Life insurance Updated:
Research from moneyfacts.co.uk has revealed the extent to which consumers have benefited from the price war that has engulfed the term assurance market in recent years and warns that some premiums may have bottomed out.
Whilst 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% since July 1998 and the average female non-smoker premium plummeting 48%. In monetary terms this represents a staggering £3,018 saving over a 25-year term for a male and £2,232 for a female.
Smokers have also 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 cost saving of £2,724) since July 1998.
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 whilst 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% 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.
Richard Eagling, Editor of Investment Life & Pensions Moneyfacts commented:
"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?"
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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