also included under Halifax’s life policies: in the event of a child’s death, policyholders will receive a one-off benefit of £5,000.

Optional Add-Ons

• Halifax offers policyholders the option to add a joint policyholder to the policy. Note that the policy will only pay out once, and coverage will cease upon a life claim.
• Critical Illness Cover can also be added to the policyholder’s life policy. If the policyholder is diagnosed with a critical illness during the policy period, the policy will pay out a cash benefit. Life coverage will continue.
• Maximum payout: £3m
• There are 49 critical illnesses covered, including heart attack, stroke, and various cancers.
• For an additional cost, you can add premium protection cover. If you become incapacitated from work for 26 weeks or longer, Halifax will waive your payments until you return to work.
• The policyholder’s children are also included under this Critical Illness Cover.

Additional Benefits

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• Upon purchase, policyholders and their families gain access to a complimentary medical advice service. This provides additional support in the event of serious illness, disability, recovery after hospital discharge, and bereavement. Additionally, you can obtain a “second opinion” if you are dissatisfied with the initial diagnosis or treatment recommended for a terminal or critical illness. You can consult top medical specialists in the UK, gaining extra peace of mind that the recommended course of action is the best option for you.
• Accidental death benefit during the application process: for up to 90 days while your details are being considered, you will have coverage if you die in an accident or as a result of one. The maximum benefit amount under this perk is £250,000, but will be the sum assured you applied for if it is less. This coverage ceases once a decision has been made on your application.
• 90 Days of Free Mortgage Cover: from the time Halifax receives the policy application to the exchange of contracts, this provides up to £250,000 in mortgage repayment cover that continues until a decision has been made on an application or the 90 days expire.

Policy Review

While Halifax offers a dependable and stable life insurance policy (it has been around for over a hundred years), there are some drawbacks. Its increasing term cover results in a disproportionate increase in the policyholder’s monthly premium, being 1.4 times the increased payout. As mentioned, most insurers offer premium increases that match their payout increases.

Defaqto Ratings for Halifax Life Insurance (March 2025)

Defaqto is a well-respected independent rating agency that assesses financial products, including life insurance, based on the quality and comprehensiveness of their features. Defaqto ratings use a 1 to 5-star scale, where 5 stars represent the highest quality products in the market. The latest Defaqto ratings for Halifax Life Insurance, current as of March 7, 2025, provide an updated view of their standing.

Halifax’s Defaqto ratings are currently:
* Critical illness (standalone): 3 out of 5 stars
* Critical illness (level term): 2 out of 5 stars
* Critical illness (decreasing): 2 out of 5 stars
* Life assurance (level term): 2 out of 5 stars
* Life assurance (decreasing): 1 out of 5 stars

Compared to competitors, Halifax’s ratings are generally lower. For instance, Aviva, Legal & General, and Zurich frequently achieve 5-star ratings across similar life insurance and critical illness products. Aviva boasts numerous 5-star ratings for both critical illness and life assurance plans. Legal & General also holds many 5-star ratings, especially for their comprehensive Multi Protection plans. Zurich similarly secures 5-star ratings for a wide range of their critical illness and life cover options.

For consumers, these ratings suggest that while Halifax offers life insurance, their policies may not be as comprehensive in features and benefits as some higher-rated providers. It is recommended that consumers carefully compare Halifax’s policies against those from 5-star rated insurers to ensure they are getting the most suitable and comprehensive cover for their needs.

Defaqto ratings