Price war halves life cover cost

The protection price war has seen the cost of life cover more than halve in a decade, research suggests.

A study by Moneyfacts found average term assurance premiums for non-smokers have fallen 53% for men and 48% for women since July 1998.

It says, in monetary terms, this represents a £3,018 saving over a 25-year term for a male and £2,232 for a female, although it adds longer life expectancy has also contributed to the drop.

Richard Eagling, editor of investment, life & pensions at Moneyfacts, says: “Longer life expectancy coupled with increased competition in the term assurance market has driven prices down to all time lows, but for non-smokers there are signs that rates may have bottomed out.

“Consumers looking to take advantage of the huge savings on offer should proceed with caution as life insurance companies assess risk differently.

“Some policies are as much as five times more expensive – so why waste money needlessly?”

The study also suggests smokers have benefited from cheaper cover with the average male smoker rate 48% lower - a cost saving of £3,780 - and the average female rate down 45% - a £2,724 saving - since July 1998.

However, Moneyfacts argues consumers may not have it so cheap again, pointing out premiums have increased slightly over the past 12 months.

For a male non-smoker aged 30 next birthday the average premium for £100,000 of level term assurance has risen from £8.71 to £8.79 whilst for a female the monthly cost has increased from £7.34 to £7.87.

In contrast, it adds, smoker rates have continued to decrease, falling by an average 2.2% for males and 1.6% for females over the past 12 months. “Nevertheless, smokers can still make considerable savings by kicking the habit, with rates for non-smokers around 35% cheaper,” it says.

Contact:
Scott Sinclair
News Editor
020 7034 2636
scott.sinclair@incisivemedia.com