Beware of cheap life insurance
on price comparison sites
As you know, price comparison sites offer to search the market for the cheapest life insurance, and we would like to take a moment to explain why some cheap life cover policies may not be the best for you in the long term.
Why cheap life insurance may not offer long term value
We offer two main types of life assurance, level term assurance and decreasing term assurance. With decreasing term assurance the amount of cover decreases over the policy term and is usually taken out to protect a repayment mortgage. Both of which pay a lump sum if you die during the term of the plan and are eligible to claim. The monthly premium stays the same unless you increase your cover.
Price comparison sites sometimes list a product called ‘reviewable term assurance’ as one of the cheap life insurance policy options. However, with reviewable term assurance the premium may increase during the term of the policy. This type of policy may be presented as one of the cheapest life insurance policies at the beginning, but it could rise significantly during the term of the policy.
Although a reviewable term assurance policy may seem like one of the best and cheapest life insurance policies at the time, once it has run for a few years it could become less competitive.
The conditions and benefits of a reviewable term policy may differ to the life insurance policies that we offer, over the term of the policy.
Male, non smoker, born 8 October 1967, taking out £100,000 level cover over 20 yrs:
Price on comparison site: Monthly premium starts at £9.10 and typically premiums will increase each year with age throughout the term of the policy.
Legal & General: Monthly premium = £13.00
- This example was taken from Moneysupermarket.com on 5 November 2009
- Your premium will depend on your individual circumstances and needs.
