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Global Article-Directory » Finance » Insurance » Guide to Life Insurance


  Guide to Life Insurance

  Author: Kate Tee

- Trends in life insurance -

Life insurance prices are falling!

Many of us are used to feeling the pinch in our pockets as prices in the shops rise.

Rising electricity and gas bills, petrol prices and food costs are not uncommon, with wages and savings sometimes struggling to keep pace.

But one area where costs have tumbled over recent years is life insurance.

Why have life insurance costs dropped?

The monthly or annual premium to provide financial security for your loved ones has taken a dive, for a number of reasons:

• Life expectancy

Fact: People are living longer - reducing the cost of life insurance in two ways.

Overall UK life expectancy is now 79 and this means policyholders are typically paying into the insurance pot for longer.

The trend is expected to continue as medical advances improve.

Better health and life expectancy also results in fewer claims being made by policyholders - for example those with mortgage life insurance are more likely to die after their mortgage is paid off.

• Technological developments

Alongside health advances, improvements in technology, particularly in areas such as car safety, are ensuring that fewer younger people are dying and therefore claiming on their policies.

• The internet

Perhaps the biggest reason for falling premiums is the emergence of the internet in the sale of life insurance.

In the past, consumers typically faced a limited choice of providers and shopping around for the best deal required major legwork.

But the rise of price comparison websites, means a search of a huge range of insurance providers can be done at the click of a mouse - and the results delivered within seconds.

This has led to fierce competition among providers, which has driven down prices to attract customers.

What you should know when searching for life insurance providers

A major trend in the life insurance market has been the entrance of supermarkets.

Retailers supply insurance which is underwritten by major providers such as Aviva and Scottish Widows.

This again has helped to increase competition by boosting the number of brands available to consumers - even if the number of actual providers has not changed.

For more about who provides life insurance read Confused.com's guide to what life cover is available and who provides it?

How to stay protected when buying life insurance

With the vast number of insurance providers fighting it out for your business, who should you trust with your life policy?

Perhaps the most important thing you need to ensure is that your insurance provider is regulated by the UK watchdog, the Financial Services Authority.

All providers should be registered with the FSA and a list of authorised companies is available on the organisation's website.

The FSA has a code of practice which insurance firms must comply with. This includes providing an initial disclosure document - also known as Key Facts - giving full details about the company and its products.

What happens if your life insurance company goes bust

The Financial Services Compensation Scheme may provide compensation if your life insurer hits trouble.

The scheme covers all of the first £2,000 of a policy and 90% of the remainder of the claim.

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About the Author

Confused.com offer a guide to life insurance and comparison services. Visit now at http://www.confused.com/life-insurance for more.


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