competition have combined to make term life insurance one of the
outstanding bargains available in the UK. This is highlighted by
research undertaken by Moneyfacts, an independent provider of
personal finance information.
Moneyfacts noted that while consumers have seen the cost of general
insurance such as motor and household cover spiral, average term
insurance premiums have in some cases halved over the last decade.
Non-smokers have been the biggest beneficiaries with the average
male premium in July 2008 down by 53 percent since July 1998 and
the average female non-smoker premium down 48 percent.
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Put in perspective, prices of all items in the UK increased
by a total of 31.9 percent between June 1998 and June 2008,
according to the Office For National Statistics. The premium
declines measured by Moneyfacts are based on a sum insured of
£100,000 ($199,000) over a 25 year term for a person aged 30 next
birthday. Declines in premiums over the 10 year period have,
according to Moneyfacts, resulted in total savings over a policy’s
life of £3,018 saving for a male and £2,232 for a female.
Moneyfacts pointed out that smokers have also benefited from
cheaper cover with the average male smoker rate 48 percent lower
and the average female rate down 45 percent since July 1998. This
represents total cost savings of £3,780 and £2,724,
respectively.
However, for non-smokers at least the time of declining premiums
may be coming to an end, believes Moneyfacts. This view is based on
an increase in premiums between July 2007 and July 2008.
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By GlobalDataMoneyfacts found that for a male non-smoker aged 30 next birthday
the average monthly premium for £100,000 of level term insurance
increased by a marginal 0.9 percent from £8.71 to £8.79 while for a
female the monthly cost increased by a more significant 7.2 percent
from £7.34 to £7.87.
In contrast, Moneyfacts found that rates for smokers continued to
decrease, falling by an average 2.2 percent for males to £13.40 and
1.6 percent for females to £10.76 between July 2007 and July
2008.
