Make a new year's resolution to save on your life insurance premiums

01 January 2009 / by Rachael Stiles
As the year approaching promises to be at least as financially challenging as 2008, protection company LifeSearch is urging consumers to make sure they are not paying over the odds for their life insurance premiums.

The cost of life insurance has fallen by around 40 per cent over recent years, the company says, which means that many customers could be wasting thousands of pounds by not reviewing their protection policies.

Life insurance customers should use the new year as a reason to get their finances in order, and compare life insurance quotes to ensure they are not getting overcharged to better prepare themselves for what could be a tough 2009.

Last year saw the price of life insurance and critical illness insurance continue to fall, which means now is a good time buy, LifeSearch recommends.

With the rising level of unemployment, income protection insurance is also becoming more important than ever, and, according to research from MoneyExpert.com, more than a third of Brits believe payment protection insurance to be an important purchase as a result of the current economic climate.

While income protection insurance has remained relatively static in price, LifeSearch has found, it is still possible to save money and it could prove to be a valuable investment as the economic crisis tightens and more businesses topple under the weight of a recession.

LifeSearch also urges those who gave up smoking for their new year's resolution last year and have stuck to it for 12 months to review their policy and inform their insurance company; while this does not guarantee a cheaper premium, because it also depends on age and health, it could potentially cut hundreds of pounds off the cost of cover.

Over the average term of a life insurance policy for a 35 year old male in good health, there could be a saving of £1,239 between the most expensive and cheapest policies, a £3,039 difference between the cheapest and most expensive critical illness insurance policies, and a huge disparity of £8,769 between the cheapest and most expensive income protection insurance cover, so an individual could save as much as £13,000 over the terms of their insurance policies.

Matt Morris, LifeSearch Senior Policy Adviser, says, "There are a number of steps that customers can take in the new year to freshen up their finances and save a bit of money. The first thing is to actually take action. Don't wait until New Year's Day 2010 comes round before you start thinking about saving money on insurance premiums again.

"However, it is important to remember that price should not be the only consideration when choosing a protection product and customers should look at the policy that offers the best value for money rather than simply the cheapest."

© Fair Investment Company Ltd