Insurance news
Cutting the cost of life insurance can let you live a little more
16 October, 2006
With life insurance policies becoming steadily cheaper over the past few years, people are being urged to check they are getting the best deal.
Various factors have led to a reduction in premiums including advances in medical science, increased efficiencies and competition between providers.
According to moneysupermarket.com many who took life policies out five or more years ago could well save money on their premiums by reassessing what is on offer, as their deal may now look over priced.
Another reason why people should look to re-evaluate their life insurance is the introduction of PTA (Pension Term Assurance) following the changes on A-Day on April 6 this year.
Consumers can cut the cost of life assurance by purchasing PTA instead of a conventional term assurance policy. For example, for a 35-year-old male non-smoker covered over 25 years for £100,000 of level term assurance from Legal & General, the yearly premium through Sainsbury’s Bank would be £120.
However, if the same person were to choose a PTA policy with Legal & General through More Th> n it would cost £97.92 for a basic rate tax payer over the year. This is a saving of £22.08. A higher rate tax payer can claim additional tax relief via their annual tax return.
Emma Walker, life insurance product manager at price comparison website moneysupermarket.com, said: “PTA has been one of the main factors of driving life policies down, owing to the tax relief that you can benefit from. While the savings are considerable, consumers should seek financial advice to check whether PTA is right for them and the best option available. It does not have any frills and is not for you if you want critical illness cover, family income benefit, income protection or whole of life cover.
“Life insurance is such a critical piece of protection that it’s vital you fill in your form correctly and declare all the necessary details. It is not something that should be taken out on a whim, and if you are looking for cover, it is essential you get the right policy for you. We always recommend seeking professional advice before you make any decisions on this type of insurance.”
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