Life insurance costs have have halved over ten years
Life cover costs halved
Wednesday, 23 Jul 2008 17:18
The cost of life cover has halved over the last decade with consumers benefiting from a price war in the industry, according to research.
Moneyfacts.co.uk found that while consumers have seen the cost of other forms of insurance such as motor insurance and household insurance spiral, average term assurance premiums have in some cases halved over the last decade.
Non-smokers have been the biggest beneficiaries with the average male premium down by 53 per cent since July 1998 and the average female non-smoker premium plummeting 48 per cent.
In monetary terms this represents a staggering £3,018 saving over a 25-year term for a male and £2,232 for a female, the website said.
"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?"
However, there are signs that for non-smokers the era of falling premiums may finally be coming to an end with premiums increasing 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, while for a female the monthly cost has increased from £7.34 to £7.87.
In contrast, smoker rates have continued to decrease, falling by an average 2.2 per cent for males and 1.6 per cent 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 per cent cheaper, moneyfacts said.