Life insurance is something you tend to buy and forget. But premiums can change significantly in a short space of time, as I've found out, potentially saving you hundreds of pounds..
If you've looked around the site you might have come across the Buying Life Insurance Action Plan, providing you with handy tips on how to get a good deal on appropriate cover.
As it'd been a few months since I wrote the page I updated the sample life insurance quotes yesterday. You don't expect these things to change by much, after all, average life expectancy changes over years, not months, so I was surprised to see quotes changing, for better and worse, by up to 15%.
While it might not sound like much, it could affect the total cost of a life policy by hundreds of pounds over the term held.
Here's a quick summary (monthly premium quotes for 20 year level term assurance of £200,000 for a 30 year old non-smoking male):
| Broker/Insurer | Quote 13/4/2010 | Quote 15/9/2010 | Change in total cost |
|---|---|---|---|
| Cavendish Online | £7.75 | £7.03 | -£173 |
| Moneyworld | £7.75 | £7.03 | -£173 |
| Moneysupermarket | £7.57 | £7.95 | +£91 |
| GoCompare | £9.16 | £9.45 | +£70 |
| CompareTheMarket | £9.21 | £9.02 | -£46 |
| Aviva | £10.64 | £10.78 | +£34 |
| Tesco | £11.07 | £9.34 | -£415 |
| Direct Line | £12.12 | £13.28 | +£278 |
You'd expect small changes from time to time, as insurers raise or lower premiums depending on how hungry they are for business. But why such significant changes?
In the case of discount brokers Cavendish Online and Moneyworld, who already cut their margins to the bone by waiving all commissions in exchange for a small fee, it must be the case of an insurer deciding to give them especially attractive quotes in a bid to win more business.
Price comparison site Moneysupermarket was the cheapest last time but quite a bit more expensive this time. They display quotes from both insurers and brokers and the previous quote appeared to be from a broker who'd either negotiated an exceptionally good deal from an insurer or was offering a loss leader to try and win more customers - not repeated this time. GoCompare and CompareTheMarket changed a little, but still remain very uncompetitive.
Aviva's quote remained more or less the same, but far more expensive than buying the same Aviva policy through one of the discount brokers. Tesco slashed their premium to become just expensive, rather than extortionate. And Direct Line remains on another planet by hiking an already expensive quote to nearly double that from the discount brokers.
If there's a lesson to be learned here it's don't be afraid to shop around for a better life cover deal from time to time - as premiums can change significantly.
There's nothing stopping you from taking out a new policy if you find a cheaper deal, just don't cancel the old one until the new cover is in place. Yes, it's not the most interesting of tasks, but it could be a very profitable one.
Read this article at http://www.candidmoney.com/articles/article150.aspx
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